Egry József - Fények a Balatonon

Doing Business in Hungary 2022

The objective of Doing Business in Hungary 2022 is to provide guidance on the business environment in Hungary for those decision-makers who are interested in engaging in business activity in Hungary.
The publication focuses on the general overview, like currency, climate, cost of living, bankink, and safety and security guidance, followed by a broad outlook on the current economical situation. You will learn from our booklet what business organisations are allowed in the Hungarian company law, what are the criteria to estblish a particular company, what are the minimum share capital requirements, and what is the procedure to form a company.
This publication also deals with the taxation system of Hungary and gives detailed guidance on corporate tax, tax deductibles and tax incentives in Hungary, value-added tax system, personal income tax. A brief guidence will also be found about small business tax, small taxpayers’ itemized lump sum tax, employment taxation, local business tax, innovation contribution, company car tax, withholding tax, and finally tax penalties.

Hungary is an attractive investment target for foreign companies with its qualified human resources, language skills and outstanding location in Central Europe.

Our Doing Business in Hungary booklet has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained herein without obtaining specific professional advice. Please contact us to discuss these matters in the context of your particular circumstances. Neither we nor our partners, employees or agents accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.



This year  we pay special tribute in our publication to the greatest Hungarian painters Munkácsy Mihály, Székely Bertalan, Szinyei Merse Pál, Csontváry Kosztka Tivadar and Egry József.

Employee in office

Employment in Hungary by a UK employer

A foreign employer in Hungary faces several questions, like residency, tax registration, employment reporting, and tax payment. What tax and social insurance obligations arise and who pays them if a UK company employs a worker who carries out their job in Hungary?

Under the Trade and Cooperation Agreement between the United Kingdom and the European Union, the Protocol on the coordination of social security systems applies to persons legally resident in the territory of the Member States or the United Kingdom.

This means that, as a general rule, you will be insured in the country in which you work.

Tax rates

If you work in Hungary, then both income tax and social security contribution obligations must be met in Hungary. In this case, the foreign employer is liable for contributions in Hungary. They shall deduct 18.5 per cent of the contribution from the employee’s gross salary and pays 15.5 per cent employer’s social security contribution.

The employee needs to pay and report the personal income tax every quarter, which is 15 per cent of the amount of the income from the foreign employer.

Accordingly, tax reporting splits between the employer and the employee. The employer will report the social security contribution every month, and the employee will report personal income tax quarterly.

Foreign employer registration

Before starting employing someone in Hungary, a foreign employer must register with the National Tax and Customs Administration (NAV) and apply for registration with the tax office as an employer. This can be initiated on the form T201INT.

After the registration got completed, the foreign employer needs to report the start of the employment. This should be filed to the Hungarian tax office before the first day of employment. When employment terminates, the employer should send a similar report within 8 days. These notifications must be made on the form T1041INT.

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If the foreign employer does not have a representative to fulfil the contribution obligations (ie. does not have a branch or financial representative) and fails to register as a foreign employer, then the employee must fulfil the obligation to register, pay the social insurance contributions and file tax returns. Also, the employee bears the legal consequences of non-compliance with obligations, excluding default fines and tax fines.

Social security payment

The Hungarian social security obligation can be avoided if the English HM Revenue & Customs issues you a so-called A1 certificate, based on which you can remain subject to English social security. You, or your employer, could apply for a certificate or document if you are going to work temporarily in the EU for up to 2 years.

Applications can be made through the website here:

This is conceivable if you are sent to work in the Hungarian office. In this case, your English employer will continue to pay your wages, you will be insured in the UK and you will pay your NI there. Your personal income tax will be determined by your tax resident status. If your stay in Hungary exceeds 183 days, you will become a Hungarian tax resident and must pay personal income tax in Hungary on your worldwide income.

Opening a company in Hungary and supply the service through that

It is possible to do the job as a freelancer or by founding a Hungarian company and thus providing services to the UK company.

