Hungary: Comprehensive VAT Country Guide (2026)

• 1988: VAT Introduced: Hungary implements VAT, locally called Általános forgalmi adó (ÁFA), replacing the former sales tax system.
• 2004: EU Membership: Hungary joins the EU on 1 May 2004, aligning its VAT laws with the EU VAT Directive and common system.
• 2012: VAT Rate Increase: The standard VAT rate is raised from 25% to 27%, making it the highest in the European Union.
• 2018: Real-Time Invoice Reporting: Hungary launches mandatory online real-time reporting of B2B invoice data to the tax authority, enhancing VAT compliance.
• 2021: EU E-commerce Reforms: Hungary adopts the EU’s 1 July 2021 e-commerce VAT package: distance selling thresholds are replaced by the OSS system and import VAT exemption for low-value goods is removed (IOSS introduced).
• 2025: SME VAT Threshold Rises: The annual VAT exemption threshold for small enterprises increases from HUF 12 M to HUF 18 M (approx. €43,500), with plans to reach HUF 24 M by 2028.

2. Local VAT Term

3.1 Standard Rate

3.2 Reduced Rates (5% and 18%)

• 18% rate: Applied to a short list of items, notably some basic foodstuffs (e.g. certain milk and dairy products, cereals and bakery products) and admission to certain live music and dance events (open-air concerts). This rate aims to make essential or culturally important goods more affordable. [taxsummaries.pwc.com], [numeral.com]
• 5% rate: Reserved for a broader range of essential goods and services. Notable categories at 5% include:
  • Basic foods: Many staple food products such as milk, most dairy products, poultry, pork, fish, eggs, flour, bread, and other essential groceries. [numeral.com], [marosavat.com]
  • Pharmaceuticals and medical supplies: Most prescription medicines and certain medical devices for the disabled are taxed at 5%. [marosavat.com], [marosavat.com]
  • Books and newspapers: Printed books, newspapers, periodicals, and even e-books and audiobooks qualify for 5%, supporting education and culture. (Note: As of 2024, daily newspapers published at least four times per week are zero-rated – see Section 3.3.) [marosavat.com], [numeral.com]
  • Internet and communications: Internet access services are subject to 5% VAT, a policy aimed at promoting digital connectivity. [marosavat.com]
  • Tourism & hospitality: Hotel accommodation and domestic restaurant/catering services (excluding alcohol) enjoy the 5% rate, to boost tourism and local dining. [marosavat.com], [marosavat.com]
  • New housing: The sale of new residential property can be taxed at 5% when certain conditions are met (with time limits – see Section 3.4). [taxsummaries.pwc.com]
  • District heating and certain utility services.

3.3 Zero-Rated and Exempt Supplies

• Exports of goods to non-EU countries (direct exports). [numeral.com]
• Intra-Community supplies of goods to VAT-registered traders in other EU Member States (i.e. cross-border B2B sales within the EU are 0% when the customer provides a valid VAT number). [numeral.com]
• International transport of goods or passengers that qualifies under EU law (e.g. transport services directly linked to exports). [avalara.com]
• As a recent change, daily and weekly newspapers published at least four times a week are 0% VAT from 1 January 2024 (they were previously taxed at 5%). This measure was introduced to support print media. [taxsummaries.pwc.com]

• Financial and insurance services (e.g. provision of loans, financial intermediation, insurance premiums). [taxsummaries.pwc.com]
• Medical and healthcare services (e.g. hospital services, medical care provided by licensed healthcare professionals) provided as part of the public health system. [taxsummaries.pwc.com]
• Educational services (such as public education and certain training services). [taxsummaries.pwc.com]
• Social and welfare services, and certain non-profit or cultural services provided by qualifying organizations (libraries, museums, etc.). [taxsummaries.pwc.com]
• Real estate: The sale of real property (buildings or land) is generally exempt unless it is new construction or a building site (land for construction) which are taxable. Rentals of residential property and most leasing of real estate are exempt by default, though landlords may opt to tax commercial property rent/sales by waiving exemption in order to reclaim input VAT. [taxsummaries.pwc.com]

3.4 Recent or Upcoming Rate Changes

• New 0% VAT on newspapers (2024): Effective 1 January 2024, Hungary introduced a 0% VAT rate for daily newspapers published at least four times per week. (Previously, newspapers were taxed at 5% VAT.) This change was aimed at supporting the press and reducing costs for consumers of daily news. [taxsummaries.pwc.com]
• Extended 5% VAT for certain foods (2026): From 1 January 2026, Hungary will **expand the 5% reduced rate to include meat, offal, and slaughter by-products of cattle that are fit for human consumption (fresh, chilled, or frozen). These items, considered basic foodstuffs, will shift from 27% to 5% VAT. [taxsummaries.pwc.com]
• Temporary 5% on new housing (2016–2024): Hungary has periodically used a temporary 5% rate for new residential real estate sales to boost housing construction. Most recently, the sale of new homes was 5% VAT (instead of 27%) through 31 Dec 2024, with a transitional extension until 31 Dec 2028 for projects that had a final building permit by end of 2024. Unless extended, new homes sold after those dates revert to 27% VAT. [taxsummaries.pwc.com], [taxsummaries.pwc.com]
• No change to standard rate: Despite minor category tweaks, Hungary’s headline 27% rate has remained unchanged in recent years and continues to be the highest in the EU. There are currently no announced plans to change the standard rate. [taxfoundation.org]

4. VAT Number Format

• Country code: “HU” (for Hungary), followed by
• 8 digits (the taxpayer’s tax identification number). [globalvatc…liance.com], [globalvatc…liance.com]

