The Value Added Tax in 2021
The Value Added tax (VAT) in Hungary is used for the supply of goods and services produced in Hungary and it does not apply only to the sale of such goods, but also to other forms of transactions, like assignments, grants, hire of goods, agreements and others. The standard VAT rate in Hungary is 27 percent and reduced rates apply for the supply of certain goods and services.
VAT taxpayers in Hungary
Although the VAT applies to the supply of goods and services and other transactions, there are some that are exempt from the Value Added Tax:
- goods provided free for business considerations, not including those transferred between independent parties that are in an economic relationship;
- samples of gifts that have a small value;
- public donation.
A reduced rate of 18 percent applies to diary and bakery products, hotel services and admission to short-term open-air events. A reduce rate of 5 percent applies to the sale of medicinal products (most of them), the sale of medical instruments and certain medical aids.
Some goods and services are also exempt from VAT: public postal services, hospital and medical care offered by non-profit service providers, the supply of services by dentists or dental technicians, social services offered by non-profit service providers, certain education activities, the supply of certain cultural activities by non-profit service providers, insurance and reinsurance transactions, special funds management services, gambling services, the sale of land parcels and others.
For a complete list of the exempted services, you can make an inquiry to our company registration firm in Hungary.
Registration for taxpayers
All companies incorporated in Hungary
, including non-profit organizations, receive a VAT number upon registration with the Hungarian Court of Registry. Non-Hungarian legal entities must also register for VAT purposes of they perform business transactions in the country.
, as well as any issues that need to be resolved with the tax authority must be communicated in Hungarian. You can contact our company formation agents in Hungary
if you need any kind of assistance involving VAT issues of if you want to open a company in Hungary
For 2021, the VAT rates charged in Hungary have been maintained as they were in the previous years; please mind that if you will become a VAT payer in 2021 (which implies that you have received a VAT number issued by the Hungarian tax institutions), you will have to comply with certain legal requirements. Here, you are advised to verify the rules and regulations stipulated under the Hungarian VAT Act. For the latest regulations, you can address to our specialists in company formation in Hungary as well.