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Measure Name
Date when measure came into force
2012 VAT reform 2011/11/30
2014 VAT changes 2014/01/01
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Generic Tax Name VAT
Tax name in the national language Általános forgalmi adó
Tax name in English Value added tax
Member State HU-Hungary
Tax in force since 1988/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other

Social security contribution Employers
Employees
Other
 
Legal base

Act 127 of 2007 on value added tax.

 
Who sets
The tax rate is set by




The tax base is set by




The reliefs are set by




Comments
 
Beneficiary





Comments

 
Geographical Scope
Territories excluded (article 6 2006/112/EC)

-



Comments

Hungary

 
Taxpayers
Included taxable persons doing occasional transactions (article 12 2006/112/EC)


Comments

Special scheme for SMEs (article 281 2006/112/EC and following) None
Exemption
Graduated relief
Turnover threshold: 6,000,000.00  EUR/Natcur
Comments

Hungary applies – as an option – a special exemption scheme for small enterprises, whose annual turnover is no higher HUF 6,000,000.


Common Flat-rate scheme for farmers (article 295 2006/112/EC and following) None
All categories
Some categories
Flat rate compensation percentage (general):
Flat rate compensation percentage for forestry:
7.00 %
Flat rate compensation percentage for fisheries:
7.00 %
Comments

The general flat rate compensation percentage is 12 % for some products, and 7 % for some products and services.


There is a special scheme on the following





Comments

Special derogations to continue to tax (annex X)




Comments

Special derogations to continue to exempt (annex X)













Comments

According to the Hungarian legislation, the international transport of passengers shall be exempt, if either the point of arrival or the point of destination, or both, are located outside Hungary. In other cases these are taxed transactions, where the standard VAT rate is applicable.



Comments

Taxable person providing supply of goods or services. Taxable person shall mean any person or organization with legal capacity who carries out any economic activity under his own name, regardless the location, purpose or results of that activity. In case of import the person liable for payment of tax is the person importing the goods. If the customs procedure is handled by an indirect customs representative on behalf of the importer, the person liable for paying VAT on import is the customs representative. In case of Intra-Community acquisition of goods the person acquiring the goods. Council directive 2008/8/EC amended the Directive 2006/112/EC as regards the place of services. As of 1st of January 2010 for supplies of services to taxable persons, the general rule with respect to the place of supply of services should be based on the place where the recipient is established, rather than where the supplier is established.

In accordance with the amendment of the VAT Directive’s legislation, as of 1st January 2013 the place of hiring, other than short-term hiring, of a means of transport to a non-taxable person shall be the place where the customer is established, has his permanent address or usually resides. However, the place of hiring a pleasure boat to a non-taxable person, other than short-term hiring, shall be the place where the pleasure boat is actually put at the disposal of the customer, where this service is actually provided by the supplier from his place of business or a fixed establishment situated in that place.

For the purposes of applying the rules concerning the place of supply of services, a non taxable legal person who is identified or should be identified for VAT purposes  shall be regarded as a taxable person.

 
Tax object and basis of assessment
The following items are regarded as supply of goods and hence taxed under VAT (article 14 - 15 2006/112/EC)




Comments

The following items are regarded as supply of goods and hence taxed under VAT (article 18 2006/112/EC)



Comments

By derogation to article 26 paragraph 1, the following item(s) are not regarded as supply of services and hence not subject to VAT (article 26(2) 2006/112/EC)


Comments

By application of article 27 of 2006/112/EC, the following item is treated as supply of services The supply by a taxable person of a service for the purposes of his business, where the VAT on such a service, were it applied by another taxable person, would not be wholly deductible
Comments


Comments

The following transactions shall be subject to VAT: Supply of goods and services for consideration, importation and Intra-Community acquisition of goods. If the taxable person transfers goods (services) forming part of his business assets, or uses or utilizes goods (services) for own purposes free of charge, where VAT on the goods (services) in question was wholly or partly deductible, shall be treated as supplies made for consideration. The supply of goods for consideration shall include the transfer of goods by a taxable person from his undertaking to another Member State except the transfers with the following purposes:

