The stricter rules were originally intended to apply for the first time to VAT returns covering 1 July 2026. At the same time, the Hungarian Ministry of Finance indicated that the Hungarian government plans to submit a proposal to the Parliament to ensure that the stricter rules do not have to be applied in practice for any VAT return period.

Why did the change raise questions?

In recent months, we have participated in several professional consultations with NAV regarding the introduction of the M2M (Machine-to-Machine) VAT return solution. During these consultations, the question repeatedly arose as to what justified the tightening of the form M reporting requirements during a period when, according to current plans, VAT data reporting will already take place through an M2M connection or the e-VAT web interface from 1 January 2027.

This question was particularly relevant because the new VAT return solutions do not require the completion of the form M (as detailed invoice data are submitted through these systems anyway). Therefore, the reporting obligation introduced from 1 July 2026 would likely be relevant only on a temporary basis.

What did the NAV say during the consultations?

The response of the NAV was clear: as long as the applicable legislation prescribes a specific obligation, the Hungarian tax authority cannot act differently.

During the professional consultations, representatives of the tax authority emphasised that compliance with the effective statutory provisions is mandatory. Consequently, the question of applying the form M rules is fundamentally not a tax authority issue but a legislative matter.

The solution may come from the legislative side

Based on the statement of the Hungarian Ministry of Finance that has now been published, it appears that this issue has also reached the legislative agenda. According to the statement, the government’s objective is to ensure that the stricter rules do not have to be applied in practice during any VAT return period.

If the Hungarian Parliament adopts the planned amendment, businesses in Hungary will be able to continue fulfilling the form M reporting obligation applicable to invoice recipients in the same way as before, without having to apply the stricter rules introduced from 1 July 2026.

What should businesses monitor in the upcoming period?

At present, the statement of the Hungarian Ministry of Finance reports on a planned legislative amendment. Accordingly, businesses should continue to monitor legislative developments and official communications issued by the NAV to ensure they are informed of the final rules in a timely manner.

The tax advisers of WTS Klient Hungary continuously monitor the legislative process surrounding the digitalisation of VAT returns and can provide clients with the most up-to-date answers to questions arising in this area. In addition, the experts of our Digital Solutions business line, who have extensive experience in both IT development and taxation, are ready to assist you with the transition to the Hungarian e-VAT system and preparations for the implementation of M2M VAT reporting. Contact us today to benefit from expert support from the very beginning of the process.

A Form M: Is the six-month administrative burden set to be reversed? bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

A contradictory and intricate area

Recent CJEU case-law clearly illustrates the complexity of the VAT treatment of transfer pricing corrections:

• In C‑726/23 Arcomet-case, the Court concluded that, subject to certain conditions, even adjustments intended to ensure a guaranteed profit margin may fall within the scope of VAT.
• By contrast, the Advocate General’s Opinion in C‑603/24 Stellantis-case emphasises that profit sharing, in itself, cannot be regarded as consideration for a service.

The common message is that the VAT treatment of transfer pricing adjustments cannot be handled mechanically: the decisive factors are always the economic substance of the legal relationship and the contractual structure.

How to account for year-end transfer pricing adjustments

In Hungary, retrospective transfer price adjustments may be carried out in several ways:

• by amending invoices retroactively,
• by adjusting consideration through an accounting document, or
• by making a corporate income tax base adjustment only.

The chosen technique is not merely an administrative formality; it also affects the precise point within the arm’s length range to which the adjustment must be made.

A recent modification of the Hungarian legal framework introduced a more favourable interpretation: applying the median is no longer automatically required when the adjustment is made via an accounting document. At the same time, the timing of the adjustment has become more stringent: from 2025 onwards it must be performed no later than the balance sheet preparation date.

Applying the arm’s length principle is relevant not only for corporate income tax but also for other income-type taxes, which further increases the importance of appropriate documentation.

A new approach to transfer pricing adjustments and indirect taxes

The key difficulty in the VAT treatment of transfer pricing adjustments is that corporate income tax and VAT follow fundamentally different logic. While the former is designed to allocate profits, VAT taxes the consideration for specific economic supplies. Earlier professional approaches presumed that a VAT correction could arise primarily where a direct link existed between the adjustment and a specific transaction. However, Member State practices may differ, resulting in enhanced interpretative and compliance risks for companies.

