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).

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. Newly built houses and apartments have a reduced rate of 5% until 31 December 2022.

Requirement to Register for VAT

In Hungary, every business which carries out any taxable activity is obliged to register for VAT. There is no threshold.
In order to complete the registration, companies should submit the T201 form. Once the VAT ID is granted the form EGYKE Electronic Public Road Trade Control System (EKAER)must be submitted in order to set up the e-filing accounts.

In Hungary, VAT returns can be submitted via the authorized signatory’s or the representative’s e-filing account.

Non-resident businesses who have no establishment in Hungary must appoint a fiscal representative. More details can be found on the website of the Hungarian Tax Authority.

VAT Filing Frequency

In Hungary, the VAT return frequency depends on the net VAT obligation.

In case the net positive VAT obligation is less than HUF 250,000, the filing frequency is annually.
If the net positive VAT obligation is more than HUF 250,000 but less than HUF 1,000,000, the frequency is quarterly.
If the net positive VAT obligation is more than HUF 1,000,000, the filing frequency is monthly.

For monthly and quarterly returns, the submission and payment deadline is the 20th day of the month following the reporting period. In year 2022, the name of the applicable VAT return form is 2265 for both frequencies.

In case of annual returns the filing deadline is 25th February of the following year.

Launch of New Communication and IT System for eInvoicing

Invoicing Requirements for Hungary

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.

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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.

Recent VAT Updates in Hungary

May 2022: Preparations underway for the introduction of SAF-T

February 2022: VAT exemption to small business VAT registration approved

March 2020: Real Time Reporting

November 2019: Government Submits Tax Bill

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Hungary VAT Guide