In the case of the provision of services as a freelancer or by establishing a Hungarian company, the payment of taxes and contributions also arises in Hungary, which must be paid by the self-employed person or the Hungarian company.

Opening a Hungarian company can be an optimal tool to run your business and make use of the Hungarian 9% corporate tax rate, which is the lowest in Europe. Through a company in Hungary, you can easily meet the employment reporting and taxation requirements too.

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In this case, it is important that you carry out the activity on your own and not on the instructions of your former employer. Otherwise, this can qualify as disguised employment, and there is a risk that the tax authorities will reclassify the relationship as employment.

In terms of separating employment from a contractual job, the UK’s IR35 test gives a good understanding. Use this tool to find out if you should be classed as employed or self-employed / contractor for tax purposes. The online questionnaire is available from here:

Separation considerations include, for example, the following:

  • Does your client have the right to reject a substitute?
  • Would you have to pay your substitute?
  • Does your client have the right to move you from the task you originally agreed to do?
  • Does your client have the right to decide how the work is done?
  • Does your client have the right to decide your working hours?
  • Does your client have the right to decide where you do the work?
  • Will you have to buy equipment before your client pays you?
  • Will you have to fund any vehicle costs before your client pays you?
  • Will you have to buy materials before your client pays you?
  • Will you have to fund any other costs before your client pays you?
  • Would you have to put your mistakes right?
  • Will your client provide you with paid-for corporate benefits?
  • Will you have any management responsibilities for your client?
  • Does this contract stop you from doing similar work for other clients?
  • Are you required to ask permission to work for other clients?
  • Are you having a series of contracts agreed with this client?
  • Does the current contract allow for it to be extended?
  • Will this work take up the majority of your available working time?
  • Have you done any self-employed work of a similar nature for other clients in the last 12 months?

According to similar principles, the Hungarian legislation also distinguishes the employment relationship from the self-employed / company service contract, and though the questions target the same areas, those are less detailed.

  • The activity was not or could not be performed exclusively by you personally.
  • You did not receive at least 50 per cent of your income for the calendar year from the customer.
  • The client could not give instructions on how to carry out the activity.
  • The place where the activity is carried out is in your possession.
  • The tools and materials needed to carry out the activity were not provided to you by the client.
  • You determine the order in which the activity is carried out.
  • You do not have an employment relationship with your client in addition to your business.

VAT on sales to Britain after the Brexit

Britain became a third country from VAT perspective

From 1 January 2021, Britain became a so-called third country outside the EU in terms of customs, VAT, foreign trade law and statistics. Goods must be placed under an export customs procedure in the European Union. This can be done on behalf of the customer by a customs agent, the parcel delivery service, or even by the customer itself.


VAT rules on export to Britain

From a VAT perspective, Section 98 of the VAT Act is applicable in the case of exporting products. This means that the sale of a product dispatched domestically outside the territory of the European Union is exempt from vat.

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The condition to this is that the product needs to leave the territory of the Community

  • right at the time of the sale,
  • but no later than 90 days after the date of performance.

If the goods don’t leave immediately, then those mustn’t be used for their intended purpose or otherwise utilized, excluding testing and trial production.

You need to evidence the proof of dispatch by a certificate of exit from the customs authority. The exporter will receive this certificate from that particular electronic system which placed the goods under the customs export procedure.

If the above conditions are met, then the Hungarian business can issue a VAT-free invoice, referring to Section 98 of the VAT Act.

The goods shipped in Great Britain needs to be placed under an import customs procedure by a customs agent or parcel delivery service. The treatment of goods in the country of destination will be subject to customs and vat rules in the. Make sure you have the correct paperwork for the type of goods you are trading. For more information on this, read the guidance on GOV.UK available from here:

VAT rules on export to Northern Ireland

The rule is different if the seller sends the shipment to Northern Ireland. Still, after the end of the Brexit transition period, supplying goods to this area is classed as Community sales for customs and VAT purposes. This means that there is no need to place the goods under a customs procedure. However, in this relation, if you send the supplies to businesses, then B2B rules are applicable and this will govern the place of supply. Generally speaking, in this case, the reverse vat charge method is applicable. On the other hand, if the sale was a B2C supply then the transaction is vatable on the basis of the distant selling rules.

