In the course of Hungary’s accession to the European Union, within the framework of alignment with the acquis, the facility of the VAT warehouse appeared as a new concept in the VAT Act, replacing to some extent the status of free zones that were discontinued with accession.

The Act qualifies the sales of Community goods stored on the area of a VAT warehouse as tax exempt. Of course, it must be satisfactorily proven that the goods removed (sold) from the VAT warehouse have actually left the territory of Hungary.

From the perspective of economic operators this means that sales between two economic operators (as chain transactions or even as triangular operations) can take place within the area of one VAT warehouse free of tax! In this way the burden of financing VAT is eliminated and administration becomes simpler, as it is the responsibility of the operator of the VAT warehouse to prove towards the authorities that the goods stored and removed from the VAT warehouse have actually left the territory of the country. 

Based on the above, the logistical costs of a supply chain may be considerably reduced and the time it takes for goods to reach the market becomes shorter and easier to plan. The burden of financing VAT is eliminated, while administrative tasks and liability are taken over by the operator of the VAT warehouse thus reducing the business risks incurred by the economic operator.