Frameworks beyond the GBER

Against this backdrop, targeted frameworks such as the Clean Industrial State Aid Framework (CISAF) and the Middle East Crisis Temporary State Aid Framework (METSAF) should be understood. These instruments do not replace the general state aid rules, including GBER. Instead, they complement them and provide additional room for Member States to pursue specific economic policy objectives.

The two frameworks perform different functions within this multi-layered regulatory environment. While CISAF primarily supports investments related to the green industrial transition and long-term competitiveness, METSAF is a temporary instrument specifically designed to address an acute economic shock. What they have in common is that both enable targeted, rapid and situation-specific interventions while remaining integrated into the existing state aid architecture.

CISAF: A framework for supporting the green industrial transition

CISAF was adopted by the European Commission on 25 June 2025 as the state aid pillar of the Clean Industrial Deal. Its primary objective is to enable Member States to support green transition investments quickly and at scale while safeguarding the integrity of the Single Market.

The framework covers several key areas:

• deployment of renewable energy and clean energy systems,
• industrial decarbonisation, particularly in energy-intensive sectors,
• expansion of clean technology manufacturing capacities,
• electricity cost compensation and competitiveness support.

One of the most significant innovations of CISAF is the substantial relaxation of state aid approval requirements, particularly in sectors where European industry faces increasing global competitive pressure, such as from the U.S. Inflation Reduction Act (IRA) or Chinese industrial policy. In practice, the EU is moving from a largely reactive competition-control model towards a more proactive industrial policy financing approach.

The framework will remain in force until the end of 2030, creating a stable and predictable environment for long-term investments.

METSAF: A rapid response to a geopolitical shock

Unlike CISAF, METSAF is a classic crisis-management instrument introduced by the European Commission on 29 April 2026 to mitigate the economic consequences of the Middle East crisis.

The immediate rationale behind the framework was that the conflict led to:

• higher energy prices,
• rising fuel and fertiliser costs,
• significant cost shocks affecting businesses across the real economy.

Accordingly, the purpose of METSAF is not structural transformation but the rapid management of liquidity constraints and cost-side pressures. The main target sectors include:

• agriculture and food production,
• fisheries,
• transport and logistics,
• energy-intensive manufacturing industries.

The framework provides several specific instruments, including:

• compensation of up to 70% of increased input costs,
• simplified aid schemes (e.g. up to EUR 50,000),
• higher aid intensities for electricity-related support.

An important feature of METSAF is its temporary nature. It is applicable only until 31 December 2026, clearly reflecting its emergency and short-term character.

The integrated logic of the two frameworks

METSAF explicitly builds on CISAF in several respects and even modifies certain elements of it. For example, it allows for increased aid intensities under specific CISAF measures, particularly in the field of energy price compensation.

What does this mean at Member State level?

It is important to underline that the entry into force of CISAF and METSAF does not automatically result in the introduction of new aid schemes in the Member States. Rather, these frameworks create regulatory and policy opportunities, enabling governments to design and implement relevant support programmes within the conditions defined by the frameworks and in line with their own priorities and budgetary capacities.

For companies to gain actual access to these instruments, Member States must take an active role. They must decide which elements of CISAF and/or METSAF they intend to apply and develop the specific aid programmes operating under these frameworks. Consequently, practical availability and the volume of support will largely depend on national-level implementation. In this respect, the recently formed Hungarian government may already take these instruments into account when reconsidering the future direction of state aid policy.

The professionals at Strategic Advisory, State Aid and Incentives business line of WTS Klient Hungary are at your disposal should you require expert assistance regarding state aid opportunities available to your company.

Feel free to contact us.

A METSAF and CISAF in the EU State Aid System bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

The introduction of the new EU customs duty is driven by fiscal, competition law, consumer protection, and administrative considerations. In addition, the current exemption threshold has encouraged abusive practices such as undervaluation and artificial splitting of consignments, while effective enforcement by authorities has become practically impossible.

Steps in introducing the new EU customs duty

1. Transitional flat-rate duty from July 2026

Under the new EU rules, the customs duty exemption for import consignments below EUR 150 will be replaced by a transitional flat-rate duty of EUR 3 between 1 July 2026 and 1 July 2028. This transitional charge applies to goods arriving via courier, commercial, and postal channels alike.The EUR 3 duty is not charged per parcel, but per product category within the consignment, following the logic of tariff subheadings. The amount is included in the VAT base, which increases VAT liabilities. Businesses will therefore need to adopt new methods for calculating the import VAT base.

