Hungary’s parliament is currently discussing Draft Bill T/9724, which proposes to extend the retail sales tax to include online marketplaces.
The bill is expected to go into force on 1 January 2025.
Hungary implemented a retail sales tax on goods sold to consumers in 2020. This tax applies to both resident and nonresident entities involved in retail trade activities. The retail tax applies to various activities, including food and beverage sales, electronics, books, toys, medicines, clothing, furniture, tobacco, fuel, and vehicles.
The tax base is determined as the net turnover from retail trade for the tax year. The rules vary for various taxpayers, including those with individual income tax. However, VAT is exempt from domestic sales for nonresidents.
The retail tax employs a progressive rate structure, which is as follows:
- 0% on annual net sales up to HUF 500 million;
- 0.1% on sales from HUF 500 million to HUF 30 billion;
- 0.4% on sales from HUF 30 billion to HUF 100 billion;
- 2.7% on sales above HUF 100 billion.
The draft bill proposes amendments to include nonresident or resident digital platform operators with online marketplaces for retail sellers in the taxpayer scope. According to Hungarian law, the definitions for online marketplaces and operators are the same as those used for DAC7 reporting. Therefore, a “digital platform” refers to software like websites or mobile apps that connect sellers with users to conduct relevant activities.
The proposal states that platform operators will be responsible for collecting retail sales tax on goods sold for retailers and their own retail activities. Retailers using online platforms won’t be liable for sales tax on these transactions. Additionally, the tax base for nonresidents will expand to include domestic and foreign sales. Currently, only Hungarian sales are considered in the tax base.
