Hungary VAT guide
Hungary VAT guide for businesses
Value Added Tax (VAT) was introduced in Hungary in 2007. The detailed rules for returns, submission deadlines, payments and how to appoint a fiscal representative are set out in the Tax Procedures and the Tax Administration acts.
VAT compliance is administrated by the National Tax and Customs Administration (NTCA).
Menu
What is the VAT rate in Hungary?
27%
The standard VAT rate in Hungary is 27% which is the highest in the European Union (EU). The standard rate applies for most of the goods and services. However, Hungary also has two reduced VAT rates.
Reduced rates: 18% and 5%
The rate of 18% is applicable for basic dairy and cereal products. The rate of 5% is applicable for medicines, medical equipment, books, animals and meat.
VAT registration in Hungary
Resident businesses
Hungarian-established businesses must register for VAT once annual turnover exceeds HUF 20 million
Non-established businesses
There is not VAT threshold in Hungary. VAT registration is required from the first taxable supply in Hungary, unless One-Stop Shop rules apply.
Distance sales: Businesses carrying out distance sales of goods are not obliged to register if their total EU-wide distance sales are below the €10,000 threshold. Once exceeded, VAT must be accounted for in the customer’s country via OSS or local VAT registration.
VAT return filing and deadlines
In Hungary, the VAT return frequency depends on the taxpayer’s net VAT payable.
- Where the net VAT payable is below HUF 250,000, the filing frequency is annually.
- Where the net VAT payable is between HUF 250,000 and HUF 1,000,000, the frequency is quarterly.
- Where the net VAT payable is HUF 1,000,000, or more, the filing frequency is monthly.
Newly VAT-registered taxpayers generally file monthly returns during the initial period of registration.
Deadlines
- Monthly and quarterly VAT returns are due by the 20th day of the month following the reporting period.
- Annual VAT returns are are due by 25 February of the following year
- If a deadline falls on a weekend or public holiday, it is deferred to the next working day
- Filing extensions are not available
Invoicing requirements
There are certain requirements regarding the content of an invoice, which includes:
- The date of issue, and the one on which the goods or services were supplied.
- A unique sequential number.
- The supplier’s full name, address and registration number.
- The customer’s full name and address.
- In case of a reverse charge transactions, the VAT ID of the customer, and a note indicating that reverse charge should be applied.
- For intra-Community supply of goods, the customer VAT ID and a note that the transaction is an ‘intra-Community supply of goods’.
- For triangulation, an explicit reference to EC triangulation simplification and an indication that the person in receipt of the goods is liable to account for the VAT due on the supply.
- Quantity and nature of the goods.
- Extent and nature of the services.
- Unit price, exclusive of VAT.
- The payment received net of VAT.
- Discounts or price reductions.
- Breakdown by the rate of VAT.
- Total VAT payable.
- In case an early payment is made prior to the completion of the supply, the date on which the payment on account was made (only if that date differs from the date the invoice was issued).
- The full name and address and the Member State’s VAT number of the tax representative (if a tax representative is liable to pay the VAT in another Member State).
- If the invoice is issued in a foreign currency, the Hungarian Forint (HUF) amount should also be indicated.
Comply – Global VAT compliance management
Our VAT compliance solution, Comply helps companies manage their complex, country-specific tax requirements including Hungary’s VAT obligations.
Using AI and machine learning, our technology puts your VAT data through over 300 automated VAT rules, checking for errors, and preparing VAT returns for approval and submission. Comply provides a full audit trail for the Hungarian Tax Authorities.
Deadlines and submission
VAT returns are due to be submitted by the 20th day of the month following the reporting period. If the submission deadline falls on a weekend or a bank holiday the filing due date is moved to the next working day. In Hungary no extension can be requested.
Businesses can complete and submit their VAT and VIES returns online via the representative’s e-filing account. Paper filing is not available for VAT returns.
Electronic public road trade control system (EKAER)
The Electronic Public Road Trade Control System (EKAER) system was introduced in 2015 by the Hungarian Tax Authority. The purpose of this system is to reduce the possibility of VAT fraud in the road transport industry. The scope of the reporting obligation included certain domestic transports, movement of goods from Hungary to another member state and the movements of goods from another member state to Hungary. The regulation introduced the category of high-risk goods where the movement was reportable even though the transport vehicle was not subject to road tolls.
As of 1 January 2021, the scope of the EKAER reporting obligation was decreased significantly. Currently, the goods that were previously identified as high-risk goods are the subject of reporting.
In case of erroneous reporting the tax authority is entitled to impose default penalty up to 40% of the erroneously reported goods.
Real-time reporting
As of 1 July 2018, the Hungarian real-time invoice reporting (RTR) obligation came into force. Accordingly, all domestic sales invoices should be reported where the customer is a Hungarian VAT payer and the charged VAT exceeded HUF 100,000. The reporting must be performed without any human intervention.
The new reporting should be performed directly from the invoicing or ERP systems in a given XML structure. The new obligation replaced the sales ledger listing which was the annex of the periodic Hungarian VAT return.
From 1 January 2021, all B2B and B2C transactions shall be reported to the Hungarian tax authorities in real-time, regardless of whether any VAT is charged or the transaction amount.
The tax authority also introduced the updated version of the Hungarian online invoice reporting system ’Online Invoice 3.0’. In the new scheme the online reported data can serve as e-invoice. In this case, no invoice is created separately.VAT return.
Rise Above the Rest
Maximise your potential with our full suite
VAT compliance solution
Rise above complex indirect tax challenges with Comply, Fintua’s revolutionary platform for global indirect tax compliance.
VAT recovery solution
Recover automates the process of identifying and reclaiming VAT on business expenses, both domestically and internationally, helping you boost your bottom line.
Integrated payments solution
Pay simplifies international payments, reducing complexity and costs while ensuring compliance with local regulations and improving financial visibility.
eInvoicing solution
eInvoice enhances efficiency by digitising your einvoicing process, ensuring compliance across multiple jurisdictions and improving cash flow management.