Tax and Parcels

Old Jul 30th 2020, 9:55 am
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Default Tax and Parcels

Hi all.

I really do need to get out of the UK, and Hungary seems like it will be somewhat immune from what's going on.
I want to move my businesses there with me.

However, the VAT rate in Hungary is 27% which is idiotic I know, but does anyone know if there is a threshold like there is in the UK (about £80000+)?

Courier services: I've spoken to DPD and they want 33 Euros to send a parcel to the UK, which would destroy my businesses in a shot. Is there any cheap and reliable service so that eCommerce businesses can exist in Hungary?
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Old Jul 30th 2020, 10:37 am
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Default Re: Tax and Parcels

Hi
There is a VAT threshold - I think it is 12 million HUF turnover p/a

33 euro for a parcel to the UK is about what I pay to get parcels from the UK to here - that is by carrier, small packets by post are different.

Goods ordered on-line for delivery in Hungary are about 1600 HUF to 2100 HUF per order, This varies with size and weight and whether a pick up point is used or house delivery is requested. Some on-line shops give free delivery over a certain amount e.g. 30,000 HUF order price.

Whilst VAT is 27% company tax is currently 9% reduced from 12% because of the covid 19 impact. Last year company tax was 16%, reduced to 12% this January.

I have found DPD the cheapest.

If you are thinking of moving and running a UK based or orientated business from Hungary - don't forget that Brexit could/will change the current rules to who knows what on Jan 1st next year.
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Old Jul 30th 2020, 12:26 pm
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Default Re: Tax and Parcels

Peter, I am glad you have had good luck with DPD. My experience was horrible, They lost 2 inbound shipments to me in less than 6 months from eBay UK. They returned an item as undeliverable twice from another vendor that was properly addressed because the driver was running late and couldn't be bothered to bring it over the next day. My neighbor sells items on eBay UK that are sourced from here and had them lose or destroy more than 3 items in 1 month. She almost had her eBay account closed because of DPDs uncaring attitude. I used to enjoy ordering items from the eBay UK site but because DPD is often the shipper that Pitney Bowes (eBays international shipping contractor) selected to deliver my items eBay lost my business forever because of the poor service here between Kaposvar and Pecs area that DPD provides. Rant over. I have had great service with DHL, UPS and GLS.
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Old Jul 30th 2020, 1:11 pm
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Default Re: Tax and Parcels

Thanks for the info.
DHL are quoting £249 to send an 8kg package to the UK (lol).
UPS is £28.
GLS is £47.

Was hoping for about a tenner, so the problem I'd have is that I wouldn't be able to manufacture in Hungary, although VAT @ 27% would put a stop to that anyway.
I think that they would prefer British retirees rather than British business owners.
Orban did say a couple of years ago that he would welcome Western refugees.
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Old Jul 30th 2020, 1:44 pm
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Default Re: Tax and Parcels

Originally Posted by GoWhere
Was hoping for about a tenner, so the problem I'd have is that I wouldn't be able to manufacture in Hungary, although VAT @ 27% would put a stop to that anyway.
Audi have a big plant here not withstanding the VAT rate in Germany was 19% (before crovid 19 stimulus package) and they seem to think it works as do lots of other manufacturing and assembly plants. Oh and Airbus have announced a new plant in Hungary due to go live in 2022.

If you are thinking of manufacturing stuff here do some proper costing bearing in mind the minimum wage here vs. the UK not to mention property prices etc. The 7% additional VAT has to be part of the whole picture.

Are you selling to the public or to business. If it is to business then the VAT is reclaimed anyway with an amount of paperwork yet to be defined by Brexit
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Old Jul 30th 2020, 1:48 pm
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What about Post Office for sending things from Hungary ?
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Old Jul 30th 2020, 1:54 pm
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Default Re: Tax and Parcels

After thought
I am just ordering some parts for my Land Rover. Shipping costs are £18 up to 30kg. I would expect the parts firm has a bulk contract with the shipping firm and so gets better than 1 off rates.

Gowhere - perhaps talk to shipping firms about quantity discounts.
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Old Jul 30th 2020, 1:56 pm
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Default Re: Tax and Parcels

Originally Posted by Peter_in_Hungary
Audi have a big plant here not withstanding the VAT rate in Germany was 19% (before crovid 19 stimulus package) and they seem to think it works as do lots of other manufacturing and assembly plants. Oh and Airbus have announced a new plant in Hungary due to go live in 2022.

If you are thinking of manufacturing stuff here do some proper costing bearing in mind the minimum wage here vs. the UK not to mention property prices etc. The 7% additional VAT has to be part of the whole picture.

Are you selling to the public or to business. If it is to business then the VAT is reclaimed anyway with an amount of paperwork yet to be defined by Brexit
I'd be selling to customers in the UK and USA, so as the business falls below the VAT threshold in the UK, that's not added on, although it would be above the threshold in Hungary, so an extra 27% plus big shipping prices would be a problem. Of course, some of the VAT would be claimed back in materials used for production, the saving would be swallowed up by the cost of admin to some degree. VAT acts as a brake on economic activity.

