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What to know about VAT registration

WHAT TO KNOW ABOUT VAT REGISTRATION

| Wrote: Éva Szőke-Solymosi
WHAT TO KNOW ABOUT VAT REGISTRATION.
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WHAT TO KNOW ABOUT VAT REGISTRATION

Today, when more and more companies have international interests, it is increasingly required that in relation to certain transactions such companies must register with the tax authority of other countries, ask there a tax number to perform their activities.


Resulting from the above it’s worth checking what you need to know about VAT registration. 

A taxpayer that is not established in Hungary for economic purpose and is not a resident or does not have a habitual residence in Hungary, however, the taxpayer carries out taxable activities in Hungary and their tax liability cannot be settled by another taxpayer with reverse taxation, the taxpayer need to register in and request a tax number from the National Tax and Customs Administration of Hungary in connection with this taxable activity.

In case of companies established in non-EEA Member States, VAT registration can be opened only after opening a domestic bank account and appointing a financial representative.

It is important to emphasize that it will not result an establishment for economic purpose that is a seat, a fixed establishment for the company in the country of VAT registration. 

Normally registration is required before the start of the taxable activity in Hungary. However, it is also possible to register retroactively, if the company has already started its taxable activity in Hungary. In this case the input VAT arose prior to the registration is deductible, but there is a risk of a fine for late returns.

How is the registration going?

The company requiring VAT registration must submit the following documents both in the original and Hungarian languages:

  • an authentic Certificate of Incorporation (not older than 3 months, failing this, a notarized copy of the Articles of Incorporation)
  • certificate of residence (not older than 3 months)
  • specimen signature
  • a certified copy of passport

The person acting during the registration needs a power of attorney from the foreign company to be able to act on its behalf.

Upon registration, beside the above documents, T201 form must also be completed, for which the following information is required:

  • Company name
  • type of the company (legal form)
  • registered office of the company
  • Company tax number
  • TEÁOR (NACE) code and name
  • information of its memorandum (number, date)
  • Company registration number

The collected documents can be sent by mail or taken in person to the relevant Directorate of Taxes (Featured Tax and Customs Directorate-General of the National Tax and Customs Administration of Hungary). The tax authority prepares the tax number in two weeks, the validity on which starts from the day of submission. Beside a Hungarian tax number, a Community tax number can also be requested at the same time.

During the registration, the company must keep a record and prepare a return of its privities.

Documents required to the record:

  • outgoing invoices
  • the contracts underlying the invoices
  • in case of sales of goods transport documents, customs declarations and other documents which prove beyond any doubt the path of the goods and their handover (e.g.: handover protocol, customer acceptance statement, warehouse receipts, etc.)
  • incoming invoices
  • the contract underlying these invoices
  • stock records
  • certificate of performance in case of rendering or receiving of services
  • VAT analytics

The company shall submit a VAT return and make a summary declaration of its invoices issued in connection with its Hungarian activities and their VAT content to the tax authority as often as required by law.

The registration can be terminated upon request in case there is no debt on the tax current account. The termination date is the date indicated in the request form.

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