In order to combat tax fraud in agriculture, from 1 July 2012 the regulations of reverse charge taxation shall be applied for trade transactions between domestic taxpayers for certain cereals, oilseeds and protein crops (corn, wheat, barley, rye, oat, triticale, sunflower-seed, rape and rape-seed as well as soybean).

Reverse taxation – meaning that the seller does not charge VAT for a taxable produce sale as the buyer is liable for paying VAT – is a kind of taxation mechanism which can effectively contribute to combating VAT fraud methods typical at certain agricultural segments. Consequently, the implementation of reverse charge VAT boosts the competitiveness of honest market participants over tax evaders. The measure increases transparency in the economy in general and in grain trade in particular.

We call your attention that taxpayers at issue shall provide information for the National Tax and Customs Administration of Hungary (NAV) about the new domestic transactions liable to reverse charge VAT.

Information on reverse charge taxation applicable from 1 July 2012, obligation to supply information and tariff categories regarding the kinds of produce at issue is available on the NAV homepage.

(Ministry for National Economy)