The Arcomet-judgment: rethinking the concept of consideration

One of the core messages of the Arcomet-case is that profit‑based pricing mechanisms do not automatically exclude tax obligation. Where the contract specifies particular services and the pricing mechanism is clear and mandatory, the balancing payment may become part of the consideration for the service. At the same time, the Court reaffirmed that the existence of tax liability requires an objective and direct link between the supply and the payment, to be assessed in light of all relevant circumstances.

The judgment also highlights the practical conditions of exercising the right to deduct VAT. This right is not automatic: the tax authority may request further evidence proving that the service was actually supplied and served the taxable activity of the taxpayer. This makes the following documents indispensable, particularly for intra‑group services:

• detailed contractual background,
• performance confirmations,
• internal reports,
• cost allocation calculations.

The Stellantis-case: the need to move beyond a purely case-by-case approach

The Stellantis-case shows that the economic substance of the arrangement is decisive in determining the VAT treatment of transfer pricing adjustments. In the model examined, intra-group purchases were made at a predefined reference price, and at year‑end a retrospective adjustment was carried out based on actual costs and a target profit margin. The legal dispute centred on whether these balancing payments modified the taxable amount of previous supplies or should instead be viewed as financial settlements intended to ensure group‑level profitability.

The lesson of the case is that price corrections refining the consideration for the original transactions must be distinguished from adjustments serving a profit reallocation function. The former may trigger a VAT base modification, while the latter typically fall outside the scope of VAT.

For proper classification, the level of detail in the contractual pricing mechanism and the degree to which the adjustment is linked to specific supplies are determining. This requires companies to design their documentation and invoicing practices consciously.

Transfer pricing adjustments and customs valuation

Transfer pricing adjustments may also be relevant for customs valuation. According to the latest direction in EU case-law, profit‑driven adjustments may affect customs obligations even without modifying the price of specific transactions, creating additional compliance and administrative burdens for companies.

In light of recent CJEU decisions, a comprehensive review of corporate groups’ current transfer pricing and invoicing practices may be warranted. Coordinated management of corporate income tax and VAT requirements, clear contractual definition of pricing mechanisms, and detailed documentation of supplies have become essential to mitigate risks – especially given the increasing scrutiny of the authorities. Should you require professional support regarding the VAT treatment of transfer pricing adjustments, the transfer pricing advisers of WTS Klient Hungary are ready to assist.

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What was the case about?

A Croatian company sold timber to another EU Member State. The company acted as many businesses typically do in everyday operations: based on invoices, transport documents and customer confirmations, it applied the VAT exemption for intra‑Community supply.

However, the Croatian tax authority rejected the VAT exemption. According to its reasoning, the submitted documents did not fully comply with the proof requirements listed in Article 45a of Implementing Regulation 282/2011/EU (the so-called Quick Fixes) – even though the authority itself fully acknowledged that the goods had actually left Croatia.

The Croatian court initiated a preliminary ruling procedure to clarify whether the VAT exemption may be denied solely because the taxpayer does not rely on the documents explicitly listed in the regulation to prove the dispatch of goods to another Member State.

Essence of the Court’s decision

1. The evidence under Article 45a is not exclusive

The Court stated that Article 45a of the Implementing Regulation is not exhaustive. It creates a presumption regarding the dispatch of goods to another Member State, but it does not restrict the taxpayer from relying on other types of evidence to prove the reality of the EU cross‑border supply of goods.

2. The tax authority may not automatically deny the exemption

The Court emphasised that VAT exemption cannot be denied solely on formal grounds if the transaction was in fact an intra‑Community supply. The tax authority must assess all relevant evidence, even if such evidence is not listed in Article 45a.

3. Proportionality of the burden of proof and protection of taxpayers

The Court reaffirmed that the tax authority may only deny the exemption if objective circumstances show that the taxpayer abused the rules or if the transaction did not take place. The evidentiary requirements must remain proportionate and must not impose an unreasonable burden on the taxpayer.

Why is this CJEU decision important in practice?

• More flexible evidentiary framework: The decision ends the rigid, formalistic approach where authorities denied VAT exemption even when the goods had undeniably left the Member State.

• Obligations of tax authorities: National authorities must now examine a broader set of evidence, not only the prescribed list.

