Hungarian Zero Vat Invoices – Accountancy quick guide

VAT is short for value added tax, which is also known as sales tax in some countries. In Hungary, VAT is 27%, and whenever you buy something in a shop for example, it is always already added to the price you see, so you do not have to start counting each time how much something will cost. When you start your company in Hungary (which will immediately receive an EU VAT number as well), and issue your own invoices towards your clients, you will charge VAT only towards individual (retail) buyers or corporate EU-based buyers who are not registered for VAT. However, if you are an international trader, you may not charge VAT at all.

Zero VAT for international trade

Zero VAT invoices are invoices where you do not charge your buyers VAT. They can be issued in two cases:

1. when your buyer is a corporate entity outside the EU;
2. when the buyer is a non-Hungarian EU company with a valid EU VAT number.

In the latter case, it is your responsibility to check whether the buyer’s VAT number is valid, and to indicate this on the invoice. If your buyer is an individual (based anywhere in the world) or a Hungarian company, VAT must always be charged. There are some types of sales (e.g. real estate) that are not considered cross-border, and as such cannot be exempted from VAT.

If you do not know for sure whether you have to add VAT to your invoice or not, please always consult your accountant first. If you issue an unjustified zero VAT invoice, you will have to pay the VAT content of the invoice anyway, and it can be quite costly.

Ask for assistance from our accountancy department, or contact our office on +36.1.317.8570 or info@helpers.hu.

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