Internet commerce can be dangerous

The tax auditors of the National Tax and Customs Administration (NAV) in Budapest and Pest County experience almost twice as much abuse in e-commerce as in the case of other forms of sales examined in the region, where the rate usually ranges from 30 to 33 percent. According to NAV's Central Hungary Regional Tax Directorate on Wednesday, internet commerce is the focus of tax auditors due to the large number of abuses detected during inspections. The fact that a business operates through the internet does not exempt it from complying with tax legislation, the tax authority emphasizes. The lack of a document issue is often explained by traders as merely resellers, the receipt is not their business. NAV cited as an example the specialty water distribution company from which tax auditors ordered goods online and forecast their billing needs. However, no receipt was received upon personal receipt of the product.

In another case, the inspectors also bought a discount coupon for artificial nail construction ordered on the World Wide Web, but they waited in vain for a receipt or an account when it was redeemed. The service provider eventually took out the stamp and receipt block of a nonprofit foundation, saying he was an employee of the foundation. In addition to concealing the revenue, the audit revealed that the service provider was not declared. The tax law must also prove the sales of the company that carries out its economic activity via the Internet with an appropriate document, NAV emphasized.

For most transactions, the invoice may be the appropriate form. There is usually no obstacle to issuing an invoice anyway, as the necessary data, the name and address of the buyer are usually fully available to the seller based on the order. The seller may be exempted from issuing the invoice if the buyer is not subject to value added tax, is not a taxable person, the amount of consideration including tax does not reach the amount corresponding to HUF 900 thousand, and it is paid in full at the latest. In such a case, however, if the buyer does not request an invoice, it is obligatory to send a receipt, NAV has called attention. [MTI]