VAT Number Format In Hungary

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

VAT Rates In Hungary

The standard VAT rate in Hungary is 27%, with reduced rates of 18% and 5% on certain goods and services. Some 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 pre-accession programs carried out directly to the beneficiary, to the extent of financing received from the Cohesion Fund

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VAT Payments And Returns In Hungary

All businesses with a 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 a public holiday or weekend, the due date is moved to the next business day.

VAT Returns Frequency In Hungary

For all companies that operate in Hungary, VAT returns must be submitted as follows:

• 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
• Quarterly – 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

In the case of the late filing of VAT returns and payments, the Hungarian government prescribed the penalties as follows:

• The 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 of 50% of the VAT shortage.

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

• date of invoice issuance
• a unique, sequential number of the invoice
• supplier 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
• The total amount of VAT
• date of delivery/dispatch
• indicate the type of 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)

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 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 an invoice to the State Tax and Customs Authority by electronic means, immediately at the time of issue of the invoice and the document considered to be equivalent to invoice, in XML format and the data structure and method specified in the announcement of the State Tax and Customs Authority.

As of January 1st, 2021, all B2B and B2C transactions must be reported to Hungarian tax authorities in real-time, regardless of the transaction amount.

Before, real-time reporting was mandatory only if the invoice amount was higher than HUF 100,000 (ca EUR 290).

To fulfill this requirement, businesses affected by this obligation must register on the electronic platform Online Számla, provided by the National Tax and Customs Administration of Hungary (NTCA), or connect their invoicing software to tax authorities. In other words, the invoicing software must report sales transactions in an XML format to Hungarian tax authorities in real-time in the layout specified by the Hungarian tax authority.

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