Hungary Hungary

Goods

Web: Hungary’s Tax Agency

 

VAT Standard rate

27%

 

VAT Reduced rate

18%

  • cereals, flour, starch or milk
  • entrance to open-air festivals

 

5%

  • some foodstuffs
  • human medical products, radioactive medical isotopes, dietary foods for special medical purposes, medical oxygen
  • some pharmaceutical products
  • books, newspapers and periodicals

 

Threshold

From the 1st July 2021, the distance selling thresholds were withdrawn and replaced by a unified threshold of 10,000 EUR for all EU members.

 

Deductible VAT

VAT due or paid on the following transactions can be deducted:

  • domestic supplies of goods or services and transactions treated as such
  • intra-EU acquisitions of goods and transactions treated as such
  • importation of goods

Registration procedure

Registration (application for a tax number, community tax number) is performed by the submission of the following documents:

  • form 21T201, which must be submitted in a paper-based format in 2 copies to the Tax Authority of first instance with territorial jurisdiction, or electronically via the Client Gate in one copy
  • the certified Hungarian translation of the certificate of incorporation
  • specimen signature
  • certificate from the competent tax authority with jurisdiction over the seat of business to the effect that the company has domestic tax residence in the given country, and
  • if, in violation of the law, the registration obligation is fulfilled only after the commencement of the business activity, the starting date of the activity must also be provided

The documents verifying the data provided by the taxpayer can be attached to the form in the form of photocopies. If the form is sent electronically, the documents can be enclosed in a scanned format.

Tax representative

Taxable companies established outside the European Union are obliged to appoint fiscal representatives in order to handle all formalities related to VAT registration and filling.

VAT returns filing date

The value added taxable person is required to submit the recapitulative statement with the same frequency as the tax return frequency. Accordingly, as a general rule, the taxable person liable for monthly VAT return shall submit it on a monthly basis, by the 20th day of the month following the month in question, the taxable person liable for quarterly VAT return shall submit it on a quarterly basis, by the 20th day of the month following the quarter in question to the state tax authority at the same time as the return, and in the same way as the return, electronically.

VAT payment date

Periodical VAT returns must be submitted by electronic means to Hungarian VAT authorities before the 20th day of the month following the tax period [month/quarter], and annual returns by February 25th of the year following the reference tax year.

Keeping records

All records and supporting documents should be kept for 8 years.

Penalties

Penalties for violation of deadlines or failure to provide information can be up to HUF 500,000.

Digital services

Web: Hungary’s Tax Agency

 

VAT Standard rate

27%

 

VAT Reduced rate

5%

Internet access services

 

Threshold

Tax threshold is 10,000 EUR for digital services.

Pieces of evidence

To identify the customer’s location, the merchant has to collect at least two items on non-contradictory evidence. And if two of them are in Hungary, the customer may be determined as Hungarian:

  • customer’s permanent address
  • billing address (bank or electronic payment operator)
  • IP address
  • telephone number
  • the location of the customer’s fixed land line through which the service is supplied to him
  • other commercially relevant information

E-services list

As defined by EU law, a digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website, in particular:

  • e-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, «Audio, visual, or audio-visual products»
  • downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall into the audio category
  • cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS)
  • websites, site hosting services, and internet service providers
  • online ads and affiliate marketing

Registration procedure

Taxable persons registered in Hungary shall register via the Government portal using ”Client Gate” (“Ügyfélkapu” in Hungarian) by choosing option “Union scheme”. Those taxable persons not established in the EU should follow option “non-Union scheme”. Upon registration (“Képviseleti fiók nyitása”) an activation link is sent to the e-mail address provided by the applicant through which access to the MOSS portal shall be activated. Following successful activation, the portal can be accessed by the e-mail address and password allocated to the taxable person. The following information is to be provided to the Hungarian Tax Authority upon MOSS registration:

Taxable persons not established in the EU (non-Union scheme):

  • company’s name, trading name of the company if different from the company name, full postal address, email address and website of the taxable person, name and phone number of the contact person, BIC number
  • national tax number, if any
  • country in which the taxable person has his place of business
  • IBAN or OBAN number
  • electronic declaration that the taxable person is not registered for VAT within the Union
  • date of commencement of using the scheme

Taxable person established in Hungary (Union scheme):

  • company’s name, trading name of the company if different from the company name, full postal address, email address and website of the taxable person, name and phone number of the contact person, BIC number
  • tax identification number in Hungary
  • full postal address of fixed establishment(s) situated in other Member States of the European Community
  • VAT identification number issued to the taxable person by any Member State of the European Community where the taxable person is not established
  • VAT identification number issued by any Member State of the European Community where the taxable person’s fixed establishment is located, or tax reference number in the absence thereof
  • country where the taxable person is established, if established outside the territory of the European Community.
  • date of commencement of using the scheme
  • IBAN number

Keeping records

You must keep records of your activities for 10 years from the end of the year in which the service was supplied and digital copies should be made available if requested.

Filling VAT returns

You have to submit detailed online quarterly VAT returns within 20 days of the end of each return period. The information is then securely transferred from your member state of identification to the relevant member state of consumption.

VAT payment date

The tax is paid in HUF by bank transfer to a bank account published by the state tax and customs authority at the same time as filing the declaration, no later than the filing deadline, with reference to the tax declaration on which the payment is based.