5. Registration Requirements

5.1 Registration Thresholds (Residents vs. Non-Residents)

5.2 Voluntary Registration

5.3 EU OSS/IOSS Schemes

• OSS (One-Stop Shop): Rather than registering in every EU country where you sell goods/services to consumers, you can opt to register for OSS in just one EU country (for example, a Hungarian business can use Hungary’s OSS portal) and declare all your EU cross-border B2C sales in a single quarterly OSS return. The OSS covers intra-EU distance sales of goods (online sales shipped to consumers in other EU countries) and any B2C services supplied across EU borders. If you are a non-Hungarian EU business selling to Hungarian consumers, you can either (a) use the OSS in your home country to report Hungarian VAT, or (b) if your cross-border B2C sales Europe-wide stay under €10,000 per year, you may apply home country VAT under a micro-business simplification. Above that threshold, OSS or local registration is required. Hungary’s distance sales threshold was €35,000 prior to 2021, but this was abolished in favor of the low EU-wide €10,000 threshold for all intra-EU B2C sales combined. [taxsummaries.pwc.com], [taxsummaries.pwc.com] [taxsummaries.pwc.com]
• IOSS (Import One-Stop Shop): Non-EU sellers importing low-value goods (consignments up to €150) to EU customers can use IOSS to charge and collect EU VAT at the point of sale and report it through a single monthly IOSS return. IOSS avoids the need for buyers to pay import VAT on delivery and simplifies customs clearance. Hungary permits IOSS for eligible imports; non-EU businesses using IOSS typically need to appoint an EU intermediary (except those in countries with mutual agreements). If a non-EU company chooses not to use IOSS, the buyer in Hungary will have to pay the import VAT to the delivery service or customs. [taxsummaries.pwc.com], [taxsummaries.pwc.com] [taxsummaries.pwc.com]

6. VAT Grouping Rules

• Eligibility: Available to any industry sector. Companies must have a fixed establishment in Hungary and be ”closely related” (usually meaning under common control or significant financial/organizational links). The law does not impose strict industry limitations, so groups can consist of companies from different industries as long as they meet the relatedness criteria. [vatupdate.com]
• Formation: Forming a VAT group is optional. All members must jointly apply to the tax authority (NAV) to form the group and receive a single group VAT number. A representative member is usually designated to handle compliance. Importantly, a company that is eligible but chooses not to join a VAT group may have to accept certain liabilities to allow its related companies to form a group without it. [vatcalc.com] [vatupdate.com]
• Intra-group transactions: Supplies between members of a VAT group are outside the scope of VAT (effectively disregarded for VAT) – no VAT is charged on inter-company invoices within the group. This can improve cash flow and simplify accounting for groups of companies that trade with each other. [vatupdate.com]
• External transactions: The VAT group as a whole is treated as a single taxpayer for transactions with outside parties. Sales to third parties are taxed as if made by the group’s single VAT entity. A single consolidated VAT return is filed covering all the group’s activities. [vatupdate.com]
• Joint liability: All members of the VAT group share joint and several liability for any VAT debts or penalties of the group during its existence. This means each member can be held responsible for the group’s VAT obligations if the designated representative or another member fails to fulfill them. [vatupdate.com]
• Joining/leaving: There is no minimum period that a VAT group must remain in existence, but conditions for grouping must be continuously met. If a member leaves the group or the group disbands, any inter-group supplies become subject to VAT going forward. Special rules manage such transitions to prevent tax avoidance on withdrawal of a member. [vatupdate.com]

7. VAT Recovery for Foreign Businesses

• EU-established businesses (not VAT-registered in Hungary): If an EU business incurs VAT in Hungary (e.g. on local business travel, trade show expenses, etc.) but does not make taxable supplies in Hungary, it can reclaim the Hungarian VAT through the EU 8th Directive refund system. This involves submitting an electronic refund claim via the tax authority in its home country, which is then forwarded to the Hungarian tax authority (NAV) for approval. The process is annual (claims for a calendar year must be submitted by September 30 of the following year) and requires that the claimant has no other presence/registration in Hungary. Approved refunds are typically paid out by NAV within a few months after approval. [taxsummaries.pwc.com]
• Non-EU businesses (not VAT-registered in Hungary): Companies established outside the EU can also reclaim Hungarian VAT under the 13th Directive (reciprocity) refund scheme, provided their home country offers reciprocal VAT refunds to Hungarian businesses. Hungary requires reciprocity, meaning refunds to non-EU companies are granted only if their country offers similar VAT refunds to Hungarian companies. Countries currently recognized for reciprocity include Switzerland, Liechtenstein, Norway, Serbia, Turkey, and the United Kingdom. Claims by non-EU businesses are submitted directly to NAV (often via paper forms or online portal when available), usually on an annual basis. A Hungarian fiscal representative is not required for these refund claims, though documentation (invoices, proof of payment) must be provided. The deadline for non-EU claims is generally June 30 of the year following the year of the expenses. If a non-EU country is not on Hungary’s reciprocity list, businesses from that country cannot claim a VAT refund in Hungary (unless they register for Hungarian VAT in-country). [taxsummaries.pwc.com], [taxsummaries.pwc.com] [vatcalc.com]
• Foreign businesses with a Hungarian VAT registration: If a foreign company has registered for VAT in Hungary (due to local operations or by choice), it will recover Hungarian VAT via its local VAT returns rather than through the above refund directives. In this case, it is treated like any domestic taxpayer for VAT credit/refund purposes (see Section 22.5 on VAT credits/refunds).

8. Fiscal Representative Requirements

• Non-EU companies: Any company established outside the EU must appoint a Hungarian fiscal representative as a condition of VAT registration in Hungary. This requirement applies, for example, to companies from the USA, Canada, Asia, or other non-EU jurisdictions that engage in taxable transactions in Hungary. The fiscal representative – typically a tax consulting firm or financial institution established in Hungary – is jointly liable for the foreign company’s VAT debts and compliance in Hungary. Because of this liability, starting 1 January 2025, stricter rules apply to who can act as a fiscal rep: only Hungarian companies meeting certain criteria (e.g. minimum HUF 150 million capital and no tax debts) can serve in this role. [wtsklient.hu], [vatcalc.com] [numeral.com] [wtsklient.hu]
• EU companies: Businesses established in another EU Member State are not legally required to have a fiscal rep in Hungary. EU-based companies may VAT-register directly with NAV under the EU’s mutual assistance framework. However, appointing a local tax representative is optional and can be useful due to language barriers and Hungary’s complex reporting requirements. Many EU businesses voluntarily use local agents to manage their filings. [numeral.com]
• IOSS intermediary: For non-EU businesses registering under the Import One-Stop Shop (IOSS) for distance sales of low-value imports, an EU intermediary (which can be a type of fiscal rep) is required by EU law. Hungary conforms to this rule: a non-EU business without an EU establishment must engage an IOSS intermediary in an EU state (not necessarily Hungary) to use IOSS. [taxsummaries.pwc.com]