  • the supply of goods in question, where the goods are to be installed or assembled, with or without a trial run by the taxable person within the territory of the Member State of arrival of the dispatch or transport or the supply for distance selling,
  • the supply of goods on board ships, aircraft or trains during the part of a transport of passengers effected in the Community,
  • the supply of gas through the natural gas distribution system (pipelines), or of electricity, and as of 1st January 2011 the supply of heat or cooling energy through heating or cooling networks,
  • the supply of goods for export and exempted Intra-Community supply,
  • the supply of service performed for the taxable person and involving work on the goods in question physically carried out in the Member State in which the dispatch or transport of the goods ends, provided that the goods, after being worked upon, are re-dispatched to that taxable person in Hungary,
  • temporary use of the goods in question within the territory of the Member State of arrival of the dispatch or transport of the goods for the purposes of the supply of services,
  • temporary use of the goods in question, for a period not exceeding 24 months, within the territory of the Member State in which the import of the same goods from a third country with a view to temporary use would be eligible for the arrangements for temporary importation with full exemption from import duties
  • supply of goods by the taxable person for his customer supplies in another Member State of the Community.

 As of 1st January 2013 the transfer of a business unit is not considered a supply of goods.

The tax base is the consideration. The consideration shall include everything received or to be received by the supplier whether from the customer or a third party, such as price subsidies and other budgetary subsidies directly affecting the price. The tax base shall include taxes, duties, levies and charges, excluding the VAT. The tax base shall also include incidental expenses such as commission, packing, transport costs etc.. The price reductions, price discounts, rebates shall be excluded from the tax base. In respect of supplies of goods free of charge but deemed to be supplies for consideration the taxable amount is the market value, in absence of such value the production costs. Concerning supplies of services carried out free of charge but deemed to be supplies for consideration the taxable amount shall be the full cost to the taxable person of providing the services. 

In case of importation the taxable amount is the value determined for customs purposes, including also taxes, duties, levies and other charges, but excluding VAT. The tax base shall also include incidental expenses, such as commission, packing, transport costs (etc.) incurred up to the first place of destination.

 
Deductions, Allowances, Credits, Exemptions
Exempted sectors*
  • The transport of passengers shall be exempt if either the point of arrival or the point of destination, or both, are located outside Hungary, in other cases these are taxed transactions, where the standard VAT rate is applicable.
  • Services provided by public radio and public TV are exempted. 
  • Social services (with the exception of  social catering) and the medical, dental care are exempt from VAT.

Special Measures derogating from the normal VAT rules in accordance with Article 395 of Directive 2006/112/EC*

By way of derogation from Article 193 of the VAT Directive in accordance with Article 395 of the VAT Directive, Hungary is authorized as of 1st July 2012 to apply a reverse charge mechanism to the supply of certain specific agricultural products, such as wheat and meslin, rye, barley, oats, maize, triticale, soya beans, whether or not broken, rape or colza seeds, whether or not broken, sunflower seeds, whether or not broken.



Comments

The taxable person can deduct from the tax payable the input VAT if the following conditions are met:

  • the services or goods acquired are used for the taxable transactions of the taxable person and,
  • the taxable person holds a document (invoice, import document etc.) verifying the tax charged, issued in the name of the taxable person.

 

There is no right to deduct input VAT where the goods or services acquired are used for tax exempted transactions. However there are tax exempted transactions with right to deduct, such as export and like transactions, international transport, exempted Intra-Community supply of goods. The tax exempted transactions without right of deduction include inter alia insurance, financial services, postal services, human health care, education, public radio and television broadcasting, some sport services, gambling services, letting and leasing of immovable property etc.

 

It is prohibited to deduct input VAT on the purchase of the following goods and services even when it is used for business purposes:

  • fuel used for the passenger car,
  • leaded or unleaded motor fuels, except when (as of 1st January 2011) those are used in the course of experimental development for new technological developments
  • supplies of passenger cars (with the exception of hearses as from 1st January 2014),
  • goods related to the operation or maintenance of the passenger car,
  • motorcycles of engine capacity exceeding 125 ccm, yachts, sport and pleasure boats,
  • foodstuffs and beverages,
  • restaurant, confectionary and similar services,
  • entertainment services,
  • supplies of residential properties
  • goods and services related to the construction and renovation of housing,
  • 30% of input VAT on phone services (including mobile phone services and Internet-protocol-based voice transmission services)
  • 50 % of input VAT on services related to the operation or maintenance of passenger cars
  • parking fees and road tolls except the parking fee and road toll for cars weight of which exceeds 3,500 kg,
  • taxi services.

