Hungary: New import VAT deduction requirements include partner due diligence obligations

Introduction of partner due diligence obligation for indirect customs representatives

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March 18, 2025

The Hungarian tax authority on March 1, 2025, implemented changes to the value added tax (VAT) law affecting the assignment of import VAT deduction rights to indirect customs representatives. Read TaxNewsFlash

Under the new rules, reliable taxpayers can assign the right to deduct import VAT to indirect customs representatives without partner due diligence, while high-risk taxpayers cannot assign the deduction at all. For importers not classified as reliable, indirect customs representatives must conduct partner due diligence before entering into contracts and monthly thereafter. The diligence process involves data collection and evaluation, with assistance from the tax authority available.

Indirect customs representatives must report due diligence results to the tax authority electronically by the contract's conclusion and by the 10th day of the following month. The VAT return requirements have also expanded to include specific data related to affected imports.

 Read a March 2025 report prepared by the KPMG member firm in Hungary

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