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Summary

Standard VAT rate: 27%
E-Invoicing: permitted, but not mandatory
Reporting type: NAVs KOBAK system
Digital service tax: yes, only on advertisements

Compliance and rates

 

VAT number format

All EU member states have a fixed format for their VAT numbers. In Hungary, it includes 8 digits and the prefix HU (i.e. HU 01234567).

 

VAT rates

The standard VAT rate in Hungary is 27%, with reduced rates of 18% and 5% on certain goods and services. Some of goods and services are exempt from Hungarian VAT, such as exportations and international transport.

27 % (Standard rate) – Applies to all taxable supplies, with certain exceptions

18 % (Reduced rate) – for milk, some milk products, some cereal products, etc.

5 % (Reduced rate) – like some medicines, books and newspapers

0 % (Zero rate) – relating to the supply of goods and services funded under the ISPA preaccession programs carried out directly to the beneficiary, to the extent of financing received from the Cohesion Fund

 

VAT payments and returns

All businesses with Hungarian VAT number must submit periodic VAT reports and payments. Returns can be submitted in paper form or electronically. If the due date is on public holiday or weekend, the due date is moved to the next business day.

VAT Returns frequency
  • Monthly – a registered taxable person should register and pay the tax into the State budget within 20 days after the end of the taxation(reporting) period
  • Quarerly – a registered taxable person should register and pay the tax into the State budget within 20 days after the end of the taxation(reporting) period
  • Yearly – 25th Feb of the following year

If e-invoicing is used, companies must submit their VAT information electronically to the Hungarian tax authorities within 5 days (invoices with VAT amount of HUF 100,000 / EUR 320) or within 24h (invoices with VAT amount 500,000 / EUR 1,600).

Penalties in case of late filings or misdeclarations

Maximum amount for penalty charged for late VAT return filing in Hungary is HUF 500 000. Penalties for late payments vs. late filing are charged independently.

Non-filed VAT amount that should have been paid together with a maximum 50% of the VAT shortage.

Invoice requirements

Invoices issued in Hungary must contain at least the following information:

  • date of invoice issuance
  • a unique, sequential number of the invoice
  • supplier / issuer data (company name, address, VAT number)
  • customer data (address, VAT number and other data if available)
  • full description of goods and services provided (quantity and type)
  • net price per unit (excl. VAT)
  • rate and amount of VAT applicable for the category of goods and services provided
  • total amount of VAT
  • date of delivery / dispatch
  • indicate the type of the payment
  • the invoice total (incl. VAT)
  • statement messages in case of special supplying or tax regimes (i.e. the words “pénzforgalmi elszámolás” (“cash accounting”) when using the special taxation scheme defined under Chapter XIII/A)

 

E-Invoicing

According to Hungarian law, invoices and receipts may be issued electronically or paper-based.

The authenticity of the origin and the integrity of the content of an electronic invoice may be considered ensured if guaranteed by one of the following methods:

  • by means of a qualified electronic signature
  • sent and made available by means of electronic data interchange (referred to as “EDI”)

Electronic invoicing issuance in B2G, B2B and B2B is permitted at this moment, but still not mandatory.

Besides the sending identification data necessary for the application of the machine-machine interface, the invoicing software shall forward at least the obligatory data content, which is provided in the Act on VAT, of the issued invoice as well as of the document regarded as equivalent to invoice to the State Tax and Customs Authority by electronic means, immediately at the time of issue of the invoice and of the document regarded as equivalent to invoice, in XML format and in the data structure and method specified in the announcement of the State Tax and Customs Authority.

 

Digital Service Tax (DST) on advertisements

Digital tax in Hungary is introduced only related to advertisements. The rate is progressive(depends on the sales revenues) and vary between 0% and 5.3% (highest tax rate being imposed to entities which exceed HUF 100m in revenues).

Turnkey invoice compliance.

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