9. Currency and FX Rules

• Use the official exchange rate published by the National Bank of Hungary (MNB) (Magyar Nemzeti Bank) for the date the tax became chargeable (typically the invoice date).
• Alternatively, businesses may use the European Central Bank’s euro reference rate for conversion to HUF. [vatcalc.com]

10. VAT Law and Legal Framework

• Secondary legislation and guidance: Detailed rules appear in government decrees and NAV guidelines (informative booklets) which clarify how to comply with the VAT Act in practice (e.g. specific invoicing rules, real-time reporting technical details, etc.).
• Court system: Taxpayers can appeal against NAV decisions through administrative appeal and ultimately in court. Hungarian courts must interpret the VAT Act consistently with EU law; the Court of Justice of the EU (CJEU) jurisprudence is frequently referenced in Hungarian VAT cases.
• Language: The official language for VAT compliance is Hungarian. While some guidance may be available in English (e.g. summaries on NAV’s English website), the VAT return and official correspondence are generally in Hungarian by law, which may necessitate local professional assistance for foreign taxpayers.

11. Tax Authorities

• Organization: NAV is a central authority under the Ministry of Finance (formerly under the Ministry for National Economy). It handles both tax and customs (import duties) matters, reflecting the integration of tax collection and customs control functions. [vatcalc.com]
• VAT Administration: NAV oversees VAT registration (processing of VAT number applications), collection of VAT returns and payments, audits, and enforcement of VAT compliance. There are regional tax offices under NAV, but for foreign businesses, typically a specialized central office (the Large Taxpayers Office or a designated department for non-residents) handles their VAT matters. [vatcalc.com]
• Online services: NAV provides an online portal for electronic filing of returns and statements, known as ’ÁNYK’ or newer Online Nyomtatványkitöltő Alkalmazás, and the Online Invoice reporting system (see Section 23.4). Taxpayers have online access to their tax accounts through the Client Gate (Ügyfélkapu) system.
• Audits and enforcement: NAV conducts VAT audits and has been at the forefront of electronic oversight. Real-time reporting of invoices and the online cash register system (see Section 20) give the tax authority powerful tools to detect underreporting of VAT in near real-time. The statute of limitations for audits is five years (Section 21), and NAV can impose penalties and interest for non-compliance (Section 24). [grantthornton.hu], [grantthornton.hu]
• Rulings and guidance: Taxpayers can request binding tax rulings (ahead of transactions) for certainty, and NAV regularly publishes guidelines (informative booklets) on various VAT topics (e.g. invoicing, OSS/IOSS, refunds) which are available on its website, including English summaries for some topics.

12. Scope of VAT

• The supply of goods or services for consideration (payment) by a taxable person within the territory of Hungary. This covers nearly all business transactions where something is provided in exchange for payment. Both goods and services are equally taxable under the law, whether supplied by sale, exchange (barter), or even by legal decree or court order. (Barter transactions are treated as two reciprocal supplies for VAT purposes.) [globalvatc…liance.com]
• Intra-Community acquisitions of goods in Hungary from other EU countries. If a Hungarian business purchases goods that are shipped from another EU member state, Hungarian VAT is due (usually accounted for by the buyer under reverse charge, see section 15.3). A threshold of €10,000 per year applies to unregistered small businesses or exempt persons receiving EU goods – above this, they must report the purchases and pay VAT in Hungary or register for VAT. [globalvatc…liance.com]
• Imports of goods into Hungary from outside the EU. Import VAT (usually at the same rate as domestic VAT on similar goods) is due at the point of customs clearance. If the importer is a VAT-registered business, they can often deduct or defer the import VAT – see section 15.6 for import deferment schemes. [globalvatc…liance.com]
• Certain cross-border services received by Hungarian businesses. If a foreign company without a Hungarian establishment provides services “where the place of supply is Hungary” under EU rules (for example, most B2B services provided to a Hungarian business from abroad), the reverse-charge mechanism applies: the Hungarian business must self-account for Hungarian VAT on the service received (more in section 15.3). [numeral.com]

13. Time of Supply Rules

13.1 Goods

13.2 Services

13.3 Continuous Services

13.4 Imports

13.5 Goods on Approval/Return

14. VAT Invoicing Requirements

14.1 Invoice Issuance Deadlines

14.2 Required Contents of an Invoice

• Date of issue of the invoice.
• Unique sequential invoice number identifying the invoice.
• Supplier’s name, address, and VAT identification number (HU VAT number for domestic businesses).
• Customer’s name and address. If the customer is a taxable person (business) in Hungary or another EU country, their VAT identification number (for intra-EU B2B supplies or domestic reverse charge transactions) must be shown. [vatcalc.com], [vatcalc.com]
• Date of the supply of goods or services (if different from the invoice date), or date of any payment on account before the supply.
• Description of the goods delivered or services provided, and the quantity or extent of the goods/services.
• Net unit price (price per item or unit, excluding VAT) and any discounts if not included in the unit price.
• Taxable amount per rate or exemption, and the applicable VAT rate (%) for each category of item.
• Total VAT amount payable in HUF (even if the invoice is in another currency, the VAT must be converted to HUF – see Section 9). [vatcalc.com]
• If an exemption or reverse charge applies, the invoice should contain a reference indicating this (e.g. “VAT exempt – Article X of VAT Act” or “Reverse charge – customer liable for VAT”). [avalara.com]

14.3 E-invoicing and Digital Signature Rules

• Customer consent: The buyer must accept receiving an invoice electronically (this can be explicit or implicit, e.g. by paying an e-invoice).
• Authenticity & integrity: The electronic invoice must guarantee the authenticity of origin and integrity of content. Common methods to ensure this include using a qualified electronic signature or EDI system, though Hungarian law doesn’t mandate a specific technology as long as internal controls ensure the invoice’s credibility. [avalara.com]
• Digital signature: While not mandatory, using a digital signature or a timestamp issued by a certified authority is one way to ensure authenticity. Hungary recognizes EU-compliant digital signatures on invoices.
• Archiving: E-invoices must be stored in a way that preserves their original format and ensures accessibility for the required retention period (see 14.6). If stored electronically, they should remain readable and unchanged for the entire period and be presented to NAV upon request.