 

Until 31 December 2011 it was prohibited in our legislation to deduct input VAT in connection with hire of passenger car, motorcycles, yachts, sport and pleasure boats. As of 1st January 2012 the taxable person, who rents the abovementioned vehicles, can deduct the input VAT. 

However in many cases if those purchases are effected for resale, or used as being included in the taxable amount - shown under material costs - of the supplied service, or if the services are procured with a view to the supply of services where the taxable person is acting in his own name but on behalf of another person the tax is deductible.

For example, there is no prohibition of tax deduction on goods and services related to the construction and renovation of housing, where the taxable person is engaged in construction for resale. By way of derogation from the abovementioned regulations, the taxable person is allowed to deduct the input VAT of the passenger car, if it is purchased for the purpose of resale, or used for the supply of taxi services, or for leasing or letting. The prohibition of deduction of VAT related to car operation and maintenance does not apply if the goods are effected for resale, or if the services are procured with a view to the supply of services where the taxable person is acting in his own name but on behalf of another person. Furthermore, the VAT of these goods and services is deductible, if used as being included in the taxable amount - shown under material costs - of the supplied car leasing service.

The input tax on supplies of residential properties is deductible as well, if those purchases are effected for resale, but if the supply of the residential property according to general rules is exempted from VAT, it is necessary that the supplier opts for the taxation in order to be able to deduct the input VAT.

 
Rate(s) Structure
Standard VAT rate Rate: 27.00 %
Comments

Reduced rate 1

(article 98 of Directive - Annex III of Directive)
Rate: 5.00 % on full or part of the following items

Article 98(2) 2006/112/EC

Foodstuffs (including beverages but excluding alcoholic beverages) for human and animal consumption; live animals, seeds, plants and ingredients normally intended for use in the preparation of foodstuffs; products normally used to supplement foodstuffs or as a substitute for foodstuffs
Supply of water
Pharmaceutical products of a kind normally used for health care, prevention of illness and as treatment for medical and veterinary purposes, including products used for contraception and sanitary protection
Medical equipment, aids and other appliances normally intended to alleviate or treat disability, for the exclusive personal use of the disabled, including the repair of such goods, and supply of children's car seats
Transport of passengers and their accompanying luggage
Supply, including on loan by libraries, of books on all physical means of support (including brochures, leaflets and similar printed matter, children's picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or predominantly devoted to advertising
Admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities
Reception of radio and television broadcasting services
Supply of services by writers, composers and performing artists, or of the royalties due to them
Provision, construction, renovation and alteration of housing, as part of a social policy
The renovation and repair of private dwellings, excluding materials which account for a significant part of the value of the service supplied
Window cleaning and cleaning in private households
Supply of goods and services of a kind normally intended for use in agricultural production but excluding capital goods such as machinery or buildings
Accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites
Restaurant and catering services, it being possible to exclude the supply of (alcoholic and/or non-alcoholic) beverages
Admission to sporting events
Use of sporting facilities
Supply of goods and services by organisations recognised as being devoted to social wellbeing by Member States and engaged in welfare or social security work, in so far as those transactions are not exempt pursuant to Articles 132, 135 and 136
Supply of services by undertakers and cremation services, and the supply of goods related thereto
Provision of medical and dental care and thermal treatment in so far as those services are not exempt pursuant to points (b) to (e) of Article 132(1)
Supply of services provided in connection with street cleaning, refuse collection and waste treatment, other than the supply of such services by bodies referred to in Article 13
Minor repairs of bicycles
Minor repairs of shoes and leather goods
Minor repairs of clothing and household linen (including mending and alteration)
Domestic care services such as home help and care of the young, elderly, sick or disabled
Hairdressing

