Hungary joined the European Union in 2004 and also became a member of the Eurozone in 1999.
VAT rates in Hungary
The standard rate of VAT is 27%, and reduced rates of 5% and 18% are available.
VAT registration in Hungary
The VAT registration limit in Hungary for established businesses is HUF 5 million, and zero for non-established businesses. Businesses with turnover below HUF 5 million are exempt from VAT registration.
Distance sales have a limit of €8,800,000 for VAT registration.
The format for a VAT identification number is: HU 12345678. Every company must hold a number like this in order for accurate taxation.
VAT returns are dependent on turnover and are submitted either monthly or quarterly. Annual returns are not required.
Are there any Intrastat thresholds in Hungary?
Yes. There is a limit of HUF 100,000,000 for both dispatches and arrivals.
VAT recovery in Hungary
- Is VAT recovery permitted for non-established non-EU businesses?
Yes, but only where there is a reciprocity agreement. Refunds are allowed to businesses established in the EU, Liechtenstein and Switzerland.
- Are there any non-VAT recoverable expenses?
Yes, recovery of input tax is restricted on certain items.
Reverse charge applies to the majority of cross border services. An extended charge applies to certain goods and all services.
Requirements and regulations in Hungary
Any company established in a non-EU member country must appoint a tax representative to register for VAT in Hungary.
Use and enjoyment rules do apply in Hungary.
The period of VAT recovery by tax authorities has a timescale of 5 years in order to prevent fraud.
Similarly, there is a period of 5 years for VAT deductions and refunds.
Please contact us for further information about paying taxes in Hungary, and a member of our team will be happy to help you.