Shipping parts by road to or from Hungary? Read on
As a consequence of recent tax law changes in Hungary, as of January 1,
2015 certain activities relating to road transport may solely be carried out by
taxpayers who are in possession of a valid identification number (EKAER number)
issued by the Electronic Control System of Road Transport (Hungarian
The main purpose of this new obligation is to prevent VAT fraud and the nominal transportation of goods. Using the online EKAER system the tax authority will be able to track the real route of goods transported to, from or within Hungary.
involving road transport
Road transport activities which are subject to road fee as set out by the Road Fee Act (i.e. transport carried out by means of a vehicle exceeding a total weight of 3.5 tons) are subject to the new reporting liability. However, the transportation of “high risk products” carried out by vehicles with a weight of less than 3.5 tons should also be reported, if either the weight or the value of the transported products exceeds certain amounts. A further liability in connection with the transportation of high risk products is the provision of a “risk guarantee”. High risk products include. petroleum jelly, paraffin wax, cyclic hydrocarbons, lubricating preparations, solvents and thinners, etc.
The activities subject to this reporting liability are the following:
- intra-Community acquisition of goods;
- intra-Community supply of goods; and
- first taxable domestic supply of goods to a non-end customer.
In the case of intra-Community acquisition of goods from an EU Member State to Hungary the reporting obligation should be fulfilled by the recipient/consignee of the transportation by the time the transportation begins. In the case of intra-Community supply of goods from Hungary to another EU Member State the reporting obligation should be fulfilled by the sender/consignor/loader of the goods before the loading of the goods begins. In the case of first taxable domestic supply within the territory of Hungary the reporting obligation should be fulfilled by the sender/consignor of the goods before the loading of the goods begins. In all cases, the EKAER number remains valid for 15 days from the issue date and must be provided to the transporter of the goods.
If the taxpayer fails to report the road transport activities, then the unreported product will qualify as a product of uncertified origin. Moreover, the tax authority may assess a default penalty up to 40% of the value of the unreported product and seize products to the value of the assessed default penalty.
on the automotive supply chain?
This new reporting requirement could potentially have a significant impact on the supply chain of Odette members who are shipping components or materials to or from Hungary. Odette needs to ensure that its communication standards and best practice recommendations are capable of meeting the new requirements so, if you supply or purchase parts from Hungary, we would like to know if this new reporting requirement has had any impact on your supply chain operations or your supply chain communications. Please contact us by email on firstname.lastname@example.org