2. Handling fee from November 2026

From November 2026, an EU-wide handling fee is expected to be introduced for low-value consignments. Some Member States (e.g. Romania, Italy, France) have already implemented similar national fees.

3. Tariff-based duties from July 2028

Following the planned launch of the EU Customs Data Hub in July 2028, the transitional flat-rate duty will be replaced by standard EU customs duties based on tariff classification, supplemented by a uniform EU handling fee.

Why is the new regulation necessary?

The dismantling of the de minimis threshold and the introduction of the new EU customs duty were made inevitable by the explosive growth of low-value e-commerce imports. According to the European Commission:

• In 2022: 1.39 billion consignments
• By the end of 2025: approximately 5.9 billion consignments
• In 2025: 97.9% of all imported items fell into this category, while accounting for only 2.1% of total import value

93% of these goods originated from China.

Another major driver of the stricter regulation is product compliance risk:

• more than half of electronic products did not comply with EU standards
• 84% of tested samples were found to be unsafe
• non-compliance rates: cosmetics 65%, PPE 60%, food supplements 63%

The abolition of the customs exemption is therefore not only a revenue measure, but also a market surveillance response.

Scope of the EUR 3 transitional duty

The new EU customs duty of EUR 3 per item mainly affects businesses using the EU’s special VAT scheme, the Import One Stop Shop (IOSS). This system allows importers to declare and pay the VAT on non-excise goods valued at up to EUR 150 imported from third countries through a single Member State.

In practice, the affected parties primarily include:

• non-EU online retailers, digital marketplaces and platforms using IOSS
• IOSS-registered traders
• indirect representatives of IOSS-registered traders
• logistics providers handling customs clearance

Given that such low-value transactions conducted via IOSS represent a significant share of EU e-commerce imports, the changes directly impact the largest market players.

Although the precise legal scope of goods covered by the new EU customs duty is still subject to legislative clarification, it is already clear that it will primarily apply to consignments related to online sales. The concept of distance selling under VAT rules will likely serve as the main reference point.

What does this mean for customs procedures?

Although the provisions are not yet final, the draft legislative amendment already addresses technical and administrative changes to customs procedures, particularly regarding customs declarations:

Reduced data set H7 customs declaration

• limited to e-commerce B2C distance sales transactions
• remains applicable for goods with an intrinsic value not exceeding EUR 150, regardless of IOSS usage or whether postal or express procedures are applied
• not applicable to goods subject to prohibitions and restrictions (P&R)

Full data set H1 customs declaration

• mandatory for all non-distance sales transactions (typically B2B)
• mandatory for all goods subject to P&R

The H1 procedure continues to apply standard customs duties and existing valuation rules, including preferential tariffs based on international agreements. However, in distance sales scenarios, the H1 procedure does not exempt goods from the EUR 3 flat-rate customs duty.

Technical and system-level changes

The regulation also introduces significant technical clarifications. It defines the concept of an “item” as one or more goods sharing the same tariff classification, description and, where applicable, origin. This is crucial, as the EUR 3 duty is calculated based on these units.

Furthermore, the coding system will also change: for example, the F53 additional procedure code will be introduced, which is specifically linked to e-commerce, while certain existing codes – such as C07, indicating customs duty exemption – will be phased out. In addition, new TARIC document and reference codes (such as C127, C128, C129, and Y081), as well as a new preference code element, will be introduced for the calculation of the EUR 3 new EU customs duty under the H1 procedure.

The introduction of the new EU customs duty means that businesses must not only revise their IT and customs systems, but also review contractual structures, pricing models and IOSS processes. They must prepare separately for the transitional period between 2026 and 2028 and the subsequent standard tariff environment. If you need expert support, our customs advisers are ready to assist.

A New EU customs duty in e-commerce from 1 July 2026 bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

The Public CbCR

Public CbCR is a public, country-by-country report containing the tax and financial information of multinational corporate groups. These companies have already provided similar data to tax authorities (CbCR), but until now, the data provided has been used exclusively for the internal control and risk analysis purposes of the tax authorities. Public CbCR, on the other hand, is a public document.

Who is subject to the reporting obligation?

The Public CbCR must be prepared and published by companies and groups of companies whose consolidated revenue exceeds EUR 750 million (HUF 275 billion in Hungary) in two consecutive financial years. In the case of a corporate group, the obligation generally falls onthe ultimate parent entity. However, if the ultimate parent entity is not subject to EU jurisdiction, EU-based subsidiaries and branches may also become obliged. This means that a Hungarian subsidiary may become directly subject to the obligation if it has a non-EU parent company and the group’s consolidated revenue reaches the EUR 750 million threshold – even if such an obligation does not exist in the parent company’s country of residence.

