With the highest value-added tax (VAT) in Europe, Hungary’s VAT revenue rose 6.4% from 2023 to 2024. With multiple VAT rates, strict registration rules for foreign sellers, and real-time invoice reporting, Hungary VAT compliance leaves little room for guesswork.

Below, we’ll explain Hungary’s VAT rate, different VAT categories, registration requirements, invoicing rules, and refund processes.

What’s in this article?

• What is Hungary’s VAT rate?
  
• Which goods and services qualify for reduced VAT rates in Hungary?
  
• What is a Hungarian VAT number and when is it required?
  
• Who needs to register for VAT in Hungary?
  
• How does VAT registration work for foreign businesses selling into Hungary?
  
• How does Hungarian VAT compliance work?
  
• What are the invoicing requirements for Hungarian VAT?
  
• How do VAT refunds work in Hungary?
  
• How Stripe Tax can help
  

What is Hungary’s VAT rate?

Hungary applies a 27% standard VAT rate, the highest in Europe. This is the default rate for many goods and services sold in Hungary.

Which goods and services qualify for reduced VAT rates in Hungary?

Hungary applies reduced VAT rates to a narrow set of goods and services that are mainly tied to essential needs, culture, and public policy goals. The categories are strictly enforced.

Here are the reduced rates and when they apply:

18% reduced VAT rate

This rate applies to a limited group of basic food products, including certain dairy items and baked goods made primarily from milk, cereals, flour, or starch. It also applies to admission tickets for some live music and dance events.

5% reduced VAT rate

This reduced rate applies to certain prescription medicines and approved medical products, printed books, newspapers, e-books, and audiobooks, as well as many staple food items such as fresh milk, poultry, eggs, and fish intended for human consumption.

Hotel stays and other commercial lodging services are subject to this reduced rate, a measure to support tourism. Restaurant services also qualify for the rate, provided alcohol is excluded from the charge. Internet access services are also taxed at 5% to lower the cost of connectivity for households and businesses.

0% rate

Exports to non-EU countries and intra-community supplies (ICS) of goods to EU-registered companies in other EU countries are rated at zero. Daily newspapers published at least four times per week are also rated at zero. This means that VAT is charged at 0%, but that the transaction is still reportable, and businesses can reclaim relevant input VAT.

Exempt

Some services are completely exempt from VAT, which means businesses cannot charge VAT or reclaim input VAT. These include medical and educational services provided as public services.

What is a Hungarian VAT number and when is it required?

A Hungarian VAT number is the identifier that ties a business to its VAT obligations in Hungary. It’s required anywhere VAT needs to be charged, reported, or validated. With EU and cross-border use, it appears on invoices as “HU” followed by eight digits. Domestically, the VAT number is derived from Hungary’s broader tax identification number, which also indicates whether a business is VAT-registered or VAT-exempt.

Businesses need a VAT number before starting taxable activities. It’s required for issuing VAT-taxable invoices, filing VAT returns, or claiming input VAT in Hungary. Missing or incorrect numbers can invalidate VAT treatment and carry penalties. Hungarian VAT numbers are also necessary for applying zero-rated VAT on intra-EU business-to-business (B2B) sales. Both parties’ VAT numbers must be valid and reported correctly. Businesses are expected to verify customer VAT numbers for cross-border transactions.

Who needs to register for VAT in Hungary?

VAT registration in Hungary depends on where your business is established, how you sell, and if you’re engaging in certain qualifying activities.

Here’s how it works:

Hungarian-established businesses

Businesses with a seat or fixed establishment in Hungary must register for VAT once their annual taxable turnover exceeds 20 million Hungarian forint (HUF). This threshold is scheduled to increase to 22 million HUF in 2027 and 24 million HUF in 2028. Below that threshold, businesses can use the small business VAT exemption. But some businesses choose to register for VAT below the threshold if reclaiming VAT on costs outweighs the benefit of charging VAT-free prices. Once registered, full VAT compliance obligations apply.

Foreign businesses selling into Hungary

Non-Hungarian businesses must register for Hungarian VAT from the first taxable transaction; there’s no turnover threshold. This applies to selling goods locally, holding inventory in Hungary, or making taxable supplies where Hungarian VAT is due.

EU business-to-consumer (B2C) sellers

EU B2C businesses must register when they meet the EU-wide threshold of €10,000, but they can manage VAT registrations across the region using the EU’s One Stop Shop (OSS).