Exceptions may be made only to sales to the Member States to which

  • the seller does not sell the excise goods, and
  • the volume of sales to that Member State in the current year or the preceding year may not exceed the applicable threshold.

For Northern Ireland, this threshold is £70,000.

So this means if the annual value of your distance sales into Northern Ireland is less than the distance selling threshold, you charge VAT at the rate that applies in your own country. You will also account for the VAT in your own country. Registration into the Norther Ireland VAT system is optional under the threshold.

If the seller doesn’t want to register for VAT in Northern Ireland, then it needs to invoice with Hungarian VAT. Upon reaching the particular threshold, the vat registration in the destination country is obligatory.

Upcoming change on 1 July 2021

However, the situation will change on 1st July 2021 with the extension of the Mini One Stop Shop scheme. The expected change will extend the MOSS scheme to include all intra-EU B2C supplies including intra-EU distance sales. This change will lead to the abolishment of distance selling thresholds. More detail on this can be found here: Modernising VAT for cross-border e-commerce.

Vat exempt intracommunity delivery

Brexit: does creating a Hungarian company help with EU customs?

Great Britain now third country

The United Kingdom withdrew from the European Union (EU) on 1 February 2020 and left the EU Customs Union on 1 January 2021. Therefor EU traders, businesses and citizens will experience significant changes due to Brexit.

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The UK’s departure from the EU also means that it will be considered a “third country”, ie a non-EU country, from 1 January 2021. An exception to this is Northern Ireland,. In that case, EU customs, VAT and statistical legislation continue to apply. As a result, in the case of Great Britain (England, Scotland, Wales), the rules of exit and entry have changed, and products coming from or going to Great Britain have also become subject to customs duties.

For customs administration, an EORI number must be requested from the National Tax and Customs Administration (NAV). This can be done in person or through an agent. Products arriving in Hungary from outside the EU – in this case from Great Britain – and departing from Hungary to Great Britain must be reported in a customs declaration, as this is a condition for import and export from January 2021. NAV carries out the customs procedure on the basis of the submitted goods declaration.

For individuals, it is good to know that if they order goods from Britain or import goods from there on their journey, from January 2021 it will be considered as an import from outside the EU. It is therefore advisable to find out from the customer information available on the NAV website before ordering or travelling. If someone does not want to handle their own customs affairs, they can entrust a customs representative instead.

See how the Brexit new rules will apply on the site.

What can I do to mitigate the impact of Brexit?

Establishing a Hungarian company is an exceptional tool to mitigate the disadvantages of Brexit.

A company established in Hungary will allow UK small firms to maintain their business in the EU region and continue to benefit from accessing the single market. The immediate benefit of forming a company in Hungary is that it will allow trading within the EU without customs and tariffs, invoice business customers without charging VAT and administer their trade and service activity by the EU legislation.

Read more on this topic here.


Social insurance lower limit from 1 July 2020

The new social insurance rules introduce a new minimum social security contribution under the name “Lower Limit for Social Insurance Contributions”, the legislation comes into effect from 1 July 2020.


In the case of employment, under the new rules, the contribution base is at least 30 per cent of the minimum wage per month (lower contribution limit).

The rule of the lower limit for the payment of contributions must, therefore, be examined in the case of employment in which the salary does not reach 30% of the minimum wage on a monthly basis (in the case of a broken month, the one-thirtieth of it shall be taken into the calculation per day).

The new rule does not differentiate between full-time and part-time employment. That is, even in the case of part-time work, 30% of the total amount of the minimum wage must be taken into account.

Whether an employee’s job requires a secondary education or a vocational qualification is still decisive in calculating the lower limit for the payment of contributions. If the answer is no then the minimum wage shall be used, but if yes then the higher amount guaranteed minimum wage is applicable.

