Hungarian VAT returns
Any company registered with the Hungarian tax authorities (see our Hungarian VAT registration briefing) as a non-resident VAT trader must report taxable transactions through periodic filings, known as returns.
How often are Hungarian VAT returns required?
In Hungary the default tax return period is quarterly, however from 2015 all newly established businesses are required to submit monthly returns until the last day of the calendar year following the date of their establishment. From then on the frequency with which tax returns should be submitted depends on the amount of VAT a business pays.
The return period for businesses is monthly if the net payable VAT exceeded HUF 1 million in the second year preceding the current tax year. This is also the case if a business exceeds HUF 1 million in VAT in any quarter of the current year.
Small businesses, without an EU VAT number, paying less than HUF250,000 VAT a year may submit annual VAT returns. In Hungary the majority of VAT returns are submitted electronically however, a foreign business may submit a paper return if it does not have an EU VAT number.
What Hungarian VAT can be deducted?
In addition to declaring sales or output VAT in the Hungarian return, companies can offset this by the corresponding input or purchase VAT. There are some exceptions, including:
- Restaurants, catering and entertainment
- Taxis and parking charges
- Passenger cars and associated fuel and products
What are the deadlines for filing Hungarian VAT returns?
Any Hungarian monthly or quarterly VAT filing is due on the 20th day of the month following the period end. Annual Hungarian VAT returns are due on the 25th February following the year in question.
Any Hungarian VAT due must be paid at the same time. All payment must be made in HUF.
|Type of return||Frequency||Filing deadline||Document||Format|
|VAT return||Monthly||20th day of the month after the end of the taxation period||Form 1865A|
|Quarterly||20th day of the month after the end of the taxation period||Form 1865A||XML|
|Annually||25th February of the following tax year.||Form 1865A||XML|
|Real Time reporting||Monthly||20th day of the month after the end of the taxation period||-||XML|
|EC listing||Monthly||25th of the following month||Form 18A60|
|Quarterly||25th of the following quarter||Form 18A60|
|VAT Book||Monthly||30th June of the following month||1965M||XML|
|Quarterly||30th June of the following month||1965M||XML|
|Annually||30th June of the following month||1965M||XML|
|Intrastat||Monthly||15th of the following month||Intrastat Declaration||Fixed format|
Hungarian VAT penalties
If there are misdeclarations or late fillings of Hungary VAT returns, foreign companies may be subject to penalties. Late filings are subject to a maximum penalty of HUF500,000 with the penalty for a first offence being HUF100,000. If VAT payment is delayed, interest is charged on the amount due based on the National Bank of Hungary prime rate. For incorrect VAT reporting and payments the penalty may be up to 75% of the tax due in cases of concealment. Interest may be charged on the underpaid tax for up to three years.
There is a five year statute of limitations for Hungarian VAT.
How are Hungarian VAT credits recovered?
If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), then a Hungarian VAT credit arises. In theory, this is due back to the VAT registered business. In Hungary VAT is usually refunded by the tax authorities within thirty days. However, depending on the amount to be refunded it may be carried forward. The threshold for refunds being carried forward depends on the frequency with which a business files VAT returns:
- HUF 1 million – monthly returns
- HUF 250,000 – quarterly returns
- HUF 50,000 – annual returns
Need help with your Hungarian VAT compliance?
Researching Hungarian VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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