Tax rate by region Hungary

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Value-Added Tax (VAT) in Hungary: A Guide for SaaS and Digital Services

Hungary implemented a Value-Added Tax (VAT) system in 1988, aiming to enhance tax compliance and generate revenue. The standard VAT rate applicable to SaaS and other digital services in Hungary is 27%. However, a reduced rate of 5% may apply to specific categories of goods or services. Certain educational and cultural services, for instance, could be exempt from VAT.

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Hungary

Hungary implemented a VAT system in 1988, focusing on improving tax compliance and revenue generation.

Official government link: National Tax and Customs Administration

27.00%

E-products and services VAT/Sales tax rate

5.00%

Reduced tax rate

Reduced tax rate product categories

Audiobooks, e-books and newspapers have reduced tax

Exempted product categories

Certain educational services and specific cultural services may be exempt from VAT.

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Non-resident companies have to register as soon as goods are being delivered or services are being provided

Online registration possible

Yes

Local representative needed

Not mandatory

Registration procedure

New users should select the “Union Scheme” option, while established taxable persons should choose the “non-Union Scheme” option. To register on Hungary’s MOSS Portal, the company must provide its full name and identification number. Upon successful registration, they will receive an email with an activation link, allowing them to access the MOSS portal using their email and password.

For taxable persons not established in the EU (non-Union scheme), the following information is required:

Company name and trading name (if different)
Full postal address, email address, and website
Name and phone number of the contact person
BIC number
National tax number (if applicable)
Country of business establishment
IBAN or OBAN number
An electronic declaration confirming the business is not registered for VAT within the EU
Date of commencement of using the scheme

List of digital and electronic services liable for tax

E-books, images, movies, and videos, whether purchased from platforms like Shopify or accessed through services like Netflix, are typically classified as “Audio, visual, or audio-visual products” in tax terminology. Downloadable and streaming music, whether buying an MP3 or using services like SoundCloud or Spotify, also fall into the audio category.

This category further includes cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS). Additionally, it covers websites, site hosting services, internet service providers, online ads, and affiliate marketing.

Penalties

Late Filing Penalties:
A fine up to HUF 500,000 (approximately €1,406) may be imposed for failing to file a VAT return or for late submission. This penalty can apply per tax return.
Incorrect Returns:
If a VAT return is incomplete or incorrect, a penalty of up to HUF 100,000 (about €270) may be charged.
Late Payment Penalties:
Interest on late VAT payments is calculated daily, based on the central bank lending rate plus 5 percentage points, divided by 365. If the tax authority discovers a tax liability during an audit, a penalty of 50% of the tax due may be imposed on the taxpayer.
Non-Compliance:
For non-registration or late registration, a default penalty up to HUF 500,000 can be applied.
Risky Taxpayers:
Additional penalties may apply to risky taxpayers, which can be up to 150% of the general late payment interest rate.

Registration threshold

No threshold, non-resident companies must register for VAT

Filing interval

Monthly

Filing deadline

By the 20th day of the month following the reporting period

E-invoicing requirements

Yes

Record keeping

You need to maintain the records for 8 years after selling the service, and be prepared to provide them if requested.

How-To Guides: Hungary SaaS VAT

Step: 1 Threshold

Effective May 1, 2004, Hungary requires non-EU vendors (including online platforms) of digital services to consumers (B2C) in Hungary to register for and collect VAT, regardless of the sales amount. The obligation was expanded to EU-established digital services providers effective January 1, 2015.

 

Effective January 1, 2019, Hungary applies a VAT registration threshold of EUR 10,000 for EUestablished digital services providers. The threshold does not apply to non-EU businesses.

Step: 2 Business Registration

Taxpayer registration is required with the Hungarian National Tax and Customs Administration (Nemzeti Adó‑ és Vámhivatal) before commencing business; the tax number also serves as the VAT ID.

Step: 3 TIN/VAT Number

Called the Hungarian VAT identification number (same as tax number); issued by NAV upon registration.

Step: 1 Standard VAT Rate

Standard VAT in Hungary is 27% (applies to SaaS/Digital Services).

Step: 2 VAT Formula

To calculate your tax amount, use this formula:

 

Tax Amount = Net Price x 27%

Step: 3 Reverse Charge (B2B)

Applies to cross-border B2B SaaS sales. If your buyer is a Hungarian VAT-registered business, you do not charge VAT. The buyer “self-assesses” the tax.

Step: 1 Selling B2C

VAT must be charged based on the consumer’s location; non‑EU businesses must register and charge Hungarian VAT or use the EU OSS to declare VAT for EU B2C digital services.

Step: 2 Selling B2B

For B2B supplies, VAT is often not charged by the supplier (reverse charge applies) if the place of supply is the business customer’s Member State.

Step: 3 Invoice Requirements

Mandatory fields include:

  • supplier name
  • VAT number
  • sequential invoice number
  • invoice date
  • description of services
  • taxable amount and VAT amount if charged
  • customer VAT number if applicable (for VAT payers).

Invoices can be issued electronically with required reporting.

Step: 1 Filing Interval

VAT returns are generally filed periodically; if using OSS for EU B2C digital services, file quarterly OSS return.

Step: 2 Filing Deadline

For OSS VAT: quarterly — e.g., Q1 due end of April; Hungarian domestic VAT returns usually due by the 20th of the month following the tax period (standard EU practice). (OSS quarterly deadlines indicated via NAV OSS portal schedule).

Step: 3 Submission

VAT returns and OSS filings are submitted via NAV electronic portals (e‑filing/OSS portal); payments are made electronically to NAV accounts.

Step: 4 Record Keeping

Invoices and VAT records must be retained for at least eight years under Hungarian VAT compliance.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Hungary VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

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