VAT GUIDE IN HUNGARY
HUNGARIAN VAT GUIDE FOR BUSINESSES
VAT is a key component of Hungary’s tax system and is governed by Act CXXVII of 2007 on Value Added Tax. It applies to the supply of goods and services carried out within Hungary, intra-Community acquisitions, and imports.
All businesses carrying out taxable transactions in Hungary are generally required to register for VAT, including foreign entities operating in the country. Hungary follows EU VAT rules and is fully integrated into the EU VAT framework, including intra-Community reporting obligations like Intrastat and EC Sales Listings (ESL).
VAT compliance in Hungary also includes the use of electronic invoicing and online invoice reporting, introduced as part of efforts to combat tax evasion and improve transparency.
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VAT Rates
Who Needs to Register for VAT?
A taxable person in Hungary is any business or individual supplying goods or services for consideration in their own name. VAT registration is mandatory before starting business activities. Retroactive registration is possible but can lead to penalties, and it is not allowed for intra-EU transactions.
Small businesses with annual turnover under HUF 12 million may apply for VAT exemption, either as a new or existing business, but must still register. Exempt businesses cannot charge VAT or reclaim input VAT and usually don’t file VAT returns.
Since January 1, 2025, Hungary did adopt the EU’s uniform VAT scheme for small enterprises.
For B2C sales by nonresident suppliers, VAT is due in the consumer’s country, unless annual sales are below EUR 10,000. Such VAT can be reported using the One-Stop-Shop (OSS) mechanism, which is also available to non-EU businesses with an EU VAT number. Invoices under OSS follow the rules of the supplier’s country of establishment.
VAT Obligations
VAT Invoices
Hungarian taxable persons must issue VAT invoices for all domestic taxable supplies, including exports and intra-Community transactions.
Issuance deadlines:
- Invoices must be issued within 8 days after the supply date.
- For intra-Community supplies, invoices must be issued by the 15th day of the month following the supply.
- If payment is made at the time of supply, the invoice must be issued immediately.
VAT Records
Taxable persons must retain all documentation that supports VAT transactions, such as invoices, contracts, purchase orders, transport and customs documents.
Location of Records: VAT records can be stored outside Hungary, but the tax authority must be notified in advance. Documents must be made available within three working days upon request.
Retention Period: Records must be kept for 5 years from the end of the calendar year in which the VAT return was due.
Electronic Archiving is permitted in Hungary. Paper invoices can be digitized, and electronic documents must be stored digitally. Archiving must comply with Decree No. 1/2018, ensuring image quality, metadata, and document authenticity.
VAT Deadlines
Filing Frequency:
Monthly returns are required for:
- Newly registered taxpayers (first 2 years)
- Taxpayers with net VAT payable over HUF 1 million
VAT warehouse operators and indirect customs representatives (in special cases)
Quarterly returns apply to most other taxpayers.
Annual returns are allowed if:
- VAT payable/reclaimable two years prior ≤ HUF 250,000
- No EU VAT number issued
- Annual revenue from taxable supplies ≤ HUF 50 million
Filing Deadlines:
- Monthly/Quarterly: By the 20th day of the month following the tax period.
- Annual: By 15 February of the following year.
- Only one frequency applies (not cumulative).
VAT Payments:
- Due in full by the same deadline as the return.
- Must be paid in HUF via bank transfer.
- For international payments, the amount must be credited to the tax authority’s account by the deadline.
VAT Refund
Non-established & non-VAT-registered businesses can recover Hungarian VAT if reciprocity applies.
Refunds are available to the same extent as for Hungarian VAT-registered businesses.
For EU Businesses: claims are made under EU Directive 2008/9/EC, for no taxable supplies made in Hungary during the refund period (except reverse charge and some exempt transport services).
Refunds should be made within 4 months (maximum 8 months).
For Non-EU Businesses: refunds are governed by the EU 13th Directive.
Reciprocity is required – refunds allowed only to claimants from: Liechtenstein, Switzerland, Norway, Serbia, Türkiye (with conditions), and the UK.
