Hungary introduced Value Added Tax (VAT) in 1988, and is termed Általános forgalmi adó locally (AFA).
The current VAT Act 2008 is based on the European Union’s EU VAT Directive, which all member states must implement. This includes the rules for Hungarian VAT registrations, returns, compliance, Intrastat and EC Sales Lists.
The Hungarian Ministry of Finance and State Tax Authority are responsible for the administration of the VAT regime. In support of the VAT Act, they produce the Tax Authority Bulletin, which provides non-binding guidance on day-to-day Hungarian VAT compliance issues.
If a foreign company is selling goods or services in Hungary, then it may have to VAT register as a non-resident VAT trader. Typical examples of where this is required include:
After the implementation of the 2010 EU VAT package, there are now very limited circumstances where a foreign business supplying only services must VAT register in Hungary.
Note that providers of electronic, broadcast or telecoms services to consumers in Hungary only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.
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