ANNOUNCED AS TEMPORARYNo
Import-related non-tariff measure, nes
On 7 October 2013, the European Commission issued Regulation No. 1042/2013, introducing a new VAT regime for telecommunications and broadcasting firms as well as B2C providers of electronic services, with effect from 1 January 2015.
Under the current regime, EU firms are VAT taxed in the member state where they were established, whereas non-EU firms are taxed where the customer 'belongs' (i.e. where the person is established, has his permanent address or usually resides). This means that, for example, a Luxembourg firm selling in Hungary is taxed at the Luxembourg VAT rate of 15%, while an American company selling the same product in Hungary is taxed at the Hungarian rate of 27%.
From 1 January 2015 onwards, all companies will be taxed in the member state where the costumer belongs, regardless of whether the company is established within or outside the EU. In addition, the regime will henceforth be the same for B2B services as for B2C services, since the former services were already taxed where the recipient is established regardless of the domicile of the supplier.
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