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VAT in Hungary - 2021 Procedure

VAT in Hungary

Updated on Thursday 17th June 2021

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The Value Added Tax (VAT) is one of the main taxes in Hungary. It applies to all of the goods and services produced in Hungary. The standard VAT rate in Hungary is 27% and a reduced VAT rate of 18% applies for dairy and bakery products and hotel services. A reduced rate of 5% applies for the sale of most medicinal products and medical instruments.
 
Our lawyers in Hungary can provide complete tax planning services in Hungary.
 
The rates for VAT have been maintained for 2021 in Hungary, so investors do not have to expect any new rules with regards to this matter. Companies that are liable to VAT in Hungary have to register with the competent institutions and submit VAT returns in accordance with the applicable law. For in-depth information on the VAT obligations companies have, our team of Hungarian lawyers remain at your disposal. If you want to start a business in 2021, our attorneys can represent you in this process.  
 

Entities subject to VAT in Hungary in 2021 

 
All types of companies in Hungary, local and foreign, are subject to the applicable VAT rate. Hungarian legal entities are granted a tax number after they are registered. Non-Hungarian legal entities must also register for VAT if they perform business transactions in Hungary.
 
Foreign investors must submit the necessary documents for VAT registration at the local tax authorities. All documents must be in Hungarian. Our lawyers in Hungary can help you throughout the VAT registration procedure and can also help you open a company in Hungary.
 

Exemptions for the VAT tax in Hungary

 
Certain businesses may be exempt from the VAT tax in Hungary if they provide goods and services which are exempt from VAT, as stipulated in the Hungarian law:
  • public postal services;
  • the supply of  human organs, blood and milk;
  • dentists and dental technicians;
  • certain education activities;
  • insurance and reinsurance transactions and their related services performed by insurance agents and brokers;
  • credit granting;
  • gambling;
  • the supply of postage stamps;
  • sale of land parcels;
  • leasing or letting of immovable property;
  • activities carried out by public radio and television stations, etc.
 
Non-profit services providers in Hungary benefit from the VAT exemption for the following services: hospital and medical care, social services, services related to the protection of children, nursery and student hostel services, cultural services, services relating to sports and physical training, etc.
 
For a complete list of the goods and services exempt from the VAT rate in Hungary and other applicable conditions, please contact our law firm in Hungary.
 
We can provide complete legal services for company incorporation or company liquidation in Hungary