Hungary's a funny one, because although the cost of living is lower, the cost of materials and products can still be quite high.

Brexit won't hinder trade. That was just a scare story used to try and keep us in the EU. That's if Brexit actually happens. There's still uncertainty about that.
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Old Jul 30th 2020, 2:00 pm
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Default Re: Tax and Parcels

Originally Posted by scot47
What about Post Office for sending things from Hungary ?
The post office is good for letters, which I will also be sending, although I've heard some say that things tend to go missing in the Hungarian postal system.

I've contacted DPD for a discount but I don't think my current volume would qualify.

On a side note, I've been scrutinising the housing prices for a few months (West and North of Balaton) and have noticed that many prices seemed to have jumped somewhat over the last two weeks.
Do you think they have heard that loads of Brits are Hungary-bound?

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Old Jul 31st 2020, 1:10 am
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Default Re: Tax and Parcels

Unless your product is UK specific why not change your target market to Germany or similar?
Come Jan 1st you won't need to worry about EU export / UK import tax, no expensive delivery fees, no red tape and no paperwork coming out your whatnot.

Alternatively have you looked at fulfilment businesses in UK?
They will store, pick, pack and ship your products in the UK, you will even benefit from the bulk rates they get from carriers.
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Old Jul 31st 2020, 2:50 am
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Default Re: Tax and Parcels

Originally Posted by GoWhere
I'd be selling to customers in the UK and USA, so as the business falls below the VAT threshold in the UK, that's not added on, although it would be above the threshold in Hungary, so an extra 27% plus big shipping prices would be a problem. Of course, some of the VAT would be claimed back in materials used for production, the saving would be swallowed up by the cost of admin to some degree. VAT acts as a brake on economic activity.

Hungary's a funny one, because although the cost of living is lower, the cost of materials and products can still be quite high.

Brexit won't hinder trade. That was just a scare story used to try and keep us in the EU. That's if Brexit actually happens. There's still uncertainty about that.
Brexit is happening. There's no doubt about that. There maybe an extension but it will still happen.
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Old Jul 31st 2020, 9:32 am
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Default Re: Tax and Parcels

I looked at Fulfilled By Amazon but the products are often customised, and I'd also have to fill a shipping container.
I do seIl to some Germans and French.

As for Brexit, there is plenty of time for them to betray us, because they have done so for four years. Giving us a "semi-Brexit" is not Brexit; it's remain. We'll have to see.
Anyway, the EU could well collapse. A trading and co-operating group of countries would be better than a globalist dictatorship-in-the-making.

If only I could be sure of business being viable, I'd buy a place in Hungary right away. We're in so much trouble back here in the UK. It's no longer possible to fix the problems in a peaceful and democratic way.
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Old Jul 31st 2020, 11:38 am
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Default Re: Tax and Parcels

Originally Posted by GoWhere
Brexit won't hinder trade. That was just a scare story used to try and keep us in the EU.
If only that were true, Brexit is affecting my business and I know various others who are having issues or have had EU suppliers pull out of agreements. There are lots of fulfilment centres in the UK though, if Amazon doesn't work for you.

Once we're out of the EU, will import charges/tax be due in customs on anything you ship to the UK? I've no idea but it's something to check in to, that would bump the cost up even higher to your customer. And you've looked in to the visa requirements for moving to Hungary post transition period? I don't know if it will have requirements like Spain etc in terms of minimum income to be able to live there, but if so you might want to try and move before the end of the year if you can so that you don't have the pressure of needing to earn x amount?
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Old Jul 31st 2020, 11:53 am
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Default Re: Tax and Parcels

christmasoopa - you're right to advise GoWhere to move before the end of this year.

GoWhere - Brexit will happen. Who will betray us? BJ campaigned for Brexit so why would he change his mind? BJ has banged on about 'No Deal' if EU pulls up the drawbridge and negotiations are not favourable to the UK. I'd advise you to plan ahead that Brexit will happen rather than the possibility we will end up as Remain! You've only got five months to do something.
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Old Jul 31st 2020, 12:12 pm
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Default Re: Tax and Parcels

Johnson was a remainer before he realised that pretending that he was a Brexiteer would afford him the opportunity to be a "second Churchill", something which he has now squandered. He just a careerist.
Yeah, the plan would be to make the move sooner rather than later because of Brexit, but also because of other things. For example, if Trump loses (unlikely), then living in Hungary will be a lot safer than living in the UK.

Anyway, it's not governments who trade with each other; it is people. Therefore, the pressure on governments to facilitate trade comes from the people who want to trade.
Continental Europeans have a tendency to blindly trust authority, so of course some will be spooked by Brexit, because their leaders want them to be spooked, but there is no need. Everything will be just fine trade-wise.

Stressful times at the moment.
In the UK, rural houses are being bought without even being seen such is the desperation of the indigenous people to get out of the cities.
I bet that life in Hungary at the moment is somewhat more relaxed.
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