14.4 Simplified Invoices

• The transaction value is low – for example, if the gross invoice total does not exceed EUR 100 (approximately HUF 37,000). (Note: the law specifies a forint amount limit, which may be updated; currently around HUF 100,000.) [vatcalc.com]
• When issuing receipts from a cash register or POS terminal to non-taxable persons (consumers) for retail sales. In such cases, the cash register receipt can serve as a simplified tax document, as long as it contains the essential info (tax rate, amount, date, etc.). Retail businesses in Hungary use online fiscal cash registers connected to NAV (see Section 20), which automatically generate compliant receipts. [vatcalc.com]

14.5 Self-Billing

• The invoice should state that it’s self-billed and include the parties’ details as usual.
• The supplier and customer must have a prior agreement and a procedure to ensure each invoice is approved by the supplier, to maintain authenticity.
• The supplier remains responsible for VAT even though the customer issues the invoice. In practice, the self-billing agreement often includes that the customer will ensure the VAT is correctly charged. However, if VAT is underpaid or wrongly invoiced, both parties can be held liable, with the supplier typically bearing ultimate responsibility unless national rules enforce joint liability. [vatcalc.com]

14.6 Retention Period for Invoices

14.7 Invoice Correction Methods

• Credit Note (Negative Invoice): If the original invoice’s amount or VAT was too high (e.g., goods were returned or a discount was granted after invoicing), the supplier issues a credit note (often called a “helyesbítő számla” or “storno számla” in Hungarian) to reduce the taxable amount or VAT. The credit note must refer to the original invoice number and indicate the reason for the adjustment (e.g. “Discount for early payment”, “Return of goods”). It carries its own sequence number and date. [vatcalc.com]
• Debit Note: If an undercharge occurred (additional amount to bill), a debit note can be issued, also referencing the original invoice.

15. Compliance and Deductions

15.1 Right to Deduct Input VAT (and Key Exceptions)

• Entertainment and hospitality expenses (e.g. business meals, receptions, entertainment of clients) – disallowed for input VAT deduction except in very limited cases. [vatcalc.com]
• Passenger cars and related costs (fuel, repairs, leasing of standard passenger vehicles) – generally non-deductible, unless the car is used exclusively for business (e.g. taxi operators, driving school cars, car resale businesses can deduct). Fuel for passenger cars has special rules: it’s typically non-deductible for personal use cars, but partial deduction is allowed in some circumstances (like 50% deduction when the car is partly business-used). [vatcalc.com]
• Residential real estate and related expenditures – VAT on purchasing or constructing residential property is usually not deductible unless the property is sold/leased with VAT (for example, developers selling new homes at 5% VAT can deduct input VAT). VAT on dwelling rentals (which are exempt) is not deductible. [vatcalc.com]
• Certain services for private use – if a service has a mixed purpose (business/personal), only the business portion of VAT is claimable. For example, telephone bills for a line used 60% for business and 40% private would allow only 60% of the VAT to be deducted. [taxsummaries.pwc.com]

15.2 Call-Off Stock Arrangements

• The foreign supplier not established in Hungary transports its products to a warehouse in Hungary for a known customer that is a Hungarian VAT-registered person.
• The goods remain the supplier’s property until the Hungarian customer takes them out of storage (at which point a supply from the foreign supplier to the Hungarian customer is considered to occur).
• The supplier and customer both keep special records of the movements, and the goods must be taken by the customer within 12 months of arrival in Hungary. [vatcalc.com]
• The supplier reports the transaction in the EU recapitulative statement (EU sales list) with the customer’s VAT number, and the customer accounts for it as an intra-Community acquisition when they take title.

15.3 Domestic and Cross-Border Reverse Charge Mechanisms

• Cross-border B2B services and acquisitions: Under the general EU VAT “place of supply” rules, most services provided B2B by a non-resident to a Hungarian taxable person are subject to reverse charge (no VAT charged by the foreign supplier; the Hungarian business self-assesses Hungarian VAT). Similarly, purchases of goods from other EU countries are treated as intra-Community acquisitions where the Hungarian buyer must calculate the VAT in Hungary. These are standard EU rules to simplify cross-border trade and avoid forcing foreign suppliers to register locally in every instance. The Hungarian customer reports output VAT and claims input VAT in the same VAT return (if entitled to full deduction, the reverse charge is cash-flow neutral). [numeral.com]
• Domestic reverse charge: Hungary applies reverse charge to certain high-risk or special domestic transactions between two Hungarian VAT-registered businesses, as allowed by EU law (with permission). In such cases, the supplier does not charge VAT, and the Hungarian purchaser must self-account for the VAT on their VAT return. The Hungarian VAT Act specifies activities under reverse charge, which currently include: [taxsummaries.pwc.com]
  • Construction and real estate-related work: construction, building, repair or maintenance services related to real property (when the work is required to be approved by authorities). This targets the construction sector to combat VAT fraud. [taxsummaries.pwc.com], [taxsummaries.pwc.com]
  • Sale of specific goods prone to fraud: e.g. certain steel and metal products, agricultural products like cereals and oilseeds (wheat, maize, etc.), industrial and precious metals waste/scrap, and greenhouse gas emission quotas. In these sectors, the buyer pays the VAT via reverse charge to prevent missing-trader fraud schemes. [taxsummaries.pwc.com]
  • Real estate: The sale of immovable property or land if the supplier opted to tax the sale (otherwise such sales are exempt – see 3.3) is under reverse charge. [taxsummaries.pwc.com]
  • Employment/labor hire services: e.g. staff leasing or hiring out of personnel (in specific sectors like construction) are under reverse charge if provided domestically. [taxsummaries.pwc.com]
  Under these domestic reverse charge rules, the invoice must not charge VAT; instead it should mention “reverse charge applies” and include the customer’s VAT ID. The customer then accounts for output VAT in their return (and can simultaneously deduct it if eligible). These measures are aimed at preventing tax fraud in sectors where sellers might otherwise charge VAT to buyers and disappear without remitting it to the state.

