VAT News

EC-Letter of formal notice sent to Hungary

The EC has recently sent a letter of formal notice to Hungary. The EC stated that Hungary's Electronic Trade and Transport Control (EKAER) System is not compatible with the EU VAT Directive, because it primarily affects cross-border EU transactions and introduces administrative formalities connected with those transactions.

Under the existing EKAER system, all companies must provide, for VAT purposes, the Hungarian tax authorities with detailed information on certain business-owned transport that use public roads in Hungary.

Hungary now has 2 months to respond, and following this the EC may issue a reasoned opinion.

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