The lower limit for the payment of contributions calculated on the basis of 30% of the minimum wage (currently HUF 161,000) is HUF 48,300 from 1 July 2020 in the case of employment.

The lower limit for the payment of contributions calculated on the basis of 30% of the guaranteed minimum wage (currently HUF 210,600) is HUF 63,180 from 1 July 2020 in the case of employment.

Accordingly, if the salary of an employee doesn’t reach the above amount, then their social security contribution shall be calculated and paid after the lower limit.

Employer taxes30%30%
Gross salary48 30063 180
– social insurance tax15,50%7 4879 793
– vocational training contribution1,50%725948
– total tax8 21110 741
Full employment cost56 51173 921
Tax deductions from employee
Gross salary48 30063 180
– personal income tax15,00%7 2459 477
– social insurance18,50%8 93611 688
– total tax33,50%16 18121 165
Net salary32 12042 015
Total tax per month24 39231 906

Changes in invoicing and vat reporting from 1 July 2020

Changes in invoicing rules

From 1 July 2020, the invoices shall be issued within 8 days from the date of the completion, a reduction from the current 15 days.

The requirement for the mandatory data content of the invoices also changes. Accordingly, at least the first 8 digits of the tax number of the buyer as domestic taxable person must be shown on the invoice, regardless of whether the document contains any VAT passed on or in what amount.

According to the legal wording, the obligatory data content of the invoice is the first eight digits of the “tax number or, in the case of a group VAT group, the group identification number of the customer acquiring the service, under which the supply of goods or services was made to a domestically registered taxable person, provided that the seller or service provider is established in the country for economic purposes and, in the absence of establishment for economic purposes, is domiciled or habitually resident ‘.

In this regard, it should be emphasized that in the case of a transaction subject to domestic reverse taxation, the 11 digits of the tax number must be entered on the invoice, the indication of the first 8 digits is not sufficient.

The buyer’s tax number shall be indicated for the first time on the invoices issued on transactions that are completed (the completion date is) after 30 June 2020, regardless of the amount of the value added tax.

Temporarily, invoices issued for a transaction that completed after 30 June 2020, which yet does not include the buyer’s tax number, may still be acceptable for VAT deduction if it was issued before 1 July 2020 and the tax is less than HUF 100,000.

Incoming invoices

It is important to check before accepting an incoming invoice that your partner has also included the customer’s tax number on the invoice. We encourage you to send information to all our partners, even by forwarding this email.

Reporting invoices to the tax office

Again from 1 July 2020, data on each and every domestic transaction and invoice issued to domestically registered taxable persons shall be sent to NAV (tax office) electronically.

The change compared to the previous rule is that so far only invoices with a VAT amount of HUF 100,000 or more had to be submitted to the tax authority. This means that the threshold has been removed and subsequently from 1 July the tax office will see literally all invoices between domestic businesses.

The reporting is also applicable on transactions between domestically registered taxable person that bear reverse charge vat or exemption from vat.

If someone still uses manual invoices then they shall report all their sales invoices to domestic vat registered entities:

in one day if the vat amount of the invoice reaches or exceeds HUF 500,000
in four days in other cases.

From 2021, the provision of data will be extended to such an extent that only exceptions are mentioned in the legislation:

All invoices must be reported, except:

invoices issued for the supply of goods or services which are effected in another Member State of the Community and which, in respect of the supply of goods or services, satisfy the taxable person’s tax liability under the special rules for taxable persons providing services which may be supplied at a distance.

Subsequently, all invoices will be subject to reporting, including:

invoices issued to individuals (the data will not include the buyer’s personal data)
invoices issued for the supply of goods and services in the Community; and
invoices for export sales.

According to the plan from 2021, the tax office (NAV) will prepare a draft VAT return for taxpayers based on the data provided. Details of this have not yet been published by the tax authority.