15.4 Treatment of Cash Discounts

• At the time of sale, issue the invoice with VAT calculated on the full price (no discount assumed). Both supplier and customer will account for VAT on that full amount for that period. [vatcalc.com]
• If the customer pays within the period to earn the discount (e.g. 2% off for payment within 10 days) and therefore pays a reduced amount, the supplier must then issue a credit note for the discount amount, reducing the original VAT accordingly. The customer will use that credit note to adjust (reduce) its input VAT claim by the corresponding amount of VAT. [vatcalc.com]

15.5 Bad Debt Relief Conditions

• The supplier must demonstrate that the debt is definitively irrecoverable, typically by showing that the customer has become insolvent, gone into liquidation/bankruptcy, or that all legal recovery actions have failed. Simply having a long-overdue invoice isn’t enough; formal insolvency or uncollectibility must be proven. [taxsummaries.pwc.com]
• Relief is claimed via a self-revision (amended VAT return) adjusting the tax base and VAT of the period of the original supply. Essentially, the supplier reduces its taxable sales and output VAT by the amount of the bad debt. This can result in a VAT refund or a reduction of VAT payable. [taxsummaries.pwc.com]
• Timing: The bad debt relief can be claimed up to 5 years after the original due date of the invoice (since this corresponds to the standard statute of limitations for VAT). From 2021, the law extended relief to certain cases of B2C (non-taxable person) bad debts as well. If the cause of insolvency occurs late (e.g. in the 5th year), the claim can be made within one year of that event, even if it falls beyond the normal limitation period. [vatcalc.com] [taxsummaries.pwc.com]
• Some conditions have been relaxed over time – e.g., as of mid-2021, previously strict requirements about the status of the debtor (like requiring a debt management procedure for individuals) were eased. [taxsummaries.pwc.com]

15.6 Import VAT Deferment Schemes

• To qualify, the importer must obtain a special permit/license from NAV. Eligibility criteria include being a “reliable taxpayer” (a status granted to taxpayers with good compliance history), having a significant portion of zero-rated sales (e.g. at least 67% of sales being exports/intra-EU supplies with full deduction right), holding an Authorized Economic Operator (AEO) certification, and meeting a minimum annual turnover requirement (e.g. HUF 10 billion). These conditions ensure only low-risk, solvent businesses can defer import VAT. [vatcalc.com]
• With the deferment license, no cash payment is needed at import. Instead, the importer accounts for both output and input VAT on the imported goods in the next VAT return (effectively offsetting each other if the importer has full VAT recovery). This improves cash flow as the business doesn’t have to pre-finance the VAT.
• Additionally, Hungarian law provides an outright import VAT exemption for certain scenarios, such as when goods are imported into Hungary and then re-exported or dispatched to another EU country within 30 days of import. This is often applied in triangular trade or supply chain arrangements to avoid burdening traders with import VAT that would immediately be refunded upon export. Strict conditions apply, including the requirement for a Hungarian VAT registration and sometimes a financial guarantee. [vatcalc.com]

15.7 VAT Warehousing

• EU goods: Specific goods moved into a VAT warehouse in Hungary from another EU country can do so without being treated as an immediate taxable supply. VAT is suspended until the goods leave the warehouse. This is useful for goods that are to be re-exported or sold onward across the EU.
• Non-EU (customs) goods: Hungary also operates customs bonded warehouses where import VAT and duties are suspended until goods are released for free circulation. If goods are directly re-exported from a customs warehouse, import VAT may not be due at all. [vatcalc.com]
• Only goods listed under Hungarian law for VAT warehousing qualify (often items like metals, electronics, agricultural commodities, etc.). Transfers of goods into, within, and out of the warehouse must be documented and reported.
• A Hungarian VAT number is not strictly required just to hold goods in a VAT warehouse if you are not making domestic supplies. However, if the goods are sold to a Hungarian buyer out of the warehouse, VAT would then be due and the seller might need to register. [vatcalc.com]

15.8 Supply-and-Install Rules

15.9 Use-and-Enjoyment Provisions

• Long-term passenger vehicle rentals to non-EU customers: Typically, for B2C hiring of means of transport, the default VAT rule taxes the service where the customer is established (for long-term rentals). However, Hungary uses a use-and-enjoyment override so that if a non-EU customer (e.g., from a third country) rents a means of transport in Hungary for use in Hungary, the service is treated as supplied in Hungary and subject to Hungarian VAT. This prevents, say, a situation where a non-EU consumer could rent a car in Hungary but claim non-taxation on grounds of their foreign residence. [vatcalc.com]

15.10 Capital Goods Adjustment Period

• For movable tangible capital assets (e.g. machinery, equipment, vehicles treated as capital assets), the adjustment period is 5 years. If a business initially deducts VAT on such an asset but within 5 years its use shifts to exempt purposes (or vice versa), a proportional adjustment to the deducted VAT must be made. Typically, each year of the adjustment period is one-fifth of the total VAT. [vatcalc.com]
• For immovable property (real estate) treated as capital goods (e.g. a building or land subject to VAT), the adjustment period is 20 years. This long period reflects the long economic life of real estate. Changes in use (from taxable to exempt use or vice versa) during this period trigger partial VAT adjustment. [vatcalc.com]

16. VAT Recovery for Non-Residents

16.1 EU 8th Directive Refunds

• Scope: Covers VAT paid on business expenses in Hungary (e.g. travel, trade fairs, local purchases) that relate to the claimant’s taxable business activities. The claimant must not have a fixed establishment or VAT registration in Hungary during the period.
• Timing: Claims are typically filed for a calendar year (or shorter quarterly periods) and must be submitted by September 30 of the following year. For example, VAT incurred in 2025 must be claimed by 30 September 2026.
• Minimum amounts: For a full-year claim, the minimum refundable amount is €50; for shorter periods (e.g. a single quarter), a minimum of €400 applies. [vatcalc.com]
• Approval and payment: NAV will review the claim (which must include scanned invoices for larger amounts) and communicate any questions via the home country’s tax authority. If approved, refunds are generally paid within 4 months of receiving the claim, or longer if additional information is requested (in which case interest may be due on delays).
• Eligible countries: Besides EU member states, certain non-EU European countries (e.g. Norway, Switzerland, Liechtenstein) are treated similarly to EU businesses under separate agreements. In practice, companies from these countries also use the electronic portal system to claim Hungarian VAT refunds. [taxsummaries.pwc.com]

16.2 Non-EU 13th Directive Refunds

• Reciprocity requirement: Hungary only grants refunds to non-EU businesses if their country offers equivalent VAT refunds to Hungarian businesses. Countries currently accepted include Switzerland, Liechtenstein, Norway, Serbia, Turkey, and (post-Brexit) the United Kingdom. U.S. companies, for example, are not eligible for 13th Directive refunds as there’s no U.S.-Hungary reciprocity. [taxsummaries.pwc.com] [taxsummaries.pwc.com], [taxsummaries.pwc.com]
• Scope and timing: Typically covers VAT on travel, promotional, or other business expenses incurred in Hungary. Claims are generally submitted on an annual basis (by June 30 of the following year), and the minimum claim amount for a year is around €50 (NAV may set specific limits in HUF).
• Process: The claimant must provide original invoices and sometimes a certificate of VAT status from its home country. NAV may take longer (up to 6–8 months or more) to process 13th Directive claims. If approved, refunds are paid directly to the claimant’s bank account (an account in Hungary or abroad, as specified). Communication with NAV for these claims may require correspondence in Hungarian, and sometimes appointing a local consultant is useful even if not legally required.