Claim Requirements: submit by 30 September of the following year. It must cover at least 3 months (up to 1 year).
Forms can be in Hungarian, English, German, or French, but all communication must be in Hungarian.
Fiscal Representation is required.
Penalties for non-compliance
Late VAT Registration
If a taxable person fails to register for VAT, they may face a default penalty of up to HUF 1 million. If the tax authority issues a registration notice and the person still fails to register within the given timeframe, the penalty may be doubled.
Late Filing & Payment
A default penalty of up to HUF 500,000 may be imposed for late submission of VAT returns, Intrastat declarations, EC Sales Lists, or Domestic Summary Reports. Similar penalties apply for other infractions such as missing or inaccurate VAT returns or invoice non-compliance.
Late-payment interest is charged on overdue VAT, calculated as:
Central bank base rate + 5%, prorated daily (1/365 for each day overdue).
If VAT is not reported on time and a tax audit reveals a shortfall, a tax penalty of 50% of the unpaid tax applies, along with late-payment interest (unless justified). Authorities may reduce or waive penalties based on the specific circumstances.
Taxpayers are classified based on compliance:
Trusted (reliable) taxpayers benefit from reduced penalties
Risky taxpayers face higher penalties
Intrastat Penalties
Hungary’s Statistical Office can impose up to HUF 2 million for late, missing, or inaccurate Intrastat reports.
Errors & Administrative Noncompliance
Failure to update VAT registration details can result in administrative fines:
Up to HUF 200,000 for individuals
Up to HUF 500,000 for legal entities
Improper record-keeping, late or missing returns, or registration failures may also attract default penalties up to HUF 500,000 (or HUF 200,000 for individuals).
More serious violations may lead to penalties up to HUF 1 million, such as:
Failure to issue valid invoices or receipts
Conducting business without a valid VAT ID
Missing or incorrect live invoice data reporting can trigger fines up to HUF 500,000 per invoice.
EKAER Reporting Violations
Incorrect or missing EKAER data (regarding goods transport) may result in penalties up to 40% of the net value of the goods. Errors not related to value or quantity (e.g. typos) fall under general default penalties, capped at HUF 500,000.
Self-Revisions
When correcting VAT liabilities retroactively, a self-revision surcharge applies.
Calculated using the central bank base rate (daily)
Applies from the original due date to the self-revised return submission
If the revision is repeated, the surcharge is multiplied by 1.5
Tax Shortages & Fraud
General tax shortfall: Penalty is 50% of the unpaid amount
Fraud cases (e.g. hidden income, falsified documents): Penalty rises to 200% of the tax shortfall
Common VAT Terms
- VAT – ÁFA (Általános forgalmi adó)
- VAT number – ÁFA szám / Adószám
- Taxable person – Adóalany
- Tax authority – NAV (Nemzeti Adó- és Vámhivatal)
- VAT return – ÁFA bevallás
- Input tax – Előzetesen felszámított adó
- Output tax – Fizetendő adó
- Invoice – Számla
- Reverse charge – Fordított adózás
- Exempt supply – Adómentes ügylet
- Intra-Community supply – Közösségen belüli termékértékesítés
- Intra-Community acquisition – Közösségen belüli termékbeszerzés
- Distance selling – Távértékesítés
- One-Stop Shop (OSS) – Egyablakos rendszer
- VAT refund – ÁFA visszatérítés
- Tax inspection/audit – Adóellenőrzés
- Self-revision – Önellenőrzés
- Default penalty – Mulasztási bírság
- Late-payment interest – Késedelmi pótlék
- Tax penalty – Adóbírság
- EKAER – Elektronikus Közúti Áruforgalom Ellenőrző Rendszer
- Small business exemption – Alanyi adómentesség
- Domestic reverse charge – Belföldi fordított adózás
- Summary report – Összesítő nyilatkozat
- EC Sales List – Közösségi összesítő jelentés