What must the Public CbCR include?

The report must present, on a country-by-country basis, among others, the name of the company, the currency used, the revenues, the profit or loss before tax, the corporate income tax paid and accrued, the retained earnings, the number of employees, the list of group entities and the description of main business activities. The report must be prepared using a standard template provided by the European Commission and submitted in a machine-readable format.

Which Public CbCR reporting deadline applies to whom?

The obligation applies for the first time to financial years starting on or after 22 June 2024. Accordingly, for companies with a calendar financial year, the first affected year ends on 31 December 2025. Based on this, the Public CbCR reporting deadline is as follows:

• for parent companies: 30 June 2026
• for standalone entities: 31 May 2026

The report must be made publicly available on the company’s website for at least five years.

Who is responsible?

The auditor is required to verify whether the report has been prepared and whether it complies with legal requirements. If the obliged company fails to file or publish the report, it may face consequences under the Hungarian Accounting Act. The executive officers and members of the supervisory board bear joint responsibility for compliance.

Steps to take before the Public CbCR reporting deadline

1. Identifying the obligated entities: Within the group, it must be identified which entity is obligated. If the ultimate parent entity is located outside the EU, the obligation of the Hungarian subsidiary may arise – considering the EUR 750 million consolidated revenue threshold.

2. Coordination with the parent company: In the case of a Hungarian subsidiary or branch of a third-country parent company, data requests must be initiated in time. The subsidiary or branch is required to prepare the report based on the data available to it even if the parent company does not cooperate. In such cases, the Public CbCR must be supplemented with a statement indicating that the ultimate parent entity did not provide the necessary information.

3. Assessing data sources: The report is typically compiled from the consolidated financial statements, internal CbCR reporting and local corporate income tax returns. These data sources recommended to be checked now for consistency and availability.

4. Preparation for reputational risks: After the Public CbCR reporting deadline, the data will be publicly accessible. Investors, business partners and the media will analyse how reported profits in each country compare to the corporate income tax actually paid.

5. Ensuring publication: The report must be prepared in a machine-readable format and made available on the company’s website for at least five years.

The tax consulting team of WTS Klient Hungary has more than two decades of experience in supporting the tax affairs of international corporate groups, including cross-border tax planning and structuring, taking into account EU regulations, bilateral tax treaties and the specific features of the Hungarian tax environment. If the Public CbCR reporting deadline affects you as well, and you need assistance in interpreting or fulfilling the obligation, please contact us with confidence.

A The first Public CbCR reporting deadline is approaching! bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Over the years, the GBER has become increasingly essential for EU‑level economic development, as it ensures the following benefits:

• Speed: Member States can launch programmes rapidly without waiting for ex‑ante Commission authorisation.

• Predictability: The regulation clearly defines which types of aid and conditions apply automatically, enabling both managing authorities and beneficiaries to anticipate requirements.

• Legal certainty: Aid granted under the General Block Exemption Regulation is presumed lawful, minimising the risk of the Commission later determining the measure to be unlawful state aid.

In 2026, the European Commission proposed the most extensive revision of the General Block Exemption Regulation to date. The public consultation runs until 23 April 2026, and the new framework is expected to enter into force in January 2027. Through this reform, the EU aims to create a framework that is simultaneously:

• faster and more flexible,
• better aligned with the green and digital transitions,
• supportive of broader social and regional objectives,
• while continuing to safeguard fair competition.

Easier implementation, reduced administrative burden

One of the primary goals of the proposed amendments is to reduce administrative burdens for both aid‑granting authorities and applicants. This includes encouraging broader use of simplified cost options, which significantly ease documentation requirements.

These simplified methods include:

• lump sums,
• unit costs, and
• flat‑rate financing.

The draft proposal would also eliminate the mandatory evaluation plans required for large‑budget aid schemes – an obligation that previously consumed substantial resources. This measure would enable faster programme launch and more efficient implementation.

Aid could also become easier to grant for smaller‑scale projects. In certain areas – such as R&D or environmental projects – higher aid intensities may become available regardless of company size. Higher aid intensities reduce the required private contribution, thereby improving access to funding.

This is particularly advantageous in sectors where projects require high upfront investment or where innovation involves significant risk – areas in which many companies have so far been excluded due to the high level of own financing previously required.

Prioritising the green and digital transitions

The reform of the General Block Exemption Regulation – fully aligned with EU strategic objectives – puts an increased emphasis on climate neutrality and technological progress.

The new rules would:

• simplify the framework for environmental and energy‑related aid, and
• significantly expand the range of support available for renewable energy, energy efficiency and decarbonisation.