16.3 Reciprocity Requirements

16.4 Need for Fiscal Representative

17. VAT on Digital Services

• Place of supply for B2C digital services: If a business (EU or non-EU) provides electronic services to a non-taxable person in Hungary (for example, streaming media, downloadable software, e-books, online platforms services sold to Hungarian consumers), the sale is taxable in Hungary at the applicable Hungarian VAT rate. Prior to 2015, such services were taxed where the supplier was established, but now they are taxed where the customer resides to ensure proper taxation of digital economy. [numeral.com]
• One-Stop Shop: Businesses selling digital services to multiple EU countries’ consumers can use the One-Stop Shop (OSS), specifically the non-Union OSS (for non-EU companies) or Union OSS (for EU-based companies), to report VAT for all EU digital sales via one return. Hungary’s OSS portal can be used by eligible businesses to simplify compliance (this replaced the older MOSS – Mini One-Stop Shop system in 2021).
• Registration requirement: If not using OSS, a foreign provider of digital services must register in each EU country where it supplies consumers. Thus, a non-EU company selling apps or streaming services in Hungary would either register for Hungarian VAT or use the OSS scheme via an intermediary.
• VAT rate on digital services: The standard rate 27% VAT applies to most digital services supplied to consumers in Hungary (e.g., streaming subscriptions, downloadable software). However, some digital products benefit from reduced rates if equivalent physical items do – for instance, e-books and e-newspapers are eligible for the 5% reduced rate, as the EU now allows alignment of e-publications with their physical counterparts. [numeral.com]

18. Distance Selling Rules

18.1 Thresholds for Distance Sales

• If an EU seller’s total B2C sales to all EU countries (excluding their home country) is under €10,000 in the current year and previous year, they can still charge their home country’s VAT. Once this small €10,000 threshold is passed, all subsequent B2C sales to EU countries (including Hungary) become taxable where the customer is located, i.e., Hungarian VAT must be charged on sales to Hungarian customers. [taxsummaries.pwc.com]
• In practice, the €10,000 threshold is very low. Many international sellers exceeded it and thus needed to either register for VAT in each relevant country or use the OSS. Effectively, as of 2021, there is no practical country-specific threshold for larger e-commerce businesses – every sale to Hungary might require Hungarian VAT from the first euro, unless OSS is used. Hungary’s earlier €35,000 threshold is no longer applicable.

18.2 OSS/IOSS Participation for Distance Sales

19. Cash Accounting Scheme

• Eligibility threshold: Only available to small taxable persons with annual taxable revenues not exceeding HUF 125 million (approximately €335,000) in the previous year. This threshold has been revised over time (it was lower in past years; currently HUF 125m as of latest rules). If a business exceeds this threshold, it must leave the scheme. [vatcalc.com]
• Domestic transactions only: The cash accounting scheme in Hungary can be used only for domestic transactions. It cannot be applied to intra-Community acquisitions or imports, and it’s generally only available to businesses established in Hungary (not to foreign companies). [vatcalc.com]
• Optional nature: Businesses must opt into the scheme (typically by marking the choice on their VAT registration or by notifying NAV). Once opted in, all of the business’s Hungarian transactions follow the cash accounting principle. If a cash-accounting business issues an invoice, it should be clearly marked (often “Cash Accounting Scheme” on the invoice) because it alerts the buyer that they cannot deduct the VAT until they pay the invoice.

20. VAT-Registered Cash Tills (Point-of-Sale Requirements)

• Who must use online cash registers: Sectors such as retail stores, restaurants, bars, hotels, taxi drivers, hairdressers, repair services, and other B2C businesses are obligated to issue receipts through certified online cash register devices. NAV maintains an official list of activities that must comply, updated as needed. These businesses typically cannot issue manual receipts except in emergency downtimes. [grantthornton.hu]
• Function: The cash register (often called AEE system) has a tamper-proof “black box” (Adóügyi Ellenőrző Egység) that records every transaction and sends data to NAV’s central server via a built-in SIM card. This ensures real-time monitoring of retail sales, helping catch unreported cash sales and VAT evasion. Data transmitted include receipt details (time, amount, VAT breakdown), daily totals, and device status reports. [grantthornton.hu], [grantthornton.hu] [grantthornton.hu]
• Receipts: Customers must be given a fiscal receipt from the online cash register. These receipts count as simplified invoices for VAT if they contain the required info (tax rates, amounts, etc.). Businesses must also offer electronic receipts (e-receipts) to customers who request them, as Hungary is moving toward digital receipt systems by 2025.

21. Statute of Limitations

• The 5-year period is counted from the end of the year of the tax period. (If you filed a VAT return for Q1 2020, the clock starts at end of 2020, and NAV has until end of 2025 to audit it.)
• If a return is amended (self-revised), the limitation period for that specific change may restart when the correction is filed.
• If an audit is opened before the limitation period expires, the final tax assessment can be delivered even after the five years, as long as the audit commenced timely.
• Taxpayers are advised to keep all VAT records (invoices, contracts, proof of transport for cross-border sales, etc.) for at least five years (preferably a bit longer to be safe). This retention period aligns with the requirement to keep invoices for five years (Section 14.6) and ensures documents are available in case of an audit.

