Country Guide: Hungary
Looking to expand your e-commerce business to Hungary, then look no further, here is AVASK's guide to VAT in Hungary:
VAT in Hungary
Hungary is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.
As an EU member state, Hungary is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. Hungary is not currently a member of the Eurozone and uses its own currency, the Hungarian Forint (HUF). At present, there is no timeframe for the country to join the Eurozone. In Hungary VAT is known as: Általános forgalmi adó, or AFA.
VAT registration in Hungary
Both EU and non-EU businesses may trade in Hungary without establishing a local presence. This is known as non-resident VAT trading. There is no VAT threshold in Hungary for the registration of non-resident traders, but you will need one to record transactions and your Hungarian customers will want proof that you have obtained one.
There are strict rules on the situations where VAT registration is permitted. Common scenarios that require Hungarian VAT registration include:
- Importing goods into Hungary;
- Organising live events, conferences, etc. in Hungary;
- Holding goods in a warehouse in Hungary as stock for resale;
- Buying goods within Hungary that are subsequently re-sold in-country;
- Selling goods from Hungary to other EU member states;
- Distance-selling to private individuals in Hungary, e.g. internet retailing or trading through an e-commerce platform.
Registering for Hungary VAT generally takes up-to 30 days once all documentation has been submitted to the tax authority, but this varies from seller to seller and will depend on the specifics of an individual company.
Hungrian VAT compliance
There are detailed rules controlling the recording and processing of Hungarian transactions for VAT purposes. This includes guidelines on:
- Hungarian invoice requirements;
- When to issue a Hungarian tax invoice;
- Foreign currency reporting;
- Credit notes and corrections;
- Correcting entries from prior returns;
- Which accounting records must be maintained.
Hungarian VAT rates
|VAT Rate||% Rate|
Country Profile: Hungary
Hungarian E-commerce facts:
|Population||9.68 million |
|Currency:||Hungarian Forint (HUF)|
|Number of e-commerce users:|
|Revenue in e-commerce market:||£1.96 billion|
|Estimated market growth:||7.3% to £2.6 billion by 2024|
Hungarian thresholds and additional summary:
|Distance Selling Threshold (DST)||HUF 8,800,000|
|VAT number format:||HU 12345678|
|VAT return period:|
(dependent on turnover)
|Monthly or quarterly|
|VAT return deadline||20th day of the month following period end|
|Annual VAT filing deadline:||Not required|
|EC sales lists reporting||Monthly, quarterly or annually|