Hungary VAT Registration (Foreign Company)
If you run a foreign company doing business in Hungary, sooner or later you will hit the question of Hungary VAT registration. Hungarian VAT — ÁFA — has a 27% standard rate (the highest in the EU), and registration is mandatory in more situations than many founders expect. This guide explains when you must register, how to get an EU VAT number, and the 20,000,000 HUF small-business exemption.
What is ÁFA and what are the rates?
ÁFA (általános forgalmi adó) is Hungary’s value-added tax. The rates are:
| Rate | Applies to |
|---|---|
| 27% (standard) | Most goods and services — the EU’s highest standard rate |
| 18% (reduced) | E.g. certain foodstuffs, hotel accommodation |
| 5% (reduced) | E.g. books, certain medicines, new residential housing |
When is VAT registration required?
A new Hungarian company (Kft) generally registers for a tax number — which includes its VAT status — as part of incorporation. Beyond that, VAT registration is typically required when, for example:
- you make taxable supplies in Hungary above the exemption threshold;
- you carry out intra-EU acquisitions or supplies of goods;
- you provide or receive certain cross-border services where Hungary is the place of supply;
- you import goods or run distance sales / e-commerce into Hungary above the relevant EU thresholds.
A foreign (non-established) company without a Hungarian entity may still need to register for VAT in Hungary if it makes taxable supplies here — registration is about the activity, not only about having a local company.
The EU VAT number
Once registered, your company receives a Hungarian VAT number. To trade across the EU, you generally also need a community (EU) VAT number and to be listed in VIES, the EU’s VAT number validation system. This is what lets you issue and receive zero-rated intra-community B2B invoices. We arrange the EU VAT number and VIES listing as part of setup where your activity needs it.
The small-business exemption (alanyi mentesség)
Hungary has a subjective VAT exemption — alanyi adómentesség — for small businesses. From 2026 the threshold is 20,000,000 HUF of annual revenue (raised from 18M). Under it, you do not charge VAT on your sales, but you also cannot reclaim input VAT.
Whether this is a good idea depends on your business:
- it can suit small, domestic, B2C sellers who want simplicity and have little input VAT;
- it is usually not right if you have significant input VAT to reclaim, sell B2B across the EU, or expect to grow past 20M HUF.
Once you exceed 20,000,000 HUF, the exemption ends and you must charge ÁFA at the normal rates.
How registration works for a non-resident
For a Hungarian Kft, VAT registration is handled through the company’s tax number at incorporation, and we set the correct VAT status (standard, exempt, or with an EU number) based on your activity. For a foreign company registering directly, the process runs through NAV. Either way, after registration you have ongoing obligations: periodic VAT returns, real-time invoice reporting (Online Számla), and EU sales/acquisition reporting where relevant — all of which we manage in English.
FAQ
What is the Hungarian VAT rate? The standard ÁFA rate is 27% (the EU’s highest), with reduced rates of 18% and 5% for specific goods and services.
Does my new Kft automatically get a VAT number? A Hungarian Kft gets a tax number at incorporation that establishes its VAT status; an EU VAT number is added where cross-border activity requires it.
What is the VAT exemption threshold? Alanyi adómentesség applies up to 20,000,000 HUF of annual revenue from 2026; under it you neither charge nor reclaim VAT.
Can a foreign company without a Hungarian entity register for VAT? Yes — if it makes taxable supplies in Hungary, a non-established foreign company may be required to register for Hungarian VAT.