• Positive precedent for businesses: Particularly in commercial practice – where shipments cannot always be documented strictly according to the Regulation – taxpayers now have more flexible opportunities to prove the VAT exemption of an intra‑Community supply.

The conflict between the current practice of the Hungarian tax authority and the CJEU’s interpretation

The Hungarian tax authority often ties the application of VAT exemption for an intra‑Community supply strictly to the presence of the documents listed in Article 45a, even if the transaction has clearly taken place. In many cases the Hungarian tax authority does not accept alternative evidence at all and automatically assesses a VAT difference due to deficiencies in the Quick Fixes documentation.

The Flo Veneer judgment sends a clear message: the evidentiary system is flexible, and the actual fulfilment of the transaction prevails. The decision aligns with the CJEU’s consistent case law, according to which economic reality is paramount in the application of VAT exemptions, and formal requirements may not override actual transactions. This significantly enhances legal certainty in the field of intra‑Community supply, including for Hungarian businesses.

The Hungarian tax authority will need to adapt its practice accordingly, which requires a substantial shift in mindset and audit methodology: instead of focusing on formal errors, economic reality must be examined. Once this happens, the Hungarian tax authority is expected to place greater emphasis on risk analysis and the verification of actual fulfilment, since it must accept a wider range of documents such as bank transfers, customer delivery confirmations, warehouse dispatch documents, and even GPS data. This could create a more predictable environment for businesses operating in Hungary.

What do we recommend?

• Documentation should continue to be organised and consistent.
• Companies involved in intra‑Community supply should retain all evidence supporting the dispatch of goods.
• Businesses should review their contracts with transporters and their internal procedures.

If you need expert support regarding the VAT processes of your intra‑Community supply, the VAT advisers of WTS Klient Hungary are ready to assist you with reviewing internal procedures, designing documentation systems or preparing for Hungarian tax authority audits. Feel free to contact us and request a proposal!

This article provides general information and does not constitute advice.

A Exemption of intra‑Community supply from VAT 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.

In our article we have summarised the key 2026 tax amendments in Hungary, grouped by tax type.

Personal income tax and social security

PIT exemption for mothers

A new PIT exemption has been introduced for mothers with two or three children. The incentive applies to biological and adoptive mothers who are entitled to family allowance or were entitled to it for at least 12 years.

• Income covered: income included in the consolidated tax base (e.g. employment income). However, the exemption does not extend to income from rental activities or capital income.

• How to claim: by indicating it in the family allowance declaration and through continuous advance tax declaration.

• Social contribution relief: if the PIT base is insufficient, the benefit can also be claimed as a family contribution allowance.

For mothers with three children, the exemption applies to income earned after 30 September 2025. For mothers with two children, the eligibility will be phased in gradually between 2026 and 2029 based on age brackets.

Other tax base allowances

• With the introduction of a new tax base allowance, infant care benefit (csed), child care benefit (gyed) and adoption benefit will also become tax‑exempt.

• The allowance for mothers under 30 can be claimed without an upper limit.

• The amount of the family tax allowance increased in two steps: from 1 July 2025 and from 1 January 2026.

Additional PIT changes

• For crypto asset transactions, the time limit of the tax equalisation rule is removed, meaning losses older than two years can also be recognised.

• SZÉP card spending rules change: between 1 December 2025 and 30 April 2026 it can be used for cold food purchases, but from 2026 it can no longer be used for home renovation. Previously, SZÉP cards could be used for building materials, furniture or household goods – this will no longer be allowed.

• The 2026 tax amendments broaden the range of tax‑free benefits: family allowance, accommodation provided by the Hungarian branch of foreign companies, private use of electric bicycles, and bank compensation for phishing damages all become tax‑exempt.

• In the flat‑rate taxation, the 40% cost ratio increases in two steps.

Social security changes

• For sole proprietors and partnerships, the minimum contribution base is reduced from 112.5% to 100% of the minimum wage (or guaranteed minimum wage). For corporate members, this also affects the small business tax (KIVA) base.

• A new social security status is introduced: permanent contract work. As a result, social security and social contribution tax liability arises on the contractual fee, but at least 30% of the minimum wage.

• For foreign assignments, the national average gross wage increased to HUF 715,765 as the contribution base.

• The health service contribution rises to HUF 12,300 per month from 2026.

