Hungary is the country with the highest VAT rate (27% standard rate) within EU. In case of a business model where the importation of the goods cause negative cash flow effect due to high recovery position of import VAT one should be proactively thinking to get a license for importation self-assessment. It’s a license that can be obtained from the National Tax and Customs Authority by companies if they meet the following requirements:
- the applicant should be a taxpayer registered in Hungary and it should be recognized as a reliable customs debtor.Furthermore:
- the total value of the goods and services that the applicant has supplied during the previous calendar year under exemption – due or paid for the year on aggregate – should reach or exceed 67 per cent of the total value of the goods and services that the applicant has supplied during the same period – due or paid for the year on aggregate – exclusive of VAT or at least HUF 10 billion, or
- it should reach or exceed HUF 20 billion, or
- the applicant should hold an authorization for the simplified procedure for the release of goods for free circulation or
- the applicant should be an Authorized Economic Operators (AEO).
An AEO is a reliable economic operator that has been granted this status by a competent customs authority in a member state of the European Community. Processes of the companies applying for AEO status will be checked in order to assess their quality and completeness from the custom perspective. The process of getting the AEO status takes about 3-6 month. After getting the AEO certificate it is possible to apply for the license for importation self-assessment. It takes about one month.
With the license for importation self-assessment the import VAT is not due at the time of the import. The licensee can declare the import VAT due within its VAT return. The declaration is done electronically. However deposit of 50 percent of the value of the import VAT in form of a bank guarantee is needed. Usually AEO certificate holders are only selected for a post-clearance audit if they have a high risk rating due to the type and nature of the transaction concerned. So the administrative work can be limited as well.
For all of these who does not have AEO status it is possible to assign a fiscal representative with license for importation self-assessment to enjoy the advantages without own license.
For further details please contact Laszlo Deak (firstname.lastname@example.org) at Office: +3614619590 | Mobile: +36305254717 or Laszlo Horwath (email@example.com) at Office: +41 58 792 2009 | Mobile: +41 79 238 6525 | Main: +41 58 792 4400