The economic algorithms predict that Hungary’s Sales Levy Rate will have a long-term average value of roughly 27.00 percent in 2022. In Hungary, buyers are subject to a tax that is calculated depending on the cost of specific goods and services.
Virtual sellers from the EU who sell to Hungary may willingly file for registration, depending on the size of their transactions. When beginning a taxable business, VAT payers must notify the Hungarian Levy Department.
The name, location, organizational headquarters, and tax id of the taxpayer in any international country of citizenship must all be provided at the moment of registration.
Hungarian value-added taxation id number. a unique identifier of 11 numbers, is the Hungarian Levy Identification number. the value-added taxation number’s holder is identified by the first eight of its numbers, together with the VAT standing and the relevant duty agency by the ninth and final digits.
Registration
Foreign entrepreneurs are allowed to conduct trade through their subsidiary companies that are established in Hungary. The companies who conduct business activities in the following industries without setting up branch offices and with no native employees must file for Tax registration in the country:
- A business engaged in commercial activity;
- activities restricted to the sale of goods acquired by foreigners and kept in Hungary;
- provision of building and construction-related materials;
- professional sports material supply;
- artistic goods or services;
- and academic activities.
Although it is not necessary, an individual with official authority communicates with the Tax Agency on behalf of the overseas petitioner. If a person is appointed, a genuine written statement of permission needs to be sent to the relevant authorities.
Requirements for VAT registration
- At least one representative;
- A declaration that the trader is a taxable entity in the jurisdiction of incorporation.
- Proof of company establishment provided by the organization in charge of the international trader’s corporate headquarters;
- The details of the company’s shareholders or directors;
- details of goods and services provided by the firm or person; and
- A correct business address and contact information.
Authorization may also be given to a business agent. In this case, the petition must also include a declaration attesting to the actuality of representation and several economic advisor documents.
The Hungarian Levy and Revenue Agency can be approached by international business owners who want to set up a fixed headquarters in Hungary and file for value-added duty.
Businesses not obligated to register for VAT
Anyone or any business that does not reach the necessary level is exempt from the value-added taxation registration requirement. some companies do not need to apply because the products they sell are vat-exempt. These people or companies include:
- Public entities are not regarded as commercial enterprises.
- Judicial individuals who do not conduct themselves as businesses.
- Nonprofit organizations.
- Medical professionals in general and doctors.
Exempt firms may choose to register for value-added taxation even if it is not necessary. They may need the value-added duty id to conduct dealings with other companies outside the EU member states, such as recording optimal organizational purchases or undertaking intracommunity trades. When registering for VAT, exempt entities are required to disclose this information to the tax authorities.
Relationship between other taxes and VAT registration.
It is important to keep in mind that, depending on the circumstances, a foreign corporation may be subject to both VAT and corporate tax rates in Hungary. For instance, if it has a fixed place of business or possesses or utilizes real estate. In these circumstances, the business must apply as a corporate revenue levy subject. Accordingly, tax liabilities for value-added duty, corporate income duty, and other taxes must be determined separately in conformance with both Hungarian law and any applicable foreign agreement.
