VAT Registration in Hungary
- Roger Pay
- Apr 18, 2025
- 6 min read
Updated: Apr 25, 2025
Hungary VAT Registration Explained
VAT Registration in Hungary
In Hungary, Value Added Tax (VAT) is referred to as "Általános forgalmi adó" (AFA). Here's a detailed guide to VAT registration in Hungary:
VAT Rates in Hungary:
Standard Rate: 27% - Applies to most goods and services.
Reduced Rate 1: 18% - Applies to certain foodstuffs, takeaway food, and admission to open-air music events.
Reduced Rate 2: 5% - Applies to specific goods and services, including some foodstuffs, pharmaceutical products, medical devices, books (excluding e-books), newspapers and periodicals, hotel accommodation, writers and composers, and restaurant and catering services (food prepared on-site and non-alcoholic beverages), internet access services.
Zero Rate: 0% - Applies to intra-community and international passenger transport.
VAT Registration Thresholds:
For resident businesses: There is no VAT registration threshold. However, resident businesses with an annual turnover below HUF 18 million (USD50,300) in 2025 can apply for VAT exemption (this threshold was HUF 12 million previously). This exemption is not automatic and must be requested.
For non-resident businesses: There is no VAT registration threshold. If a non-resident business makes any taxable supplies in Hungary, they are obligated to register for VAT.
Distance Selling Threshold: In line with EU regulations, the threshold for distance selling of goods to Hungarian consumers from other EU member states is €10,000 per calendar year. Once this threshold is exceeded, the seller must register for VAT in Hungary or opt for the One-Stop Shop (OSS) scheme.
When is VAT Registration Obligatory?
When a foreign taxpayer is obligated to pay VAT in Hungary, and the reverse charge mechanism does not apply.
When the business activity itself generates a VAT or Corporate Income Tax (CIT) fixed establishment in Hungary.
For non-resident businesses undertaking any taxable activities in Hungary.
For EU-based distance sellers whose sales to Hungary exceed €10,000 annually.
Businesses storing goods in Hungary or using fulfillment programs like FBA (Fulfilled by Amazon) that include Hungary.
How to Register for VAT in Hungary:
For New Hungarian Companies: VAT registration is typically part of the company incorporation process. The lawyer handling the incorporation will submit the necessary form including VAT information to the National Tax and Customs Administration of Hungary (NAV). The NAV usually issues the tax number within two working days.
For Existing Businesses (Domestic and Foreign): Businesses need to complete and submit the T201 form to the Hungarian Tax Authority (NAV). Foreign businesses should submit their registration forms to the Directorate of Exclusive Taxpayers (Kiemelt Adózók Igazgatósága) in Budapest.
Required Documents (may include):
Completed registration forms (T201).
A copy of the VAT certificate (translated into Hungarian if applicable) to prove VAT registration in another EU member state.
Articles of Association.
An extract from the company's national trade register (translated into Hungarian).
A statement about the economic activity of the business (in Hungarian).
Original specimen signature of the company's representatives.
Power of attorney (if using a fiscal representative, mandatory for most non-EU businesses).
Deed of foundation (if the original company registration document is unavailable, a notarized copy may be accepted).
Copy of passport or ID card of the signatories (if a specimen signature is not available).
Fiscal Representative: Generally, non-EU established businesses are required to appoint a fiscal representative in Hungary who will be jointly responsible for VAT liabilities. EU-based businesses have the option to appoint a VAT representative but it is not mandatory.
EU VAT Number: Any Hungarian company can apply for an EU VAT number, which facilitates tracking VAT on intra-community trade. This can be applied for during incorporation or later. The format is 'HU' followed by the 8-digit tax number.
VAT Return Filing and Deadlines:
The frequency of VAT return filing depends on the net VAT payable by the business:
Monthly: For newly registered businesses until the end of the calendar year following their establishment and for businesses with a net VAT obligation exceeding HUF 1 million (USD2,800) in the second preceding year, or for VAT groups. The deadline for submission and payment is the 20th day of the month following the reporting period.
Quarterly: For businesses with a net VAT obligation between HUF 250,000 (USD700) and HUF 1 million (USD2,800) in the preceding year. The deadline for submission and payment is the 20th day of the month following the reporting period.
Annually: For small businesses without an EU VAT number and a net VAT obligation below HUF 250,000 (USD700) per year. The deadline for submission is February 25th of the following year.
All VAT returns must be filed electronically.
VAT Number Format in Hungary:
For businesses: HU followed by 8 digits (e.g., HU12345678).
It's important to note that Hungary has implemented a real-time invoice reporting system, where most sales invoices must be reported electronically to the tax authority.
This information should provide a comprehensive overview of VAT registration in Hungary.
How Bestar can Help
Bestar can provide a wide range of valuable services to both individuals and businesses, helping them navigate the complexities of tax laws and regulations. Here's a breakdown of how we can assist:
For Businesses:
Tax Planning and Strategy:
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Prepare and file various tax returns accurately and on time, including corporate income tax, VAT/GST, payroll taxes, and other relevant taxes.
Ensure compliance with evolving tax laws and regulations at the federal, state, and local levels.
Manage communication and correspondence with tax authorities (e.g., IRAS in Singapore, IRS in the US).
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Tax Advice and Consultation:
Provide expert advice on complex tax issues and the implications of business decisions.
Keep businesses informed about changes in tax legislation and their potential impact.
Offer guidance on employee benefits, retirement plans, and owner compensation from a tax perspective.
Audit Assistance and Representation:
Represent the business during tax audits by tax authorities.
Assist in preparing documentation and responses to audit inquiries.
Help resolve tax disputes and negotiate with tax agencies.
Financial Analysis and Forecasting:
Analyze financial statements to identify potential tax exposures and opportunities for savings.
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For Individuals:
Tax Preparation and Filing:
Prepare and file individual income tax returns accurately and efficiently.
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Tax Planning:
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Assist with estate and inheritance tax planning to minimize tax burdens on wealth transfer.
Tax Advice and Consultation:
Explain complex tax laws and regulations in an understandable manner.
Answer tax-related questions and provide clarification on specific situations.
Offer advice on how to manage income and expenses to optimize tax outcomes throughout the year.
Audit Assistance and Representation:
Represent individuals in the event of a tax audit by tax authorities.
Help gather necessary documentation and prepare responses to audit inquiries.
Review of Prior Year Returns:
Review previously filed tax returns to identify potential errors or missed opportunities for refunds.
General Benefits of Hiring a Tax Professional:
Expertise and Knowledge: Bestar possesses in-depth knowledge of ever-changing tax laws and regulations, ensuring compliance and maximizing tax benefits.
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Potential Cost Savings: While there is a fee for our services, Bestar can often identify deductions and credits that clients might otherwise miss, potentially saving more money than their fee.
Representation: We can act as a representative before tax authorities in case of audits or disputes, providing valuable support and advocacy.
Year-Round Support: Bestar offers ongoing support and advice throughout the year, not just during tax season, for proactive tax planning.
In summary, Bestar acts as a knowledgeable partner, helping individuals and businesses navigate the intricate world of taxation, ensuring compliance, minimizing liabilities, and maximizing financial well-being. Our expertise can save time, reduce stress, and potentially lead to significant financial benefits.