Article 102 2006/112/EC

Supply of natural gas
Supply of electricity
Supply of district heating

Article 103(1) 2006/112/EC

Pictures, collages and similar decorative plaques, paintings and drawings, executed entirely by hand by the artist, other than plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, hand-decorated manufactured articles, theatrical scenery, studio back cloths or the like of painted canvas (CN code 9701)
Original engravings, prints and lithographs, being impressions produced in the limited numbers directly in black and white or in colour of one or of several plates executed entirely by hand by the artist, irrespective of the process or of the material employed, but not including any mechanical or photomechanical process (CN code 9702 00 00)
Original sculptures and statuary, in any material, provided that they are executed entirely by the artists.
Sculpture casts the production of which is limited to eight copies and supervised by the artist or his successors in title (CN code 9703 00 00); on an exceptional basis, in cases determined by the Member States, the limit of eight copies may be exceeded for statuary casts produced before 1 January 1989
Tapestries (CN code 5805 00 00) and wall textiles (CN code 6304 00 00) made by hand from original designs provided by artists, provided that there are not more than eight copies of each
Individual pieces of ceramics executed entirely by the artist and signed by him
Enamels on copper, executed entirely by hand, limited to eight numbered copies bearing the signature of the artist or the studio, excluding articles of jewellery and goldsmith's and silversmith's wares
Photographs taken by the artist, printed by him or under his supervision, signed and numbered and limited to 30 copies, all sizes and mounts included
Postage or revenue stamps, postmarks, first-day covers, pre-stamped stationery and the like, used, or if unused not current and not intended to be current (CN code 9704 00 00)
Collections and collector's pieces of zoological, botanical, mineralogical, ethnographic or numismatic interest (CN code 9705 00 00)
Goods, other than works of art or collector's items, which are more than 100 years old (CN code 9706 00 00)
Comments
  • We apply a reduced rate of 5 % to human medical products, but the standard rate is applicable to products for veterinary purposes.
  • A reduced rate of 5 % applies to some medical equipment and medical aids, but to the repair of those goods and the supply of children’s car seat the standard rate is applicable.
  • A reduced rate of 5 % is applicable for books (including books on other physical means of support) newspapers and periodicals.
  • A reduced rate of 5 % is applicable to district heating, including the production of heat from renewable energy sources.
  • As of 12 April 2011 a reduced rate of 5 % is applicable to the supply of instrumental music services rendered by performing artists, such as live instrumental music provided in restaurants and other hospitality establishments of the like; private events among family members or friends; certain events without admission fee.
  • Hungary applies 5 % reduced rate on live pig and pig carcass as from 1st January 2014.


Reduced rate 2

(article 98 of Directive - Annex III of Directive)
Rate: 18.00 % on full or part of the following items

Article 98(2) 2006/112/EC

Foodstuffs (including beverages but excluding alcoholic beverages) for human and animal consumption; live animals, seeds, plants and ingredients normally intended for use in the preparation of foodstuffs; products normally used to supplement foodstuffs or as a substitute for foodstuffs
Supply of water
Pharmaceutical products of a kind normally used for health care, prevention of illness and as treatment for medical and veterinary purposes, including products used for contraception and sanitary protection
Medical equipment, aids and other appliances normally intended to alleviate or treat disability, for the exclusive personal use of the disabled, including the repair of such goods, and supply of children's car seats
Transport of passengers and their accompanying luggage
Supply, including on loan by libraries, of books on all physical means of support (including brochures, leaflets and similar printed matter, children's picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or predominantly devoted to advertising
Admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities
Reception of radio and television broadcasting services
Supply of services by writers, composers and performing artists, or of the royalties due to them
Provision, construction, renovation and alteration of housing, as part of a social policy
The renovation and repair of private dwellings, excluding materials which account for a significant part of the value of the service supplied
Window cleaning and cleaning in private households
Supply of goods and services of a kind normally intended for use in agricultural production but excluding capital goods such as machinery or buildings
Accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites
Restaurant and catering services, it being possible to exclude the supply of (alcoholic and/or non-alcoholic) beverages
Admission to sporting events
Use of sporting facilities
Supply of goods and services by organisations recognised as being devoted to social wellbeing by Member States and engaged in welfare or social security work, in so far as those transactions are not exempt pursuant to Articles 132, 135 and 136
Supply of services by undertakers and cremation services, and the supply of goods related thereto
Provision of medical and dental care and thermal treatment in so far as those services are not exempt pursuant to points (b) to (e) of Article 132(1)
Supply of services provided in connection with street cleaning, refuse collection and waste treatment, other than the supply of such services by bodies referred to in Article 13
Minor repairs of bicycles
Minor repairs of shoes and leather goods
Minor repairs of clothing and household linen (including mending and alteration)
Domestic care services such as home help and care of the young, elderly, sick or disabled
Hairdressing