For operating aid in renewable energy schemes, the proposal would abolish the current EUR 300 million annual programme cap, enabling Member States to launch substantially larger schemes. This is particularly relevant given the rapid expansion of green energy investments. The maximum aid per beneficiary would, however, remain in place to prevent distortions of competition.

Digitalisation appears as an independent aid category under the revised regulation. The new measure supporting digital transition for SMEs and small mid‑cap companies reflects the EU’s recognition that technological upgrading is essential for competition, innovation and economic dynamism across the European internal market. Digitalisation‑related investments – such as automation, cybersecurity or digital infrastructure – would become eligible more easily and rapidly.

Strengthening social and regional objectives

The proposed amendments support not only economic growth, innovation and climate neutrality, but also social cohesion.

As part of this:

• a completely new category – aid for social enterprises – would be introduced, offering favourable conditions for public‑benefit activities;
• to address the housing crisis, the Commission would allow higher aid intensities for energy‑efficiency renovations of social and affordable housing.

From a regional perspective, a key development is that agriculture, fisheries and aquaculture would fall more broadly under the scope of the new General Block Exemption Regulation, enabling regional investment aid to be granted even for primary agricultural producers. This would significantly contribute to the economic development of rural areas.

Owing to the ongoing transformation of the labour market, the proposal places strong emphasis on training and reskilling, especially in digital, technological and STEM competences. This responds both to labour shortages and to the growing need for new skills – while also acting as a prerequisite for a successful green and digital transition.

The significance of the reform

The comprehensive reform of the General Block Exemption Regulation represents a strategic turning point in EU state aid policy. The framework expected in 2027 is not a mere technical adjustment; it is a broad‑based modernisation that will shape EU state aid policy for the next decade. Consequently, once implemented, it may significantly transform the state aid framework based on Individual Government Decisions (EKD) in Hungary.

The objective of the amendments of the General Block Exemption Regulation is to ensure that the aid environment can respond more flexibly to rapidly evolving technological, environmental and market challenges, while strengthening competitiveness and Member State autonomy. As the reform requires companies to rethink their approach to investment‑related aid in the long term, we recommend seeking expert support. The Strategic Advisory, State Aid and Incentives business line of WTS Klient Hungary is ready to assist you. Please feel free to contact us!

This article provides general information and does not constitute advice.

A Renewal of the General Block Exemption Regulation bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

At first glance, international chain transactions may appear straightforward: the goods leave the seller and arrive at the customer. But what happens if the transport route does not follow the logic of the sales chain?

In this article, we present a chain transaction where – due to the place of supply being in Hungary – a third‑country company becomes subject to VAT registration in Hungary, even though the goods do not physically remain in Hungary. As a result, the foreign sale could easily (but sometimes incorrectly) be considered VAT‑exempt export.

Our specific example helps explain when and why VAT registration in case of chain transactions becomes necessary, and how non‑compliance with Hungarian VAT regulations can be avoided.

Why may VAT registration be required in general?

Similarly to EU‑established companies, third‑country (i.e. non‑EU) businesses may also be required to register for VAT in Hungary in certain situations. The most common cases include when the company:

• moves its own goods to Hungary,
• sells goods to Hungarian customers, or
• ships goods from a warehouse rented in Hungary.

However, since the obligation to register for VAT depends on an economic presence in Hungary and the existence of taxable transactions , there are situations where the sale does not take place in Hungary and the goods immediately leave the country, yet Hungarian VAT registration and ongoing VAT compliance obligations still arise. An international chain transaction is one such scenario.

Not only an obligation, but also an opportunity

Although failure to comply may result in tax penalties, late payment interest and other legal consequences, VAT registration is not only essential from a compliance perspective. A VAT‑registered entity is also entitled to deduct input VAT on its purchases, while registration ensures transparency of economic activity at the Hungarian tax authority.

Let us now examine VAT registration in case of a chain transaction through a concrete example.

Chain transaction involving a Hungarian seller and two third‑country partners

A non‑EU (third‑country) company (“Party B”) has products manufactured by its Hungarian business partner (“Party A”). Upon completion of production, the goods are not delivered to the ordering party but are shipped directly to the United States to the final customer (“Party C”), which is a US company, also established in a third country. It is important to note that the transport is organised and ordered by the final customer (“Party C”).

Since the essence of chain transactions is that the goods are transported from the first seller to the final customer in a single shipment, while ownership is transferred multiple times, the above arrangement qualifies as a chain transaction. Three parties (A ➝ B ➝ C) participate in consecutive supplies, while the goods are physically transported only once, directly from A to C.

