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Do you have a webshop with Hungarian customers? – you may have these tax liabilities in Hungary
Many foreign sellers (typically online platforms) are facing Hungarian tax liabilities even if they do not have a company, branch or representative office in Hungary. This also means that, although businesses can enjoy the benefits provided by the one-stop shop (OSS) system in VAT, they must register in Hungary in order to fulfil other tax obligations.
What tax obligations may arise?
1. Extended producer responsibility (EPR)
EPR must be paid after certain packaging of the company’s products. Companies that sell goods from abroad to consumers onlineare obliged to pay an EPR fee as of 1 July 2023 for each product and packaging they sell.
Due to the EPR obligation, it is necessary to register with the MOHU (MOL Hulladékmanagement Zrt.) and the waste management authority.
2. Environmental Product Charge (EPC)
The environmental product fee should be calculated more or less for the product ranges and packaging covered by the EPR. The EPR fee can be deducted from the EPC fee, but the product fee must still be properly administered (it must be determined and declared, etc.)
In order to pay the product fee, a domestic tax number is required, so it must be registered with the Hungarian tax authority in order to fulfill the respective tax obligations.
3. Public health product tax (NETA)
The public health product tax is payable after certain foods and beverages. It must be paid by the entity that sells the taxable product domestically for the first time or by the purchaser who uses the taxable product to produce his own product domestically.
The NETA obligation also applies to foreign webshops without Hungarian tax numbers, who are performing cross-border sales of taxable products to Hungary. The NETA can only be completed if the company has a Hungarian tax number, and therefore they must register it themselves.
4. Retail tax
If the sales revenue of the distance selling company exceeds HUF 500 million, it also triggers a retail tax liability in Hungary. In this regard, you must prepare an annual report, and according to the general rule, a tax advance payment obligation must be fulfilled.
Failure to comply
Tax law sanctions and heavy penalties may be imposed and authorities may also suspend the marketing of companies’ products.
If you would like to discuss any of the issues raised in this article, please contact:
Dr. Horváth Zoltán
Tax manager
VGD Hungary Kft.
E: vgd.budapest@vgd.hu
T: +36 (1) 225 7575
W: www.vgd.hu
Kuntner Andrea
Tax partner
VGD Hungary Kft.
E: vgd.budapest@vgd.hu
T: +36 (1) 225 7575
W: www.vgd.hu
Szabó Viktor
Director tax and payroll
VGD Hungary Kft.
E: vgd.budapest@vgd.hu
T: +36 (1) 225 7575
W: www.vgd.hu
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