FREQUENTLY ASKED QUESTIONS
What does VAT registration mean?
In case of such activities which trigger VAT obligation, but the enterprise itself shall not be established (branch or subsidiary) in Hungary, tax payers are allowed to acquire VAT number after preliminary registration with the authorities, in order to fulfill the administrative (VAT assessment and payment) obligations.
When is it obligatory to open a VAT registration?
VAT registration is obligatory, when a foreign tax payer is obliged to pay VAT, but according to the legal rules reverse charge is not applicable.
VAT registration obligation arises when above the VAT payment obligation the activity itself generates VAT or CIT fixed establishment in Hungary.
Who can open a VAT registration in Hungary?
Legal entity established in any country.
Is there any special condition for non ECC member states?
Yes, there is. Legal entity established in country out of ECC is entitled to open VAT registration in Hungary only with financial representation. Our advisors gladly provide the detailed rules in case of request.
When shall the registration be fulfilled?
The registration shall be fulfilled before the start of taxable activity.
Is there a possibility to register retrospectively?
Yes, there is. On the application form the tax payer can indicate an earlier date, if the company due to any reason started the taxable activity in Hungary before the registration.
What is an advantage of retrospective registration?
The input VAT charged before the registration (but after the starting date indicated on the application form) is deductible as well. In other case this VAT couldn’t be refunded, either through the so called “8th Directive” VAT reclaim.
What is a disadvantage of retrospective registration?
However due to practical legal rules the retrospective registration is applicable, it harms the theoretical rules, therefore may trigger default penalty.
If output VAT should have been charged before the registration (but after the starting date indicate on the application form) it shall be invoiced and settled accordingly, which trigger delay interest.
Tax returns shall be submitted regarding the pre-registration period, which tax returns are considered as delayed-returns, which may trigger penalty as well.
What kind of documents is needed for a registration?
Certificate of VAT payer status: The certificate issued by the tax authority of the seat about the statement that the company is VAT payer. Original is needed.
Extract from company registrar: Which shall nominate the representatives and signatories. Original is needed.
Deed of foundation: If the acquisition of original company registration is not possible, a notarized copy of the deed of foundation is also acceptable.
Specimen signature: An official document which contains the signatories’ official signature samples. If this kind of document is not available in the country of seat, it can be substituted whit providing a signature sample countersigned by lawyer. In case of request we can provide document sample.
Copy of passport: If acquisition of specimen signature is not possible the notarized copy of the passport or ID card of the signatories are also acceptable.
Power of Attorney: Proxy for our company regarding the representation in registration procedure.
How shall the application be submitted?
The application shall be submitted on paper base, in 2 original copies, directly to the tax authority.
In order to avoid any delay or document-loss during post delivery we submit the tax return personally.
How long does it take to acquire the VAT number?
The tax number is generated and announced in 2 weeks, counted from the submission of all necessary documents.
From which date is the VAT number valid?
The tax number is valid from the date of submission of the application.
What happens after the opening of the VAT registration?
The first tax return must be filed by the 20th day following the month in which the VAT registration was applied. The tax returns must be filed monthly in the first two tax years.
Our advisors are at your service in the preparation and submission of tax returns.
Is the registration terminable?
Yes, it is. If the registration is not necessary any more, it can be closed anytime. Based on separate application the tax authority cancel the tax number, provided that no pending tax obligation exist on the tax account balance.
What kind of documents is needed for the termination of the registration?
No special documents are needed.
Our advisors prepare the proxy, the final tax returns and the application for the termination. We acquire official confirmation about the termination, which we send to your company.
From which date is the VAT registration considered as closed?
From the date indicated on the application. It is important, that the application shall be submitted within 15 days counted from the indicated date (closing of transactions, decision of management, etc..).
How long is the limitation period in Hungary?
5 years. The 5 years shall be counted from the last date of that year, in which the tax return was (should have been) submitted.
The information on this website are indicative data. It shall not be considered as advise.