22. VAT Return Filing

22.1 Filing Frequency

• Monthly filing: Required for taxpayers whose annual VAT payable (output tax minus input tax for the year) exceeded HUF 1 million in the previous year. In practice, most medium-large businesses fall into monthly filing. Additionally, all newly registered taxpayers must file monthly for at least the first two years of registration (to allow closer monitoring). Members of a VAT group also file monthly, since the group is likely to meet the large taxpayer criteria. [vatabout.com], [vatabout.com] [vatcalc.com]
• Quarterly filing: If the previous year’s total VAT payable was between HUF 250,000 and HUF 1 million, the business can file quarterly. Many small-to-medium enterprises (SMEs) fall in this category once out of their startup phase. [vatabout.com], [vatabout.com]
• Annual filing: Very small taxpayers with annual VAT payable below HUF 250,000 qualify for annual filing, submitting one VAT return per year by the due date in the following year. Typically, only enterprises under the small business VAT exemption (Section 5.1) or those with minimal taxable activity use annual filing. Note that even if no VAT is due (e.g., all sales are zero-rated or offset by input credits), a nil return must be filed on time. [vatabout.com]

22.2 Method of Filing

22.3 Deadlines for Filing and Payment

• Monthly and Quarterly returns: due by the 20th day of the month following the end of the tax period (month or quarter). For example, a July monthly return is due by August 20. Payment of any VAT owed for that period is also due by that date. [rsm.hu]
• Annual returns: due by February 25 of the year following the tax year (historically February 25, recently confirmed by NAV for 2025). For instance, the VAT return for the year 2025 (if on annual filing) would be due by 25 February 2026. Any tax due for the year must be paid by the same deadline. [rsm.hu]
• If a deadline falls on a weekend or public holiday, the due date moves to the next working day. Hungary strictly enforces timely filing; late submissions can trigger penalties (see 24.1). [rsm.hu]

22.4 Pre-Filled Return Availability

• As of 2023/2024, pre-filled VAT returns have been tested for certain taxpayer segments, but this system is not yet universally available. It is expected to expand in the near future.
• Even with pre-filled data, taxpayers remain responsible for accuracy. They must review the draft, correct any omissions or errors (e.g., add cash transactions, cross-border transactions that the system might not automatically capture), and then submit the confirmed return by the normal deadline.
• The move towards pre-filled returns is part of a broader trend (even before EU’s “VAT in the Digital Age” proposals) to leverage digital reporting (like the online invoice data) to facilitate compliance.

22.5 Handling of VAT Credits/Refunds

• Minimum refund amounts: To request a cash refund from a single VAT return, the negative amount must be at least HUF 1 million for monthly filers, HUF 250,000 for quarterly filers, or HUF 50,000 for annual filers. If the credit is smaller, it should generally be carried forward to the next period’s return. This rule helps reduce administrative burden of very small refunds. [taxsummaries.pwc.com]
• Refund processing time: The general timeline is 75 days from the filing deadline to receive the refund for a valid claim. However, a 30-day expedited refund is available if all purchase invoices contributing to the refund have been fully paid by the time of filing and the taxpayer is classified as a “reliable taxpayer” by NAV. There is also a 45-day refund for certain medium cases (e.g. larger amounts above HUF 1 million) when conditions are partially met. “Reliable” taxpayers are companies with a good compliance record, as determined by NAV’s risk rating system. Non-reliable taxpayers or those not meeting the payment conditions will receive refunds on the normal 75-day schedule. [taxsummaries.pwc.com]
• Process: If a refund is requested, NAV may perform checks or an audit before payout. Often, if the refund is large, an audit is likely. The refund is typically paid by bank transfer. If the taxpayer has any outstanding tax debts, NAV may offset the VAT refund against those debts first, before remitting any balance.
• Interest on late refunds: If NAV does not pay out an approved refund in the statutory time (and the delay is not due to the taxpayer’s fault or an audit suspension), the taxpayer may be entitled to interest on the delayed amount.

22.6 Correction of Errors

• Self-revision process: The taxpayer files an amended return for the period in question, including only the differences from the original (either additional VAT or reduced VAT). A brief explanation may be required.
• Deadline: A return can be self-corrected within the 5-year statute of limitations. Prompt correction can mitigate penalties. If the correction is in the taxpayer’s favor (reducing tax liability or increasing a refund), it must usually be done within this period to claim the benefit.
• Interest on under-declarations: If a correction results in additional VAT payable (underpaid tax), the taxpayer must calculate and pay self-revision interest on the difference. The interest rate is set at the National Bank of Hungary’s base rate plus a premium (the current rate is the central bank base rate (13% as of 2023) divided by 12, applied for each month of delay, roughly equating to 1.08% per month). Interest is calculated from the original due date of the tax until the date of filing the correction and payment. However, if the error is self-revised before any audit is initiated and within the deadline, no penalty (fine) is imposed – only the interest. [vatcalc.com]
• Corrections in favor of taxpayer: If the correction decreases the tax due or increases a refund, no interest is paid to the taxpayer (interest is one-sided, only for underpayment). The taxpayer simply adjusts the amount. If a refund increases, it will be subject to the normal verification and timing rules.
• Error corrections via invoices: Some errors (such as price adjustments, returns, etc.) are handled through invoice corrections (credit/debit notes) as described in 14.7, rather than by adjusting past returns. The distinction can be complex – typically, errors in tax accounting are handled with self-revisions, whereas changes in consideration after the fact are handled with credit/debit notes.

22.7 Non-Resident Filing Specifics

• Non-EU businesses will have a fiscal representative (Section 8) who usually handles the preparation and submission of the VAT returns and payments on their behalf. The returns will be in Hungarian forint and must be filed electronically like any other return.
• A foreign business that is VAT-registered in Hungary must also submit any additional filings that apply (e.g. EC Sales Lists for any intra-EU supplies it makes from Hungary, Intrastat if it moves goods cross-border above thresholds, etc., as described in Section 23).
• If a foreign taxpayer has no transactions in a period, a nil VAT return should still be filed by the deadline, unless the taxpayer has been officially deregistered.
• If a non-resident taxpayer stops its activities in Hungary, it can apply for VAT deregistration. Any excess VAT credits will be refunded by NAV upon deregistration, after any audit if deemed necessary.

23. Other Filings

23.1 EU Sales List (Recapitulative Statement)

• The EU Sales List is typically due monthly (by the 20th of the month following the reporting period) if the taxpayer files monthly VAT returns; quarterly submission is allowed if the taxpayer is on quarterly VAT filing and certain thresholds aren’t exceeded. (The default in Hungary is a monthly listing in line with the VAT return period). [vatcalc.com]
• No threshold for reporting: all intra-EU taxable B2B sales must be included. (Prior to 2020, there was a threshold for listing domestic B2B invoices – see 23.4 – but for EU sales the requirement has been comprehensive.) [taxsummaries.pwc.com]
• The list is filed electronically (as part of the ’A60’ form, often alongside the VAT return). It enables cross-checking by tax authorities: the information should match the purchases (intra-Community acquisitions) that trading partners in other countries declare.

