Hungary SME rules

SME Scheme – General features

Exemption

It is possible to opt for the SME scheme in Hungary.

Transactions excluded from the SME scheme

The following transactions are excluded from the SME scheme: 

• Occasional transactions, like the supply before first occupation of a building or parts of a building or the supply of building land,
• Exempt cross-border supplies of new means of transport made from one Member State to another,
• supply of capital goods used for the purposes of the business of the taxable 
• supply of intangible goods 
• supply of new buildings (or part of them) and the land on which they stand (a building is new when it is supplied before the first occupation or the time elapsed between the first occupation and the supply does not exceed 2 years),
• supply of a building land, where it does not qualify as a capital goods of the business,
• intra-Community distance sale of goods where the place of supply is outside the domestic territory, distance sale of imported goods.
• in case of supplies of goods and services free of charge, where these supply should be treated as supplies against consideration,
• transfer of own goods to other MS, 
• supply of services, where the place of supply is outside of domestic territory,
• intra-Community acquisition of goods,
• importation of goods,
• cross-border transactions where the supplier is a non-established taxable person and the VAT Act provides for reverse charge to be applied.

National annual threshold

The information on the national annual threshold is available on TEDB.

Domestic SME scheme

Simplified VAT obligations

A small enterprise established in Hungary who applies the SME scheme in Hungary only (domestic SME scheme) is released from the following VAT obligations: 

• to submit periodical VAT returns if the taxable person does not have neither VAT payable nor VAT deductible, and to submit a recapitulative statement, if the taxable person does not have transaction that would fall under the obligation to include in the recapitulative statement.

Cross-border SME scheme

The cross-border SME scheme applies in the following situation(s):

1. The small enterprise applies the SME scheme in other Member States than the Member State of establishment, or;
2. The small enterprise applies the SME scheme both in the Member State of establishment and in other Member State(s).

Simplified VAT obligations

The VAT registration in each Member State where the small enterprise applies the SME scheme is replaced by a single prior notification to be submitted in the Member State of establishment. 

The periodical VAT returns are replaced by a single quarterly report for all Member States to be submitted in the Member State of establishment. 

Currency

The values of supplies of goods and services to indicate in the prior notification, in the update to a prior notification and in the quarterly reports must be in EUR. 

Way of submission

The prior notification, the update to a prior notification and the quarterly reports should be submitted by electronic means on this page.

Additional simplified VAT obligations

Small enterprises applying the domestic SME scheme only must fulfil the following VAT obligations:

• to issue invoices
• to keep accounts
• to submit administrative statements
• to submit periodical VAT returns if the taxable person has either VAT payable outside the scope of the SME scheme or has VAT deductible

Loss of simplified VAT obligations

Non-compliant small enterprises may be required: 

• to VAT register
• to submit periodical VAT returns

Transitional period

Hungary does not apply any transitional period in case the national annual threshold is exceeded during the current calendar year.

Practical examples of the application of the transitional period and its consequences are available in the Explanatory Notes.
 

Quarantine

Quarantine period in case of exclusion from the SME scheme

Small enterprises excluded from the SME scheme in Hungary are not able to benefit from that exemption during a quarantine period. 

You can consult the quarantine period applicable in Hungary on TEDB database.

Practical examples on the application of the quarantine period and its consequences are available in the Explanatory Notes.

Quarantine period in case of voluntary departure from the SME scheme

No quarantine period imposed in case of voluntary departure from the cross-border SME scheme.

Small enterprises who decide to voluntarily leave the SME scheme in Hungary are not able to benefit from that exemption during a quarantine period. You can consult the quarantine period applicable in Hungary on TEDB database. 

Appeals

Domestic SME scheme

Appeals should be addressed to your Member State of establishment (MSEST).

Cross-border SME scheme

Member State of establishment (MSEST)

Appeals related to the following topics should be addressed to MSEST:

• Union annual turnover
• Prior notification, correction and update to a prior notification
• Quarterly reports and correction of a quarterly report
• Exclusion for exceeding the Union annual turnover

Member State of exemption (MSEXE)

Appeals related to the following topics should be addressed to MSEXE:

• National annual turnover
• Denial to access the cross-border SME scheme in MSEXE
• Loss of simplified VAT obligations in respect of MSEXE
• Exclusion for exceeding the national annual threshold/sectoral threshold in MSEXE

Calendar

VAT simplified procedures

Not applicable