We strongly recommend businesses still using manual invoices to switch to using a billing software or online billing. These can be linked to the tax office’s database directly, and so the reports would go instantly and automatically.

VAT report: change in the domestic recapitulative statements (“M-sheets”)

Legislation introduced on 1 January 2013 and amended on 1 January 2015, required taxable persons to complete, as part of their VAT returns, a domestic recapitulative statement on all transactions in which the VAT content reaches or exceeds HUF 1,000,000.
The rules on domestic recapitulative statements changed in 2017 when the reporting threshold was brought down to HUF 100,000.

Currently, in line with the invoice reporting rules, the value limit of HUF 100,000 will also be abolished in the case of domestic recapitulative statements from 1 July 2020. This means all incoming invoices must be included in the recapitulative statement, on the basis of which the taxable person will deduct VAT. VAT-exempt invoices do not have to be entered on “sheet M”.

The recapitulative statement must continue to show the full amount of the tax base and the value added tax on the invoice received, regardless of whether the recipient of the invoice exercises their right to deduct only partially.


Company registration

Is company formation in Hungary limited to foreign nationals?

Is company formation in Hungary limited in any way to foreign nationals and are there any differences in the process?


This question may arise in setting up a company for a foreign national in Hungary. What are the primary steps before founding? For example, register for a client portal account, or acquire a tax identification number or a TAJ (health insurance) number? In what form of relationship can you be an executive of the company? Who can be a delivery proxy?


The establishment of a Hungarian company by a European Union citizen is not restricted. Except, of course, in the cases where a Hungarian citizen would not be allowed to start a company. (e.g., ban). You can be a member of the company, or additionally, an executive too. The managing director has additional obligations, such as opening a company portal account and tasks related to the day-to-day work of the company, eg: compiling accounting documentation, opening a bank account, registering with chambers.


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One-stop-shop company formation in Hungary

Company formation

Before engaging in establishing a business in Hungary, it is worth checking out the benefits Hungary can offer.

The process is the same as for Hungarian citizens. If you do not speak Hungarian, it is necessary to translate the documents required for founding a company. The company formation in Hungary is a legal process and the involvement of a lawyer is required.

There are several forms of companies from which you may choose the right, though we generally recommend a limited liability company.


Delivery proxy

If either the directors or the members of the company do not have a resident address in Hungary, they need to appoint a delivery proxy. The delivery proxy will act not for the company itself, but the directors and the members. If you reside in Hungary and have an official address card, then you do not need a delivery proxy.

The delivery agent will receive the documents addressed to the foreign person in connection with the operation of the company and then has to forward those to him/her. In the case of a document sent to the delivery proxy by a court or other authority, it shall be presumed that the document became known to the foreign person on the fifteenth day after the lawful service to the delivery proxy.

The name (company name) and place of residence (registered office) of the delivery proxy of a foreign legal or natural person not resident in Hungary must be reported to the court of registration upon the establishment of the company.

The delivery proxy can be an organization with a registered office in Hungary or a natural person with a permanent residence. Members of the company, directors, and members of the supervisory board may not act as a delivery proxy.


Client portal account

We recommend that the client portal account be open, but not mandatory. I will write about this below.

A client portal is a tool for managing electronic administration with the government, including tax matters.

To log in to the Client Portal, you need to create a personal Client Portal ID. This is a registration process that you can initiate at any government office. It can be completed at a documentary office, government desk, or tax office customer service and even consular offices. It is worth booking an appointment and indicating if you do not speak Hungarian.

In the case of EEA nationals, an identity card or passport must be presented, otherwise, non-EEA nationals shall show their passport for registration.


Company portal account

After opening the client portal account, you can go on with creating a company portal account to which the company is assigned. You’ll be able to manage all the company related e-communication with the government through the company portal. If you do not speak Hungarian, it is worth appointing a company gate agent who will take over the documents instead.