Which supply qualifies as VAT‑exempt export?

Under Hungarian VAT rules – particularly Sections 26 and 89 of Act CXXVII of 2007 on Value Added Tax – only one supply in a chain transaction can be linked to the transport. This is the so‑called “moving supply”, which may qualify as VAT‑exempt export. The remaining supplies qualify as “non‑moving supplies” and are taxable in the relevant country.

The party organising the transport determines which supply in the chain qualifies as the moving supply. In the present case, the transport is attributable to Party C and to the supply where Party C acts as the purchaser. Accordingly:

• The VAT‑exempt export supply is the B ➝ C transaction, where a third‑country company sells the goods to the UScustomer.

• The A ➝ B supply is performed in Hungary and qualifies as a domestic taxable transaction, since the goods are dispatched from Hungary directly to the United States, but the transport (i.e. the VAT‑exempt export) is not attributable to this supply.

Consequence: obligation to register for VAT in Hungary

In the A ➝ B transaction, Company A must issue a VAT invoice for the sale of goods, applying Hungarian VAT at the standard rate (generally 27%). In other words, reverse charge does not apply, and normal VAT taxation is required. As a result, third‑country Company B makes a domestic taxable acquisition of goods in Hungary. Based on this, VAT registration in Hungary in case of the chain transaction becomes mandatory for Party B. This also means that, in addition to applying for a Hungarian VAT number, the company must appoint a fiscal representative.

Why is a fiscal representative required?

If a non‑EU company is required to register for VAT in Hungary, Hungarian legislation allows this exclusively through fiscal representation. The company must appoint a fiscal representative established in Hungary and holding the appropriate authorisation, who:

• represents the company before the Hungarian tax authority,
• submits the required VAT returns,
• shares joint and several liability for the tax obligations in Hungary, and
• ensures compliance with applicable legislation.

The fiscal representative bears responsibility for the fulfilment of tax obligations and represents the third‑country company in all Hungarian tax matters at the Hungarian tax authority. This regulatory framework serves the security and transparency of the Hungarian tax system and provides safeguards for the tax authority regarding compliance.

The fiscal representative not only provides technical assistance but also legal and tax security for the foreign company. Choosing the right representative is therefore not merely a compliance obligation, but also a strategic business decision.

As demonstrated in this article, in a chain transaction the party organising the transport plays a decisive role in determining which supply qualifies as export and which constitutes a taxable domestic supply. Precise knowledge of logistical details, particularly in international transactions, is therefore critical for effective tax planning. With decades of experience, the tax advisers of WTS Klient Hungary not only assist in identifying the parties involved even in complex chain transactions, but also provide reliable fiscal representation for third‑country companies and support VAT registration in case of chain transactions. Feel free to contact us with confidence.

This article is for general information purposes only and should not be considered as advice.

A VAT registration in case of chain transactions bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

What is Public CbCR?

Public CbCR is a public, country-by-country report containing the tax and financial information of multinational corporate groups. These companies have already provided similar data to tax authorities (CbCR), but until now, the data provided has been used exclusively for the internal control and risk analysis purposes of the tax authorities. Public CbCR, on the other hand, is a public document.

Who is subject to Public CbCR?

The reporting and disclosure obligation applies to companies and corporate groups with consolidated annual revenues exceeding EUR 750 million for two consecutive financial years. As a general rule, the ultimate parent company is responsible for submitting the report. However, if the parent company is not governed by EU law, then any EU-based subsidiaries or branches must also comply and publish the report themselves.

What must be included?

The Public CbCR must disclose, on a country-by-country basis, the following information:

• name of the ultimate parent undertaking or standalone entity
• relevant financial year and the currency used
• revenues generated
• profit or loss before tax
• corporate income tax paid
• corporate income tax accrued
• retained earnings
• number of employees
• list of group entities
• description of main business activities

The report must be prepared using a standard template provided by the European Commission and submitted in a machine-readable format. Alternatively, companies may use the structure defined in the existing CbCR guidance used for tax authority submissions.

When must it be published?

The EU Public CbCR Directive was published in December 2021 and implemented into Hungarian law in May 2023. The first financial years subject to the obligation are those starting on or after 22 June 2024.

The report must be prepared and published together with the annual or consolidated financial statements and made publicly available on the company’s website for at least five years. The relevant publication deadlines are:

• For parent companies: by the last day of the sixth month following the balance sheet date
• For standalone entities: by the last day of the fifth month following the balance sheet date

For companies with a regular calendar fiscal year, the end of the first reportable year will be 31 December 2025, and the reporting deadline:

• for parent companies: 30 June 2026
• for standalone entities: 31 May 2026

Who reviews the report and who is responsible?

