DEFINITIONS
Fixed establishment for VAT purposes
Geographically isolated facility, where the conditions for the economic activity are in fact available. Existence of fixed establishment shall be examined specially in case of storing, services connected with immovable property and construction activities.
Reverse charge
Reverse charge mechanism is a method of VAT assessment according to the common system of the indirect taxes within the European Union. In case of specified supply of goods and services the customer is liable to pay the VAT. Consequently the supplier has no VAT obligation in Hungary, thus VAT registration is not required, either.
EC sales list (ESL)
In the EC sales list (VIES report – VAT Information Exchange System) the participants have to report the intra-Community supply of goods and services. In EC sales list the amounts of the transactions shall be reported by VAT ID numbers.
Intrastat
Intrastat is a reporting obligation prescribed by the EU and the Hungarian Central Statistical Office. Intrastat is a system for collecting statistics on the trade in goods between Hungary and another EU Member State. The transactions shall be reported by commodity codes and by the involved countries.
Commodity code
At the Intrastat reporting the code of the specified product shall be determined by the Combined Nomenclature.
Hungarian VAT ID number
The Hungarian VAT ID number is an 11 digits identification number. The first 8 digits identify the owner of the VAT number, the 9th digit identifies the VAT status, and the last 2 digits identify the competent tax office.
Intra-Community trade requires EU VAT ID number, which contains the ’HU’ prefix and the first 8 digits of the Hungarian VAT number.
VPID number
This identification number also can be required at the registration form. The number is generated by the Customs division of the National Tax and Customs Administration (NAV). In case of VAT registration VPID number is required in order to fulfil the obligations related to the environmental fee.
Triangulation
The Hungarian rules allow the term called triangulation, which means that under certain conditions in a three members chain supply, where the final customer (3rd party) participates under Hungarian VAT number, the 2nd member (intermediate party) exempted from the Hungarian VAT registration.
VAT Directive
The so-called Sixth Directive controlled the uniform rules of the indirect taxation of intra-Community supplies. The number of the Directive changed to 2006/112/EK by the time its re-codification in 2006, but the Directive regulated the Community VAT system without essential changes afterward.
The Directive was modified with the Directive 2008/8/EK. The new provisions enter into force fractionally from 1st January 2009 to 1st January 2015.
The provisions of the modifying directive entered into force on 1st January 2010 changed the rules of the place of supply basically. Nevertheless the new rules were intended to simplify the old system.
The information on this website are indicative data. It shall not be considered as advise.