Article 102 2006/112/EC

Supply of natural gas
Supply of electricity
Supply of district heating

Article 103(1) 2006/112/EC

Pictures, collages and similar decorative plaques, paintings and drawings, executed entirely by hand by the artist, other than plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, hand-decorated manufactured articles, theatrical scenery, studio back cloths or the like of painted canvas (CN code 9701)
Original engravings, prints and lithographs, being impressions produced in the limited numbers directly in black and white or in colour of one or of several plates executed entirely by hand by the artist, irrespective of the process or of the material employed, but not including any mechanical or photomechanical process (CN code 9702 00 00)
Original sculptures and statuary, in any material, provided that they are executed entirely by the artists.
Sculpture casts the production of which is limited to eight copies and supervised by the artist or his successors in title (CN code 9703 00 00); on an exceptional basis, in cases determined by the Member States, the limit of eight copies may be exceeded for statuary casts produced before 1 January 1989
Tapestries (CN code 5805 00 00) and wall textiles (CN code 6304 00 00) made by hand from original designs provided by artists, provided that there are not more than eight copies of each
Individual pieces of ceramics executed entirely by the artist and signed by him
Enamels on copper, executed entirely by hand, limited to eight numbered copies bearing the signature of the artist or the studio, excluding articles of jewellery and goldsmith's and silversmith's wares
Photographs taken by the artist, printed by him or under his supervision, signed and numbered and limited to 30 copies, all sizes and mounts included
Postage or revenue stamps, postmarks, first-day covers, pre-stamped stationery and the like, used, or if unused not current and not intended to be current (CN code 9704 00 00)
Collections and collector's pieces of zoological, botanical, mineralogical, ethnographic or numismatic interest (CN code 9705 00 00)
Goods, other than works of art or collector's items, which are more than 100 years old (CN code 9706 00 00)
Comments
  • Hungary applies a reduced rate of 18% to milk (excluding mother’s milk); dairy products; flavoured milk; and products containing cereals, flour, starch, or milk. Standard VAT rate applies to other foodstuffs (with the exception of live pig and pig carcasses, because 5 % reduced rate is applicable to those).
  • A reduced rate of 18 % is applicable to hotel accommodation.
  • A reduced rate of 18% is applicable to entrance to open-air festivals.


Special reduced VAT rate for specific regions (including articles 104 and 105 2006/112/EC) Rate:
Regions
Comments

Special provisions under article 110 2006/112/EC (existing provisions prior to 1991):No

Special provisions under articles 111 2006/112/EC:No

Special provisions under articles 112 2006/112/EC:No

Special provisions under articles 113 2006/112/EC:No

Special provisions under articles 114 2006/112/EC:No

Special provisions under articles 115 2006/112/EC:No

Special provisions under articles 116 2006/112/EC:No

Special provisions under articles 117 2006/112/EC:No

Special provisions under articles 118 2006/112/EC:No

Special provisions under articles 119 2006/112/EC:No

Special provisions under articles 120 2006/112/EC:No

Special provisions under articles 121 2006/112/EC:No

Special provisions under articles 122 2006/112/EC:No


Comments

As of 1st January 2012 the standard VAT rate is 27% in Hungary. The scope of the reduced rate of 5% and 18 % changed as aforesaid: as from 20th July 2012 reduced rate of 18 % is applicable to the entrance to open-air festivals, as from 1st January 2013 reduced rate of 5 % is applicable to some medical aids and as from 1st January 2014 we apply 5 % reduced rate on live pig and pig carcasses.

 
Tax due date

The tax returns are to be filed and tax is to be paid on a monthly, a quarterly or a yearly basis. The applicable tax period depends on the amount of the VAT paid by the taxable person in the preceding tax year. The tax has to be paid until the 20th day following the month, or quarter in question. In case of taxable persons filing on a yearly basis, tax is to be paid until 25th of February following the year in question.

 
Tax collector

National Tax and Customs Administration

 
Special features
 
Economic function







Comments
 
Environmental taxes



Comments
 
Tax revenue
ESA95 code d211

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 2,627,571.00 HUF 9.18
2011 2,379,253.00 HUF 8.46
2010 2,325,608.00 HUF 8.60
2009 2,192,234.00 HUF 8.35
2008 2,068,438.00 HUF 7.65
2007 2,013,271.00 HUF 7.88
2006 1,800,345.00 HUF 7.46
2005 1,856,547.00 HUF 8.27
2004 1,831,647.00 HUF 8.72
2003 1,539,868.00 HUF 8.08
2002 1,340,914.00 HUF 7.70
2001 1,230,216.00 HUF 8.00
2000 1,159,959.00 HUF 8.71

Comments