Two-thirds of Hungary’s online customers order their goods from sellers inside and outside Hungary. Until 1 July 2021, consignments with a lower value than EUR 150 (except for alcoholic products, perfumes, grooming water and tobacco products) were exempt from import duties. If the value of the consignments were lower than 22 EUR, they were even exempt from VAT liability, which is 27% in Hungary, and one of the highest in Europe.
Since 1 July 2021, this VAT exemption has been canceled for consignments from non-EU countries, but advantages for import duties remain in force. On the other hand, the EU introduced administrative simplifications for goods under EUR 150, with less information having to be given on import declarations. Connected to administrative simplifications, a new change was implemented in Hungary. The tax authority now informs private individuals who have submitted a goods declaration with a value lower than 150 EUR about the release of goods by electronic communication instead of by a decision. Excise goods are an exception to the rule.
For VAT payments, there are now two options. Sellers from outside the EU can register into the Import One Stop Shop (IOSS) system. Using this system, the customer pays VAT to the seller at the time of purchase. It is enough to register only in one EU Member State, and the VAT is divided between the Member States according to the posting addresses. The second option is the Special Arrangement (SA), which generally affects companies performing postal or parcel delivery services.
There are more options to speed-up the process of certifying customs and VAT payments and so releasing the goods from customs procedures prior to recording the payment on the tax accounts by the State Treasury. The first one is the Electronic Duty Payment. The bank informs the customs authority about the money transfer electronically based on its agreement, although the payment has not been booked yet on the taxpayer’s tax account. After being informed, the customs authority releases the goods. The second option is the Instant Payment System. There is no need to conclude an agreement between the bank and the Hungarian State Treasury. For an amount under HUF 10 million, the money is transferred immediately and the Hungarian State Treasury informs the customs authority about the payment. The third option, available since 1 July 2021, is payment via VPOS by credit card. This option is available for an amount under EUR 150 only. The bank informs the authority about the successful transaction and the goods can be released.
A further change relates to the language used in customs procedures and aims to harmonise the Hungarian rules with the EU’s. Since 1 July 2021, English item descriptions can be used in goods declarations, if consignments are under 150 EUR. Moreover, the general 8 day administration ‘window’ for judging exclusions, certificate requests and objections to delivery has been increased to 30 days. An important change is connected to the penalties. Previously, if the unpaid duty was less than HUF 50,000, the Hungarian tax and customs authority was able to apply reduced penalties. This threshold is now HUF 100,000. Finally, the customs authority can give an electronic certificate for penalty payments made in cash, instead of giving a receipt that is filled out manually.
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