Your Hungarian company needs an EU VAT number in order to sell and acquire products or services within the EU without charging VAT on these sales.
When you set up a company in Hungary, you are immediately granted an EU VAT number without a special procedure, and you can start your activity right ahead. It can be retained as long as you keep compliant with regulations. No special renewal procedure is required.
It should be indicated on all invoices you issue, and on all invoices you get for your company purchases within the EU. It should also be included in all contracts you close with your EU partners and suppliers.
Your accountant regularly reports your activities to the Hungarian Tax Authority. Your EU VAT number is used for identifying your company. Learn more about VAT reporting here.
Your partners can also use your EU VAT number for identification when they go to the VAT validation page of the European Union and check whether you are eligible for issuing zero VAT invoices. (Before you accept a zero VAT invoice from one of your partners, you should also check there to see if they are eligible for issuing such invoices!)
Yes, you can lose your EU VAT number, but only if your Hungarian company does not comply with regulations. You can make sure that this will not happen by working close with your accountant, consulting them before your important business decisions, providing all necessary information and documents. Learn more about what kind of information you should regularly share with your accountant here.
If you are not compliant with regulations, your EU VAT number will be revoked. This means you will no longer be eligible to issue zero VAT invoices – so you MUST NOT do that. If you do so, you face severe penalties, and later you will have to pay VAT anyway – which will decrease your profit and creates a lot of extra work for your and your partner’s accountant.
However, once you have updated your accounting data (and you are again compliant, meaning that the infringement provoking the revocation has been cleared), you can reclaim it after paying a penalty. As reclamation might be lengthy, it is better not to let things escalate until your EU VAT number gets revoked.
If you have any questions, or you are not sure about any of the procedures, make sure you consult your Hungarian accountant. Remember, it is always easier to prevent any harm than to repair the damage. Call the Helpers office Monday through Friday 9 a.m. – 5 p.m. CET on +36-1-317-8570, or send us a letter to finance@helpers.hu.
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