This guide provides an overview of VAT in Hungary, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Hungary.
Hungary has the highest VAT rate in the EU at 27%.
Foreign businesses that incur VAT on eligible expenses in the Hungary may be able to reclaim it.
Doing business in Hungary? You’ll need to play by the rules of the Hungarian VAT Act (Act CXXVII of 2007).
All businesses engaged in taxable activities must register, as voluntary registration is not permitted and registration is mandatory.
Hungary applies VAT on digital services based on the consumer’s location, typically utilizing the OSS system for EU cross-border services.
The following expense types would generally be reclaimable for VAT in Hungary if incurred for business purposes: hiring of means of transport; 50% of vehicle repairs; accommodation, admissions to trade fairs and exhibitions, and general business expenses (e.g., office expenses, professional fees etc).
For Hungary VAT refunds under the 8th Directive, original invoices are not required, and scans or photocopies can be submitted. For Hungary VAT refunds under the 13th Directive, original invoices must be submitted to the Hungary VAT Authority.
Generally, invoices that contain errors are not eligible for a refund of Hungary VAT. However, VAT IT can assist with this service to help obtain compliant invoices for submission in a refund of Hungary in VAT.
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