Hungary - ECommerceHungary - ECommerce
Citing the boost e-commerce could give Hungary’s productivity and innovation, the Hungarian government continues to place a high priority on advancing this sector. E-commerce had a slow start in Hungary but has been booming in the recent years. The most developed segment is E-banking.
The Hungarian electronic retail sector closed 2014 with an all-time high HUF 273 billion turnover, which was 3.7% of the total retail turnover followed by a meaningful fall to HUF 229 billion and 2.5% in 2015. The reasons are unclear however, since the volume of e-commerce has been growing with a steady 30-40% yearly in the last five years.
Online retailing has been growing steadily since 2010. The online retailing and webshop-concept have been mushrooming. Most frequently purchased products via online were books, coupons, IT and electronics gadgets, insurance services, e- tickets, holiday reservations. Over 70% ordered the product with home delivery, and most Hungarian online shoppers prefer payment upon delivery. Both males and females use online retailing equally. The majority of e-commerce revenue, almost 40%, is generated in the last two months of the year as a result of the shopping frenzy before the holidays.
In addition, the average value of the online shopping cart is higher than that of traditional purchases. The average cart size has increased from HUF 7,500 to HUF 11,600 during the last five years. Online customers are therefore more inclined to spend a bigger sum at one go. In 2015 there were roughly 6,000 web shops registered in Hungary.
The Electronic Commerce Directive (2000/31/EC) mentioned in the direct marketing section above provides rules for online services in the EU. It requires providers to abide by rules in the country where they are established (country of origin). Online providers must respect consumer protection rules such as indicating contact details on their website, clearly identifying advertising and protecting against spam. The Directive also grants exemptions to liability for intermediaries that transmit illegal content by third parties and for unknowingly hosting content. The European Commission released a work plan in 2012 in order to facilitate cross-border online services and reduce barriers and released a report on implementation of the action plan in 2013.
Key Link: http://ec.europa.eu/internal_market/e-commerce/directive_en.htm
The EU applies a Value Added Tax (VAT) on sales by non-EU based companies of Electronically Supplied Services (ESS) to EU-based, non-business customers. U.S. companies that are covered by the rule must collect and submit VAT to EU tax authorities. European Council Directive 2002/38/EC further developed the EU rules for charging Value Added Tax. These rules were indefinitely extended following adoption of Directive 2008/8/EC.
Businesses affected by EU Directive 2002/38 are either U.S.-based and selling ESS to non-business EU customers, or are EU-based businesses selling ESS to customers outside the EU. There are a number of compliance options for businesses.
The Directive creates a special scheme that simplifies registering with each member state. The Directive allows companies to register with a single VAT authority of their choice. Companies have to charge different rates of VAT according to where their customers are located, but VAT reports and returns are submitted to just one authority. The VAT authority responsible for providing the single point of registration service is then responsible for reallocating the collected revenue among the other EU VAT authorities.
For more, go to the EC website:
Hungary eCommerce Industry Trade Development and Promotion eCommerce