Health insurance registration

TAJ (health insurance) card and contributions: An EEA national performing directorship duties in Hungary may not be subject to Hungarian social security rules if he/she has been insured in their home EEA country, and can prove this. If you manage the Hungarian company and do not have social insurance in any of the EU member states, then the Hungarian social security will apply.


Personal tax identity number registration

Personal tax identity number: any directors of a Hungarian company need to have a Hungarian tax identity number. This is their private tax id number, separate from the company’s tax numbers. The director, its agent, or accountant can apply for the Hungarian tax identity number. The process can be done at any tax office customer service in person or electronically through the client portal account. The registration can be done by the director, its agent or accountant. A proof of the identity, passport or EEA identity card is also needed to be presented.


Opening bank accounts

The tax regulations require all new Hungarian companies, including those that are established by foreign nationals, to open a bank account in the territory of Hungary. Bank accounts cannot be opened remotely, due to the strict anti-money laundering rules all clients shall visit personally the bank office and go through a client screening process before the bank could offer to open the account.

At least one bank account is a must in Hungary, though any other accounts may be opened outside of Hungary. Virtual or mobile app-based accounts, like for example Revolut, Monzo, Starling or N26 are also acceptable. The bank accounts opened in Hungary are automatically declared to the tax office. Additionally, the company needs to report to the tax office any accounts that are opened elsewhere.

Vat exempt intracommunity delivery

Vat exemption: EU vat number is must from 2020

The most significant change in the EU VAT system in 2020 was the tightening of the conditions for the application of the Community tax exemption with the ‘ must have EU vat number ‘ criteria, and the proof of exportation of a product to another Member State.

However, a number of questions have been raised, mainly about the interpretation of the Community Regulation. Concerning these issues, the tax authority has published two leaflets, the main points of which are described in this article (Proof of delivery of a product to another Member State for intra-Community supplies from 2020; Conditions for exemption from intra-Community supplies – the latter establishing the obligation to have EU vat number).


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Issues related to tax exemption

According to the law, the conditions for the tax-free sales in the Community are as follows:

(1) The product shall be certified as having been shipped to another Member State and shall have been transported by the seller, the buyer or on their behalf.

(2) The goods shall be sold to another person, acting as a taxable person or a non-taxable legal person in a Member State other than that of the dispatch or the departure place of the transport, and the taxable person or non-taxable legal person to whom the sales is supplied shall have a VAT identification number in a Member State other than that of dispatch or departure place of the transport of the goods and communicated this VAT identification number to the seller.

(3) The vendor of the product shall correctly submit his recapitulative statement (“the exemption shall not apply if the taxable person to whom the tax is payable … has failed to fulfill his obligation to submit the recapitulative statement or has done so incorrectly or incompletely”).

In connection with the above, the leaflet sets out two principles (which are more permissive than the first reading of the Directive and Act CXXVII of 2007 on Value Added Tax [VAT Act]).

The first provision relates to the customer’s EU vat number:

“In the absence of the tax identification number of the buyer in other Member States, or in the absence of the communication thereof, the exemption shall not apply. But provided that the tax identification number is subsequently communicated by the buyer (even after the transaction, and tax number was valid at the time the tax became chargeable) and all other conditions for the tax exemption are met, then the seller may apply for the tax-free treatment of the transaction, subject to any necessary adjustments.”

It is worth pointing out that if the customer’s tax identification number in another Member State is only disclosed to the seller ex post, the transaction can be treated as a tax exemption retroactively, subject to the other conditions for exemption.

Most issues – the new condition in the legislation – were raised by the recapitulative statement as a condition for exemption. The tax office leaflet suggests:

“If the taxable person discovers, before commencing the audit, that the recapitulative statement has not been submitted or is incomplete or incorrect, he may rectify it without further justification.”

The lodging of a summary declaration  according to Article 4/A of the VAT Act point I of Annex I is a prerequisite for the treatment of an intra-Community supply of a product as exempt. Where the tax authority finds during an audit that the recapitulative statement has not been submitted or has been incorrectly submitted, it shall provide the taxable person with an opportunity to rectify it, provided that the taxable person certifies that the mistake happened in good faith. If, however, the taxpayer themselves notice the error or deficiency prior to the commencement of the inspection, they may rectify it without further justification.