The company’s statutory auditor is required to verify whether the report has been prepared and complies with legal requirements. Failure to publish or file the report may result in consequences under the Hungarian Act on Accounting. Responsibility for compliance lies jointly with the company’s executive officers and members of the supervisory board.

Why is this important for companies?

The EU’s goal with Public CbCR is to improve transparency in corporate tax practices – beyond tax authorities – to the public at large. Enhanced transparency is also a matter of corporate reputation. Publicly disclosed data can influence investor decisions, shape consumer perception, and impact public trust. Companies within scope should take steps now to ensure compliance for the 2025 financial year, including reviewing internal data collection, financial systems, and communication strategies.

The tax consulting team at WTS Klient Hungary has over two decades of experience supporting international corporate groups with cross-border tax planning and structuring. We provide tailored solutions that take into account EU regulations, bilateral tax treaties, and specific provisions of the Hungarian tax system. If you need assistance interpreting or complying with Public CbCR requirements, don’t hesitate to contact us.

This article is for general information purposes only and should not be considered as advice.

A Public CbCR: A new era in corporate tax transparency bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

When a third-country company, i.e. a business based outside the EU, brings goods into Hungary through its own supply chain, this involves more than just logistics: it raises significant tax and VAT-related questions. Delivering products to a warehouse in Hungary and selling them via local retail chains creates VAT registration obligations that many foreign businesses only discover after the fact.

When is VAT registration required in Hungary for non-EU companies?

Just like companies based in the EU, non-EU companies are also required to register for VAT in Hungary in certain cases. This includes, for example, if a non-EU company:

• sells products to Hungarian customers,
• delivers goods from a rented warehouse located in Hungary, or
• imports products into Hungary and sells them there.

The obligation to register does not depend on the company’s registered seat, but rather on:

• its economic presence in Hungary, and
• whether a Hungarian VAT liability arises.

If the company carries out activities in Hungary that trigger VAT obligations, it must:

• register for VAT in Hungary,
• submit regular VAT returns, and
• pay the VAT due to the Hungarian tax authority.

VAT registration in Hungary is not only a matter of legal compliance. It also allows the company to deduct input VAT on local purchases, helping to optimise financial processes while staying in line with local regulations. Furthermore, it ensures transparency of economic activity for Hungarian authorities. Failure to register can result in tax penalties, late payment interest, and other legal consequences.

Let’s look at a specific example!

Self-managed supply chain into Hungary

A third-country company sells products – manufactured outside the EU – through a European retail chain, including stores in Hungary. The goods are first imported into a non-Hungarian EU warehouse, where customs clearance takes place. From there, the company transfers the goods to the Hungarian warehouse of the retail chain (with retention of title), and the products are ultimately sold: first to the retail chain, then to end customers in stores.

In this case, the company’s activity in Hungary starts with the intra-EU transfer of goods. Since the goods are moved into Hungary through the company’s own logistics, the transaction qualifies as an intra-Community acquisition for Hungarian VAT purposes.

Under Section 142 of the Hungarian VAT Act (Act CXXVII of 2007):

• the purchaser of the goods is liable for the VAT,
• but also entitled to deduct the VAT paid,
• so the transaction must be declared in the VAT return as both payable and deductible VAT.

Selling goods to Hungarian customers

The goods are then sold in Hungary to the retail chain, therefore the transaction generates Hungarian VAT liability. It means that the company requires a Hungarian tax number, must submit regular VAT returns and needs VAT registration in Hungary. Further justification for Hungarian VAT registration arises from the fact that the company performs economic activity in Hungary by moving goods into a local (non-owned) warehouse and subsequently selling them.

This example clearly shows that even without a physical presence (e.g. a legal entity or office), sales activity can still trigger tax obligations in Hungary if the goods are moved to and sold from a Hungarian warehouse. Therefore, VAT registration is not merely a formal step but a crucial compliance requirement for lawful operations.

The role of a fiscal representative

Importantly, if a non-EU company is required to register for VAT in Hungary, it can only do so through a fiscal representative, as required by Hungarian law. This means the company must appoint a licensed fiscal representative, registered in Hungary, who will:

• handle communications with the Hungarian tax authority,
• file VAT returns,
• fulfill VAT payment obligations, and
• ensure full legal compliance.

The fiscal representative is liable for fulfilling tax obligations and represents the non-EU company in all Hungarian tax-related matters. This structure enhances the security and transparency of the Hungarian tax system and offers guarantees to the tax authority.