23.2 Intrastat Declarations

23.3 Annual Returns

23.4 SAF-T or Other Digital Reporting Requirements

• Real-Time Invoice Reporting (Online Számla): Since July 2018, Hungarian VAT payers must report B2B invoice data to NAV in real time (or near real time) through an online system. Initially, this applied to B2B invoices with VAT > HUF 100,000, but since July 2020 the threshold was abolished – now all invoices issued by VAT-registered businesses to domestic taxpayers must be reported electronically to NAV. As of 2021, this extends to virtually all invoices (including those to non-taxable persons in many cases). Businesses typically use their invoicing software to transmit data via NAV’s API immediately upon issuing an invoice. This system allows NAV to cross-check taxpayers’ sales and purchase reports and has greatly improved VAT compliance and collection. Non-compliance (failure to report invoices on time) can lead to fines up to 500,000 HUF per invoice. Most businesses have integrated this in their billing; alternatively, NAV provides a free web portal to manually report invoices if needed. [taxsummaries.pwc.com] [taxsummaries.pwc.com], [taxsummaries.pwc.com]
• Domestic recapitulative statements (M-sheet reporting): In addition to real-time reporting, Hungarian taxpayers have had to file a domestic purchase and sales listing (often called M-sheets) along with their VAT returns. Prior to 2020, this M-sheet required listing domestic sales or purchases where the VAT was at least HUF 100,000 (about €270). As of 2020, because all invoices are now reported real-time, the separate M-sheet threshold was removed. Now the VAT return includes aggregate data and is supported by the detailed e-invoice reports that NAV already has. [taxsummaries.pwc.com]
• E-receipt and E-cash register data: As noted in Section 20, data from online cash registers is automatically sent to NAV. Starting in 2024, Hungary is introducing an electronic receipt system so that even the B2C cash transactions are centrally recorded in real time. This complements the invoice reporting system to cover essentially all sales.
• SAF-T: As of early 2026, Hungary has not mandated the OECD’s SAF-T standard for electronic accounting data submissions. Instead, it relies on its own domestic systems (real-time data reporting, etc.). There have been discussions about implementing SAF-T or similar digital audit file requirements (an “eAccounting” or e-ledger system), but no firm implementation date. Businesses should monitor NAV announcements for any future SAF-T requirements, especially as the EU’s “VAT in the Digital Age” initiative may prompt more standardized digital reporting across Member States.

24. Penalties and Interest

24.1 Late Filing Penalties

24.2 Late Payment Interest Rates

24.3 Other Fines

• Understatement of tax (tax evasion penalty): If a tax audit finds that you underreported VAT (underpaid tax), NAV can impose a penalty up to 50% of the tax difference (plus late payment interest). In cases of proven tax fraud (intentional evasion), penalties can be as high as 200% of the tax evaded under general tax rules, and criminal charges can apply for serious fraud. However, if a taxpayer voluntarily discloses an error and self-corrects (see 22.6) before any audit, the penalty is usually waived or reduced by 50% (hence only the self-revision interest is paid). [vatcalc.com]
• Failure to issue or report invoices: Not issuing an invoice/receipt when required or not reporting invoices in the online system can lead to significant fines. For example, not providing a VAT invoice to a customer can attract a penalty up to HUF 1,000,000 (approx €2,600) per instance. Likewise, failing to comply with the real-time invoice reporting obligations can lead to fines up to HUF 500,000 per invoice not reported. These are serious penalties reflecting the importance of invoice compliance in Hungary’s system. [vatcalc.com]
• Other administrative infractions: There are fines for errors in compliance, such as incorrect data in returns, failing to keep proper records, obstruction of a tax audit, or not complying with invoicing requirements. The amounts vary, but as a rule, NAV can impose fines on companies and on responsible officers.

25. Other Notable VAT Features

• Advanced digital compliance: Hungary is recognized for its cutting-edge approach to VAT administration through technology. It was one of the first EU countries to implement real-time invoice data reporting (Section 23.4) for all businesses, and to mandate online cash registers (Section 20) for many sectors as early as 2013. These measures have significantly reduced the VAT gap by combating fraud and improving collection efficiency. Hungary intends to continue on this path with future e-invoicing and e-reporting initiatives. [grantthornton.hu], [grantthornton.hu]
• EKAER – Freight tracking system: Hungary operates a unique system called EKAER (Electronic Public Road Trade Control System) for monitoring the road transport of goods, especially to prevent VAT fraud in supply chains. Since 2015, certain transports of goods by road (particularly inbound shipments from the EU or high-risk goods movements within Hungary) must be registered in the EKAER online system, obtaining an EKAER number before transport begins. Failure to register a shipment or providing incorrect data can lead to severe penalties (up to 40% of the goods’ value) and the potential seizure of the goods by authorities. EKAER is intended to stop fraudulent diversion of goods that would avoid VAT; compliant businesses must integrate this logistics reporting into their processes. [taxsummaries.pwc.com], [taxsummaries.pwc.com] [taxsummaries.pwc.com]
• “Reliable taxpayer” status: As mentioned, Hungary rewards compliant taxpayers with “reliable” status, which confers benefits like accelerated VAT refunds (30 days instead of 75), reduced penalties, and less frequent audits. Conversely, “risky” taxpayers face increased scrutiny. The designations are updated quarterly by NAV based on criteria such as filing/payment timeliness, audit findings, and financial solvency. This is part of a risk-based approach to tax administration. [taxsummaries.pwc.com]
• Local sales tax for retail sector: In addition to VAT, Hungary imposes a special “advertised turnover” retail tax on large retailers, and has introduced a retail sales tax on digital marketplaces effective 2024 (intended to level the playing field between online platforms and brick-and-mortar stores). While not a VAT, businesses should be aware of these other indirect taxes when operating in Hungary. [vatcalc.com]
• VAT in the Digital Age (ViDA): Hungary is actively preparing for upcoming EU-wide VAT changes, including those under the ViDA initiative. Public consultations were launched on topics like mandatory B2B e-invoicing and digital reporting, indicating that Hungary will likely be among the early adopters of these new systems when the EU approves them. [vatupdate.com]