On 2nd October 2018, the Council of Economic and Financial Affairs (ECOFIN) adopted Council Implementing Decision 10892/18. This authorised Hungary to increase the small enterprise exemption threshold for established businesses to HUF 12 million from the current level of HUF 8 million. This change is to have effect from 1st January 2019.
At the moment in Hungary all established businesses are required to register for Hungarian VAT purposes regardless of turnover. However, if a taxable person’s annual turnover doesn’t exceed the specified threshold for small enterprises, it can choose to apply this special scheme under which it neither charges nor recovers VAT.
The measure is expected to reduce small businesses’ VAT compliance obligations and consequently, decrease their administrative costs.
The distance selling threshold remains unchanged at EUR 35,000.