EU VAT REGISTRATION
VAT in HUNGARY
VAT registration in Hungary
Hungary is subject to the EU VAT system and is part of the EU’s single market economy.VAT directives are issued by the EU, which set out the rules for the VAT system to be adopted by the Member States. These directives take precedence over local regulations.
Hungarian VAT law is administered by the Ministry of National Economy and the national tax and customs authority.
VAT registration in Hungary for companies:
Foreign companies can register in Hungary as a VAT payer without having to set up a local company; this is called non-resident VAT turnover. There is no VAT threshold in Hungary for the registration of non-resident business entities; VAT number must be entered before taxable supplies begin. The company may cancel the registration date in Hungary. If you know you need to register VAT in Hungary, do not hesitate and contact us and we will help you.
When is VAT registration in Hungary required?
⇒ Distance selling to private individuals in Hungary from another EU country, e.g. online sales. The distance selling threshold in Hungary is EUR 35,000 per year;
⇒ Organizing live events (conferences related to art and education).
Companies must check the necessity for VAT registration
If the annual value of distance sales to Hungary is less than € 35,000, then VAT is charged on domestic sales subject to tax at the rate applicable in your country.
If you exceed the distance selling threshold, you should charge Hungarian VAT on sales subject to Hungarian VAT at a 27% VAT rate, instead of applying the rate in your country and including it in Hungary.
The registration date is the date when the total distance sales turnover threshold is exceeded. It is also the date from which you need to start adding Hungarian VAT to sales.
Companies with a Hungarian VAT number must submit periodic declarations detailing all taxable supplies (sales) and inputs (costs). VAT returns submitted by non-resident economic operators are usually submitted monthly by the 20th day of the month following the end of the reporting month.
Hungarian taxpayers must submit quarterly tax returns. However, taxpayers whose VAT due in a given tax year or in the second year before a given year exceeds HUF 1 million must submit it monthly. Taxpayers whose VAT due for the second year preceding a given year does not exceed HUF 250,000 must submit VAT returns annually if they have not received an EU VAT identification number. However, the taxpayer may choose to submit quarterly declarations.
The delayed submission of a VAT return results in a maximum fine of HUF 500,000 and interest for late payment. If the refund is made on time, but VAT is paid late, interest is charged for the delay. The interest rate used is twice the current basic rate of the Hungarian National Bank multiplied by 1/365 for each day late.
If the refund has been made but the VAT liability has not been reported, the penalty is 50% tax arrears plus interest for late payment. Default interest is not imposed if the taxpayer is able to justify the delay. Depending on the circumstances of the particular case, the delay penalty may be reduced or canceled by the tax authorities.
Hungarian fiscal representative
Although it is not necessary to appoint a tax representative in Hungary for EU companies wishing to register VAT in Hungary, it is necessary to have a representative in Hungary who can act on behalf of the company. Thanks to this, the Hungarian tax authority can, if necessary, communicate, conduct tax audits and check invoices and accounting books. Non-EU companies must appoint a tax representative.
What documents do we need to register VAT?
In order to register a foreign company for Hungarian VAT, we need the necessary documents to do so. These are usually documents such as:
⇒ Company founder’s certificate (not older than 3 months, in Hungarian);
⇒ Articles of association;
⇒ A copy of the VAT certificate (in Hungarian) to prove that the company is registered for VAT purposes elsewhere in the EU, where applicable;
⇒ Declaration (in Hungarian) about the business activity of the enterprise;
⇒ Original of signature template of company representatives
⇒ Power of attorney (if using a tax representative, e.g. All companies outside the EU);
⇒ Filled in appropriate form
In Hungary, a natural person conducting a business submits a registration application for VAT on Form T101. The legal person registers for VAT purposes on the T201 form. Registration must be made in:
The Large Taxpayers Directorate of the Tax and Financial Controltion (APEH)
adres: 1077 Budapest, Dob u. 75-81. Fax: +3613221985
Do you have any questions about VAT registration in Hungary?
Do you have any questions about the Hungarian VAT registration for your company? Not sure if your company must be registered for VAT in Hungary? If so, contact us via our contact form.
|Local VAT no.||HU + 8 characters|
|Mail order threshold||35000 €|
|Submission of VAT returns||– Monthly|
|Annual declaration||Yes, until February 15|
|Waiting time for registrations||Up to 2 months|
|Standard VAT rate||27.00%|
|Reduced VAT rate||18.00%, 5.00%|
|European Union Member State||yes, since 2004|