Mária Lakatos

Taxation in General: Hungarian Tax System

VAT subject (Tax client)

Definition

Vat subject: irrespective of the place, objective and result of the activity, VAT subject is the person or the organization that pursues business activity in his/her/its own name.

Business activity: According to the definition assigned to it by the VAT Act (Áfa tv.), business activity is the pursuing of an activity durably, regularly and in a business-like manner, if it is discharged in an independent form. Business activities are all activities associated with production, distribution, industrial, agricultural activities, the provision of services including also freelancers.

In conformity with the EU legislation, as of 01 January 2004 with regard to their activities as enforcing bodies of the state powers the statute removes the organs of the public finances (the government bodies) from the scope of VAT subjects.

The grouping (classification) of farmers performing business activities and the self-employed is much easier, yet they, as categories, have been created (designated) for performing business activities and work for consideration which means that they are, a priori, subjects to the VAT Act (Áfa tv.). The classification in the Hungarian system of farmers whose firms were created under the laws of some other country is more difficult: if they have a branch in Hungary, then their classification is unambiguous. If not, then they shall become subjects of the VAT, only if they carry out transactions in Hungary which are subject to the VAT Act.

Not-for profit (or charity) organizations again are a separate group yet they render their services for no consideration, accordingly, they do not pay VAT, either. There are, however, exceptions in their respects, as well: for example, if they sell car in the EU, or they regularly sell flats, then they shall be subjects to VAT.

Taxation in General: Hungarian Tax System

Tartalomjegyzék

Kiadó: Akadémiai Kiadó

Online megjelenés éve: 2022

ISBN: 978 963 664 137 5

Taxation is a scheme for the state to provide revenue. The so collected money could then cover the public spending of the government. These are the so-called allocative and redistributive functions of the state budget. Although, taxation theory discusses the various tax types and analyses the various taxation tools very extensively, there is no absolute answer to the question, when and what type of taxation system would be optimal. Thus this introductory book on taxation deals with the three basic types of taxes - the income tax, the VAT and the corporation tax - in a very pragmatic way. There are legal texts and cases from both the international and also from the relevant Hungarian practice.

This book is recommended not only for students of economics but also for law students and practitioners beside anyone who is interested in the basic regulations of taxation.

Hivatkozás: https://mersz.hu/lakatos-taxation-in-general-hungarian-tax-system//

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