The Hungarian Supreme Court ruled on the conditions when
the issuance of a fictitious invoice does not trigger value added
tax.
According to the general rule, VAT is triggered when a supply
subject to VAT occurs. However, in an effort to combat VAT fraud,
the Hungarian legislation stipulates that the issuance of a
fictitious invoice in which VAT is charged also triggers VAT
liability.
Nevertheless, based on the legislation, the issuance of such an
invoice would not trigger VAT if the supplier:
- proves that the supply indicated in
the invoice did not occur between the parties indicated in the
invoice (the legislation does not set out any provisions on how
this may be proved); and
