Based on ECJ case, Hungarian taxpayers may have an opportunity
to reclaim value added tax (VAT) in case of bad debts.
In its judgement Enzo di Maura, C-246/16, the European
Court of Justice (ECJ) established that Member States are not
allowed to exclude the opportunity of reducing value added tax if a
customer fails to pay an invoice. This means that according to the
ECJ's decision, VAT can be claimed back if a buyer did not
settle an invoice. The current Hungarian legislation does not
contain provisions on such reduction of the value added tax base in
case of bad debts. As this seems to infringe the VAT Directive,
taxpayers may consider reviewing the opportunities to reclaim
tax.
