Hungary: VAT Act

moneyThe Hungarian Parliament has approved  an amendment to the VAT Act to abolish VAT liability on donations. According to the new rule, which has entered into force on June 17, donations (products or services)  provided to non-profit organizations, major non-profit organizations in the public interest and churches will be exempt from VAT. Pursuant to this amendment, such donations will be considered as neither the provision of a service nor sale or purchase of a product. The law specifies some further conditions regarding grants, bequeaths and donations.
The most relevant aspect is that there should be a genuine public-interest purpose behind any donation, provable using documentary evidence and/or other evidence; there should be no financial benefit on the part of the donor (although a reference to the name or activity of the donor will not be considered a financial benefit); an acknowledging certificate must be issued by the recipient for all donations received.

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