A fiscal representative is not just an administrative intermediary – they serve as the company’s official face before the tax authority in Hungary. Selecting the right representative is therefore a strategic decision that can have long-term impacts on the company’s operations in Hungary.

With a strong international background and in-depth local expertise, WTS offers reliable fiscal representation tailored to the specific needs of third-country companies. We understand that fiscal representation is a matter of responsibility and trust, and our English-speaking tax advisers are happy to answer any questions you may have.

This article is for general information purposes only and should not be considered as advice.

A From warehouse to store: Selling goods in Hungary from a third country bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

The global minimum tax (Pillar 2) has been one of the most pressing topics for tax and financial professionals, as well as executives of multinational corporations, across the European Union for several years now. This is largely due to the ongoing evolution of regulations related to this tax regime. As a result of changes in EU legislation, several amendments and clarifications have recently been proposed in Hungary as well. The latest developments concern global data exchange and the application of transitional CbCR safe harbour rules under the Pillar 2 framework.

The next step in centralised data reporting: global data exchange

One of the key elements of the latest Hungarian legislative proposal related to Pillar 2 is the introduction of centralised data reporting for Hungarian constituent entities, significantly reducing their administrative burden. The first step in centralised data reporting was the DAC9 Directive, adopted by the European Union in spring. Hungary is in the process of implementing this directive, likely as part of the upcoming autumn tax package.

The new proposal of the Hungarian government prepares the groundwork for data exchange with non-EU jurisdictions. In practice, this means that if a GloBE Information Return (GIR) is filed in a country that has signed a GIR MCAA (Multilateral Competent Authority Agreement) with Hungary, then there will be no need to file the same return again in Hungary. Annex 1 of the draft legislation lists the relevant jurisdictions, including Canada, Japan, the United Kingdom, and Australia, with which Hungary plans to establish such data exchange agreements.

Technical clarifications in the 2025 autumn tax package

In addition to the anticipated implementation of the DAC9 Directive, the 2025 autumn tax package in Hungary will also include several technical and interpretative clarifications concerning the transitional CbCR safe harbour rules set out in the Hungarian 2023 Act LXXXIV on the Global Minimum Tax (Act on GMT).

The two most significant technical clarifications under the Pillar 2 legislation are as follows:

• Refinement of the definition of simplified covered taxes: Taxes that are not reported as income taxes in financial statements will not be eligible as simplified covered taxes. In the Hungarian context, this may affect the local business tax, which – depending on the accounting standards applied – is not classified as an income tax (e.g., under Hungarian accounting rules). While this clarification could already be inferred from the OECD’s background materials, it will now be explicitly incorporated into Hungarian legislation.

• Establishing fixed percentages for substance-based income exclusion: These percentages will support uniform legal interpretation among Hungarian taxpayers and reduce uncertainty in the application of the Pillar 2 rules.

Filing the Qualified Domestic Minimum Top-up Tax (QDMTT) advance return

Hungarian constituent entities subject to the global minimum tax must submit their QDMTT advance return for the 2024 tax year by 20 November 2025. If an advance payment obligation arises, the tax liability must also be paid at the time of filing. It is essential to keep this deadline in mind, as failure to submit the return may result in a penalty of up to HUF 10 million.

UPDATE! Draft QDMTT advance tax return released

To support taxpayers’ preparation, the Hungarian tax authority has published the draft version of the advance tax return for the Qualified Domestic Minimum Top-up Tax (QDMTT), the 24GLBADO form. Apart from the draft tax return form, the filling instruction and a supporting document in XML format to assist in electronic submission have also been released. The return will be filed through the ONYA online platform (Hungarian online document management webpage), and – as expected – must be submitted even if the taxpayer has no advance payment obligation.

Taxpayers will have limited time to interpret and complete the QDMTT advance return. At WTS Klient Hungary, our tax advisors are happy to assist you with this return or any other questions related to Pillar 2 compliance. As part of our comprehensive tax planning and advisory services, we not only explain the relevant rules in detail but also develop tailor-made, optimal solutions for your business. Feel free to contact us!

This article provides general information and does not constitute advice.

A Global minimum tax: tax advance payment return and payment deadline approaching bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Why Is the Pay Transparency Directive necessary?

According to the to the reasoning of the directive, women in the EU earn on average 13% less than their male counterparts. That gender pay gap has largely stagnated over the past decade. This disparity is not only unjust but also distorts economic efficiency. The directive’s core objective is to increase pay transparency, thereby reducing unjustified gender pay gaps.

What are employers’ obligations under the Pay Transparency Directive?