Proof of delivery of the product

Council Implementing Regulation (CIR) 2018/1912 of 4 December 2018 amending Implementing Regulation (EU) No 282/2011 as regards to certain tax exemptions for intra-Community transactions shall be directly effective and applicable in all Member States from 1 January 2020. This decree was also interpreted by the tax office in a leaflet (Proof of delivery of the product to another Member State in the case of intra-Community supplies from 2020). Three points are worth highlighting:

The first and most interesting question when interpreting the Regulation is the interpretation of the presumption. The Regulation stipulates that if a particular taxable person holds certain documents, he shall be deemed to have dispatched the product: that is to say, they are entitled to a presumption in relation to the dispatch. However, it is not clear how, in practice, the tax office will assess it if the taxpayer does not have all the documents (which are often very difficult to obtain). That is, how does the tax authority act if the taxable person is not protected by the presumption in the Regulation? The prospectus answers this question as follows:

“… If the taxable person supplying the goods is subject to the provisions of Section 45a of CIR and the other conditions for exemption set out in Article 89 of the VAT Act, they may handle the transaction exempt and use these documents to justify the exemption above in the proceedings at the tax office. Thus, if, for example, a taxable person presents documents under the CIR during an inspection, the tax authority may not require additional proof of delivery from the seller unless they are rebutted by the tax office. For example, if the tax authority proves that, contrary to the evidence in the documents, the product has not yet been shipped to another Member State, the presumption is rebutted. In the event the tax office proves that the documents presented do not comply with the requirements of the CIR (eg, they were not issued by an independent party), this means that they do not meet the requirement of Section 45a of the CIR and the presumption of delivery itself is not met. However, in the latter case, the seller shall have other means of proof that the delivery has been completed. ”

If the taxable person presents documents under the CIR, the tax authority may not require the taxable person to provide further evidence to justify the delivery (unless the presumption is rebutted). However, if the presumption is rebutted, the taxpayer may still justify the delivery with other credible evidence as per the article 45a of CIR, or, failing these, any other document evidencing the fact of the delivery.

If the presumption does not materialize, the question arises as to what kind of certificate can be accepted. As regards proof of delivery, the leaflet states:

“However, it is important to underline that the absence of a taxable person’s certification under the CIR does not automatically mean that the delivery of the product is not justified and thus cannot be exempt. Taxpayers will continue to have the possibility, aside from the provisions of the CIR, to prove that the product has been dispatched or transported to another Member State. The latter shall continue to be guided by the tax office leaflet dated 19 June 2013 on how to verify the shipment of the Product to another Member State in the case of intra-Community sales. ”

According to the prospectus, in the absence of the certificates provided for in the new article of the CIR, dispatch may also be justified according to the tax office leaflet previously disclosed on this subject, provided the content and purpose of such other certificates clearly show the fact of shipment to another Member State. It is worth noting that with the above, the prospectus broadens the way of certification, stating that it is not obligatory to apply the regulation (otherwise directly applicable), since the tax office also accepts other documents to prove the delivery.

Another interesting issue was the interpretation of the concept of ‘independent party’, since under the Regulation certificates of delivery can be issued by two parties, independent of the seller and the buyer.

“The CIR does not specify who is to be understood as independent parties for the purposes of this Article. Therefore, to define independent parties, the provisions of Section 259 (13) of the VAT Act shall be applicable, meaning an independent party shall mean a party who is not related to the purchaser or vendor under Section 259 (13) of the VAT Act. ”

Therefore, Section 259 (13) of the VAT Act applies, and according to this – inter alia – related companies are not independent parties. Based on these, for the  CIR 45a., a document from related parties cannot be used as evidence if the taxable person wishes to set up a presumption set out in the regulation.