A proposal by the European Commission on reverse-charge VAT was one of the topics on the ECOFIN’s agenda in Brussels, where Hungary was represented by Minister for National Economy Mihály Varga and Minister of State for Financial Affairs Ágnes Hornung. Invited by Minister Varga, the finance ministers of countries outside the Euro-zone convened at a working dinner to discuss, among others, the reduction of VAT on Internet services.

Hungary hosted an informal dinner for finance ministers from non-Euro-zone countries on Thursday evening.  Besides briefing participants on the current state of affairs concerning the fight against VAT fraud in Hungary, the Minister also outlined a proposal on the taxation of digital enterprises and the reduction of VAT on Internet services. Representatives of various member states welcomed the Hungarian measure, as it makes the Internet more accessible through a lower tax. Ministers also discussed potential Brexit scenarios and outcomes.

At the ECOFIN session on Friday, the European Commission acquainted attendees with the temporary reverse-charge VAT mechanism. Under the scheme, member states may opt for applying reverse-charge VAT for transactions exceeding EUR 10 000. Hungary’s standpoint is that the reverse-charge VAT mechanism is one of the most efficient instruments against VAT dodgers, but the EC proposal in its current form does not meet all the expectations of aspiring member states, therefore the blueprint should be adjusted accordingly, Minister Varga said.

Commissioner for Competition and former Italian Prime Minister Mario Monti presented a report compiled by the high level group he leads on the reform of EU revenue resources in the post-2020 era. Although concrete talks are scheduled to begin at the end of the year on the basis of an EC report waiting to be completed, Hungary is of the opinion that, for the time being, it is not necessary to introduce new own resources. However, the Government is prepared to examine any proposal aiming to simplify and streamline the system of own resources and ensure fair burden-sharing, Minister Varga pointed out.

Minister for Finance Edward Scicluna of Malta, the country currently holding the rotating Presidency of the EU, outlined an economic working programme. The Maltese presidency is to continue efforts for extending the Economic and Monetary Union (EMU).

Also on the agenda are efforts to bolster the Capital Markets Union and tackle tax fraud and tax avoidance. With regard to investment projects, the Presidency endeavours to finalize talks on the extension of the European Fund for Strategic Investments (EFSI), a major component of the Investment Plan for Europe until the end of May. As the Minister stressed, Hungary supports the programme tabled by the Maltese Presidency.

(Ministry for National Economy)