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
Standard Rate 27%
Reduced Rate 18%
5%
Zero Rate 0%

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Country Profile: Hungary

Hungarian E-commerce facts:

Population 9.68 million
(January 2020)
Currency: Hungarian Forint (HUF)
Number of e-commerce users:

7 million
(January 2020)

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
Intrastat Thresholds:

Dispatches:
HUF 100,000,000

Arrivals:
HUF 170,000,000

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

Read more about International VAT and Compliance:

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