ARTICLE · 14 FEBRUARY 1997
Value Added Tax In Hungary
HungaryAccounting and Audit
The most significant aspects in Value Added Tax (VAT), as well as changes to other laws which affect the VAT Act effective as of 1 January 1997 were as follows:
1. The general rate of VAT on the sale of goods and the provision of services in Hungary remains 25%. The reduced rate of VAT applying to certain specified goods and services remains 12%. Export of products is subject to VAT at zero rate.
2. It is no longer be possible to reclaim the VAT content of bad debts.
3. The date of performance for leasing transactions and instalment purchases as defined by the VAT Act, shall be the date when the asset is given into possession, contrary to the previous rule that the date of performance was the due date of payment. VAT must now be paid with respect to the entire leasing fee at the time of transfer of the asset. In the case of contracts which have already been concluded, if the asset is given into possession by the end of the year, then the VAT liability will arise at such
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