Any businesses importing goods into Hungary, organizing paid events, or supplying goods from Hungarian warehouses typically require VAT registration, regardless of transaction size.

How does VAT registration work for foreign businesses selling into Hungary?

Foreign businesses register directly with the National Tax and Customs Administration of Hungary (NAV). The application requires corporate documents, proof of business activity, and often a VAT certificate from the home country. These documents usually need to be submitted in Hungarian or accompanied by certified Hungarian translations, a step that often extends timelines.

Businesses established outside the EU must appoint a Hungarian fiscal representative. This representative shares liability for VAT obligations and acts as a local point of contact for NAV. EU companies can register without a fiscal representative, though many still use one to manage language, reporting, and audit exposure.

Registration typically takes several weeks once complete documentation is submitted. Businesses are expected to be registered before issuing VAT invoices. While EU businesses selling qualifying goods or services to Hungarian consumers can use OSS to avoid local registration, VAT is still charged at Hungarian rates and reported through a single EU filing.

How does Hungarian VAT compliance work?

Hungary runs a tightly monitored VAT system. Once you’re registered, compliance is ongoing and highly digital, and it comes with strict deadlines.

Be mindful of these factors:

VAT returns and payments

Foreign businesses and higher-liability taxpayers usually file VAT returns monthly, while some smaller Hungarian businesses qualify for quarterly or annual filing. Monthly returns are due by the twentieth day of the month following the reporting period. Any VAT owed must be paid by the same deadline as the return filing. Late payments incur interest, and late or missing returns can result in substantial penalties.

Real-time and cross-border reporting

Hungary’s tax authority requires near real-time electronic reporting of issued invoices through its Online Invoice System (Online Számla). This applies to almost all domestic B2B and B2C invoices, regardless of the VAT amount. Missing or incorrectly reported invoices can lead to fines that scale with invoice value. NAV routinely cross-checks invoice data against VAT returns, which makes inconsistencies easy to detect.

Businesses making intra-EU B2B sales should submit EU recapitulative statements alongside VAT returns. These reports link VAT numbers across member states and are a core audit trigger.

Recordkeeping and audits

VAT-related records must be retained for at least eight years. This includes invoices, contracts, accounting records, and documentation supporting VAT deductions. Since Hungary’s tax authority is highly data-driven and proactive, issues surface quickly rather than years later, so be prepared.

What are the invoicing requirements for Hungarian VAT?

VAT invoices in Hungary are tightly regulated formal tax documents. They must be issued by the fifteenth day of the month following the taxable supply. If payment is made immediately, then the invoice is expected at the time of payment.

Each invoice needs a unique, continuous numbering sequence. Separate VAT registrations or schemes require separate sequences, with no gaps or overlaps.

The invoice also must include:

• Seller’s legal name, address, and Hungarian VAT number

• Accurate description of goods or services supplied, plus quantity or scope

• Net amount, applicable VAT rate, and VAT amount. Invoices can be issued in foreign currency, but businesses must use an accepted exchange rate and include the VAT amount in HUF.

Invoices for B2B transactions also require the customer’s legal name, address, and VAT number. Identifying details in consumer sales, though limited, are still mandatory.

If a transaction is zero-rated, VAT-exempt, or subject to reverse charge, the invoice must clearly state the legal basis for that treatment. While invoices can be issued in any language, the tax authority can require a Hungarian translation during an audit.

How do VAT refunds work in Hungary?

If your Hungarian-registered business has a VAT return that shows more VAT paid on costs than collected on sales, you can either carry the credit forward or request a refund. The tax authority can review documentation before releasing refunds, especially for new taxpayers or large amounts. Inconsistent invoices or missing records can delay or block repayment.

Certain expenses, such as entertainment or a percentage of passenger vehicle costs, are partially or fully nondeductible. VAT that isn’t deductible can’t be refunded. Under specific conditions, businesses can reclaim VAT previously paid on invoices that ultimately go unpaid, though timing and documentation rules apply.

EU-based businesses not registered in Hungary can reclaim Hungarian VAT through their home country’s electronic VAT refund portal. Claims must be submitted by September 30 of the year following the expense year.

Hungary refunds VAT to businesses in specific non-EU countries under reciprocity agreements, including the UK, Switzerland, Norway, Serbia, and Turkey. Businesses outside these jurisdictions generally can’t recover Hungarian VAT.

How Stripe Tax can help

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Stripe Tax can help you:

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