The rapidly growing area of e-commerce is regulated on European level as well as by Hungarian legislation. When operating your business activities through an eShop, you should be aware of all the related legal conditions. We have outlined the most important ones in our infographic.
OPERATING THE BUSINESS ON LEGAL GROUNDS
Anyone capable of invoicing, therefore both natural and legal persons (entrepreneur) could start an eShop. However, mail order, trade via internet activities must be declared at the local government.
The trader must be registered at the local body of the Hungarian Chamber of Commerce and Industry. Also, for compliant operation of an eShop, comprehensive documentation is required, such as proper and detailed General Terms and Conditions (which must meet several requirements regarding their contents), Privacy Notice (compliant with GDPR), documentation regarding the right of withdrawal within 14 days, warranty, etc.
Consumers are protected via different institutions and rights. The seller/operator of the eShop is required to provide sufficient amount of information regarding the goods, their specifications, prices etc. sold on the platform. Moreover, consumers have special rights just from the fact that they are buying goods through the means of distance communication, and they have to be informed about them by the operator of an eShop.
PROTECTION OF CONSUMERS
The most important right is the consumer’s EU-wide right to withdraw from a purchase contract (return undamaged goods even after having it tried) in 14 days statutory period without reasoning, and get a refund – with some exceptions due to the nature of the goods.
As for the warranty, the period covered by warranty rights rises with the value of the purchase (1, 2 or 3 years).
CONSUMERS' PERSONAL DATA PROTECTION
If you are processing personal data of your clients, requirements of personal data protection regulations need to be fulfilled, in particular of the GDPR (General Data Protection Regulation). This includes providing detailed information on data processing, possibility to erase data, having the personal details only stored and processed if specifically agreed, etc. Failure to comply with the GDPR provisions poses a risk of a possible penalty.
As an eShop operator and seller, one should inspect their own tax duties especially the ones regarding value-added tax (VAT). There can be several available schemes depending on the size, type and other factors of the eShop. When invoicing, however, special attention should be given to online invoice data reporting and the rules of invoicing.
The consumer protection authority can fine the operator, if they find the eShop not compliant. The amount of the penalty may differ by several factors, but it can be posed up to HUF 2 billion. The data protection authority can also pose fines. In respect of tax-related questions, the tax authority can sanction the taxpayer.