GENERAL TAXATION OVERVIEW
What is the applicable VAT rate in Hungary?
General rate: 27%
The actual reduced rates: 18% and 5%
What is the frequency of tax return submission?
According to general rule the new tax payers registered after 1st January 2015 must file tax returns monthly in the first two tax years.
Tax payers who are obliged to submit their tax returns quarterly or yearly must switch to more frequent (monthly) submission during the course of a year if the accumulated VAT amount exceeds HUF 1 million (~EUR 3,200) (positive).
Tax payers shall submit annual tax return, if the tax balance of the 2nd previous year did not reach HUF 250,000 (negative or positive) and NET value of the supply of goods and the provided services did not reach HUF 50 million (~EUR 160,000), and he does not have EU VAT ID number.
However, tax payers shall switch to quarterly submission interim the year, if any of the above preconditions changes.
Is there a possibility to switch to more frequent submission?
Yes, there is. Based on liquidity or other reasons tax payers can file application to the tax authority to change the annual obligation to quarterly, or quarterly to monthly.
The application prescribes certain preconditions. The approval is not automatic, instead, it is subject to individual judgment of the tax authority.
What is the deadline for tax return submission?
In case of monthly submission the deadline is 20th of each following month.
(for example: tax return of January shall be submitted till 20th of February)
In case of quarterly submission the deadline is 20th of the month following the certain quarter.
(for example: tax return of 1st Quarter shall be submitted till 20th of April)
In case of annual submission the deadline is 25th February of the subsequent year.
What is the deadline to settle the VAT payable?
The positive balance of VAT payable and deductible (the really payable VAT) shall be credited on the bank account of the tax authority till the duedate of tax return.
What is the method of settlement?
The VAT shall be settled with bank transfer, directly to the account of the tax authority.
The transfer shall be settled in HUF. In case of transfer in other currency the bank of the tax authority charge exchange fee.
What is method of filing of tax return?
After preliminary registration tax returns shall be submitted electronically, via internet.
In case of certain conditions VAT return can be submitted on paper base as well.
Is EC sales listing (VIES report) obligatory?
Yes, it is. If the tax payer participated in inter-Community product sale or service supply (either as supplier or as customer), or participated in triangulation as intermediate party.
According to general rule the frequency of VIES report is equal with the frequency of VAT return. In certain cases the frequency of VIES report and VAT return can differ.
What other obligations may arise?
Intrastat data supply is obligatory if the value of EC acquisitions to or EC sales from Hungary exceeds HUF 100 000 000 in a 12-months period. The data supply shall be performed monthly directly to the Central Statistical Office. The deadline is 15th of each following month.
Further fee obligation may arise f the product is subject to environmental fee obligation in Hungary.
What does mean foreign VAT refund?
From 1 May 2004, with Hungary’s accession to the EU, our domestic laws adopted the provisions of the EU’s so-called Eighth VAT Directive on VAT refund. In accordance with the new regulations, a taxable person settled in an EU member state may ask refund of the VAT charged to and paid by him in another member state.
Upon the recodification of the Eighth Directive in 2008, its number changed to Directive 2008/9/EC and came into force on 1 January 2010.
The new Directive essentially changed the theoretical and practical regulations on tax refund. The changes affected, among others, the date from which the right for refund may be exercised, the place and deadline for filing, and the deadlines for completion and for consideration. An especially important change is that it is mandatory to make filings electronically and that the communication with the Tax Authority must be conducted electronically.
Since 2010, applications may only be filed in an electronic format and with the tax authority competent according to the place of establishment (registered office). Each national tax authority forwards the application to the authorities of the relevant member state which then directly maintain contact with the applicant in an electronic way.
The submission deadline is currently 30 September and a limitation period applies. We mention that the deadline to submit claims for 2009 has been extended to 1 March 2011. An invoice submitted by means of an application which has then been rejected cannot be resubmitted by means of a subsequent application.
In line with the provisions of the so-called Thirteenth Directive, the VAT Act provides a possibility – in accordance with special rules different from the above – for taxable persons established in the Principality of Liechtenstein and in the Swiss Confederation, too, to have VAT charged and paid in Hungary refunded.
The information on this website are indicative data. It shall not be considered as advise.