The directive imposes significant new responsibilities on employers, including:

• Mandatory pay gap reporting: One of the directive’s central elements is the obligation to report on gender pay differences. Companies will be required to regularly disclose gender pay gap data, depending on their size. If a pay gap of more than 5% exists within the same role and cannot be justified by objective, gender-neutral criteria, employers must conduct a pay assessment and develop an action plan to reduce the gap. Importantly, “pay” includes not only base salary but also bonuses, allowances, benefits in kind, and even study leave entitlements.

• Transparency in recruitment: Employers will be required to inform job applicants of the pay range for the advertised position during the selection process. At the same time, it will be prohibited to ask candidates about their current or past salary.

• Pay transparency in internal communication: Employers must clearly communicate the criteria used to determine pay levels and progression. Employees will have the right to request information on how their salary compares to the average pay of colleagues performing equal or equivalent work. Perhaps most significantly, employers will no longer be allowed to prohibit employees from disclosing their own pay – a major cultural shift in many workplaces.

Strengthened enforcement and legal protections

The directive also introduces enhanced legal remedies for employees. Workers may be represented by external organisations in legal proceedings, and the burden of proof in pay discrimination cases will shift to the employer.

If gender-based pay discrimination is established, the directive mandates full compensation, covering both material and non-material damages. Member States will also be required to implement dissuasive penalties to ensure compliance.

How can employers prepare?

Compliance is not only a legal requirement but a strategic opportunity. Organisations also in Hungary should begin by evaluating their current practices: What would a role-by-role, gender-based pay analysis reveal? Do they have quantifiable data on all types of compensation, including bonuses and benefits?

To ensure compliance, employers may need to:

• review and revise job classification systems,
• formalise salary determination procedures,
• redesign recruitment and other HR processes.

They should also prepare to handle internal and external reporting duties, update employee communications, and review contracts and internal policies. Legal alignment with forthcoming national legislation will be critical.

The Pay Transparency Directive as an opportunity

While the directive certainly imposes new administrative and operational burdens, it also offers a unique opportunity to build a more equitable, transparent, and competitive workplace culture – one that can be a key advantage in today’s labour market. Early preparation is essential. The earlier employers begin, the smoother the transition will be.

The experienced teams at WTS Klient Hungary and WTS Legal Hungary offer comprehensive support in all payroll, HR, and labour law matters related to the Pay Transparency Directive. If you need expert assistance, please don’t hesitate to contact us.

This article provides general information and does not constitute advice.

A EU Pay Transparency Directive bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

If your company is registered outside the European Union – such as in Asia, North America, or other non-EU countries – and you plan to sell goods, import products, or provide services in Hungary or to EU customers from Hungary, your first and most crucial step is to appoint a fiscal representative in Hungary.

Why is fiscal representation mandatory in Hungary?

Under Hungarian VAT law, fiscal representation is not only advisable but legally required for businesses without a permanent establishment or branch in Hungary that carry out VAT-liable activities within the country. Without a fiscal representative, your company cannot legally sell, import, or provide services in Hungary or from Hungary to other EU Member States.

How can WTS support you as your fiscal representative in Hungary?

WTS provides comprehensive fiscal representation in Hungary, ensuring full compliance with local VAT obligations on your behalf:

• VAT registration in Hungary
• ongoing tax advisory to ensure compliant and optimised operations
• preparation and submission of VAT returns
• management of tax payments
• direct communication with the Hungarian authorities
• full representation at the Hungarian authorities

Legal requirements for fiscal representatives from 2025

Did you know? Starting 1 January 2025, only companies meeting the following criteria are allowed to act as fiscal representatives in Hungary:

• must be incorporated as a private limited company (Kft.) or a public/private limited liability company (Zrt.)
• must have a minimum registered capital of HUF 150 million, or be able to provide an equivalent bank guarantee
• must not have any outstanding public debt registered with the Hungarian tax authority (NAV)

WTS FRS Ltd. (fiscalrep.hu) is an officially registered fiscal representative in Hungary. We support companies based in:

• Asia (including China and Japan)
• North America (especially the USA and Canada)
• non-EU countries in Europe, such as the United Kingdom, Switzerland, and Norway

Our services enable smooth and compliant business operations in Hungary for companies outside the EU.

With a strong international background and in-depth local expertise, WTS offers reliable fiscal representation tailored to the specific needs of third-country companies. We understand that fiscal representation is a matter of responsibility and trust, and our English-speaking tax advisers are happy to answer any questions you may have.

This article is for general information purposes only and should not be considered as advice.

A Fiscal representation in Hungary for non-EU businesses bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.