Hungarian VAT rates and VAT compliance

Hungarian VAT rates

It is important that the correct Hungarian VAT rates are used in accounting records and on invoices as companies are held directly liable for any errors. The European Union does set the framework for the use of VAT rates, but countries are still free to set their own headline rates.

The current Hungarian VAT rates are:

Hungary VAT rates

Rate Type Which goods or services
27% Standard All other taxable goods and services
18% Reduced Certain foodstuffs; some take away food; admission to certain open-air concerts
5% Reduced Certain foodstuffs; pharmaceutical products (intended for human use); some medical equipment for disabled persons (excluding repair); books (excluding e-books); newspapers and periodicals; some social housing; district heating; some supplies of new buildings; restaurant and catering services (food prepared on site and non-alcoholic beverages); internet access services; certain writers and composers services; accommodation services from hotels, B&B and house sharing
0% Zero Intra-community and international transport

Hungarian VAT compliance

Once in possession of a Hungarian VAT number, there are compliance rules which must followed on accounting and VAT rates. These includes:

When providing local supplies under a Hungarian VAT number, companies are required to follow local accounting and tax rate rules. These include:

  • Detailing information about the supplier and customers, and transactions costs etc on all invoices
  • Issuing full invoices in accordance with the Hungarian VAT Act
  • Issuing invoicing for goods or services in accordance with the Hungarian time of supply rules.
  • Processes and control issues for the use of electronic invoices
  • Maintenance of book, which must be retained for at least eight years.
  • Treatment of credit notes, correcting VAT returns etc.
  • Translation rates for foreign currency invoices

What is the tax point for Hungarian VAT

The tax point (time of supply) rules in Hungary Republic determine when the VAT is due. It is then payable to the tax authorities 20 days after the VAT reporting period end (monthly or quarterly).

For most goods, it is the time of delivery or passage of title. For services, it is the completion of the service.

Need help with your Hungarian VAT compliance?

Researching Hungarian VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.