• Administrative changes: introduction of the Complex Employment Relationship Register and the e‑Social Security booklet.

• A new social contribution tax liability applies to payments made to pensioners drawing a direct pension claiming PIT allowances, if total income exceeds certain limits.

Digitalisation

As of 31 December 2026, the Hungarian Tax Authority (NAV) will phase out the General Form Completion Program (ÁNYK), initiating the mandatory transition to data‑driven platforms.

Alternatives to replace ÁNYK include:

• Online Form Completion Application (ONYA) and the e‑VAT web interface for private individuals, SMEs and taxpayers with few transactions;

• M2M solutions for taxpayers with complex structures and large transaction volumes.

As part of the 2026 Hungarian tax amendments, Identification Based Document Authentication (AVDH) will also be discontinued and replaced by User Assignment to Document Service (FEDOR).

Value added tax

Thresholds and rates

• The threshold for VAT exemption for small taxpayers will increase gradually: HUF 20 million from 2026, HUF 22 million from 2027, and HUF 24 million from 2028.

• The VAT rate on beef and related offal will drop from 27% to 5% from 2026.

• The reduced 5% VAT rate on new residential properties will remain available in 2026. Under the transitional rules, the reduced rate also applies to advances received and supplies completed after 31 December 2026 if the building permit becomes final by the end of 2026 or construction has been notified by then.

Reporting and invoicing rules

• The domestic summary report must include the amount of VAT actually deductible at invoice level. E‑VAT users are exempt from this obligation.

• As part of the 2026 tax amendments, new data fields are added to the online invoice data reporting: in case of legal succession or VAT groups, the tax numbers of the predecessor and group members must also be reported.

• E‑invoicing became mandatory for electricity, natural gas and water utility providers. In these cases, e‑archiving rules require particular attention – including on the invoice recipient’s side.

Other VAT changes

• VAT groups: the establishment of VAT groups is simplified, with automatic representative appointment if the previous representative ceases.

• The transition to e‑cash registers must be completed by 1 July 2028; until then, online cash registers remain allowed. From 1 September 2026, receipt data reporting becomes mandatory: manually issued receipts must be reported within three days on a daily basis, while e‑receipts require real‑time reporting since 1 July 2025.

• Reverse charge rules will apply to domestic natural gas transactions between Hungarian VAT‑registered traders.

• From 1 October 2025, customs representatives must issue a declaration on the assigned right to deduct VAT in VAT returns.

• Travel service providers no longer need to indicate the tax base and transferred tax on invoices (except for online reporting).

Corporate income tax, KIVA and global minimum tax

Corporate income tax

• R&D tax base allowance for R&D activities carried out jointly with higher education institutions, the Hungarian Academy of Sciences or other research institutions increases from HUF 50 million to HUF 150 million.

• The upper limit for the R&D tax allowance in such cases becomes 25/50/100% of costs depending on development type, up to HUF 500 million per year. The time limit also changes: the selected tax credit option can be modified after five years instead of six.

• New environmental investment tax incentives and new development tax incentives for clean technologies are introduced.

• The threshold for determining monthly or quarterly CIT advance payment frequency increases from HUF 5 million to HUF 20 million.

• The 2026 tax amendments clarify rules on preferential asset transfers: partial fulfilment of shareholding requirements results in partial tax liability, and civil law demergers now also qualify as preferential asset transfers.

• Rules for reported shares become applicable to cross‑border transformations.

• For micro‑businesses, the balance sheet total threshold increases from HUF 150 million to HUF 180 million, and the annual net revenue threshold rises from HUF 300 million to HUF 360 million.

• The employment tax base allowance for micro‑enterprises increases.

Public CbCR

Multinational groups with consolidated revenue above EUR 750 million are obliged to prepare public country‑by‑country reports. The first publication relates to the 2025 financial year and is due in 2026.

Small business tax (KIVA)

KIVA changes mainly involve doubling the entry and exit thresholds (headcount and revenue), significantly expanding eligibility. Electronic money assets are removed from the definition of cash, meaning their changes no longer affect the KIVA base.

Global minimum tax (GloBE)

• The GloBE registration deadline has been extended to 28 February 2026.

• Default penalty for non‑compliance with GIR reporting can reach HUF 10 million.

• 2026 tax amendments refine transitional and permanent safe harbour rules; further details are expected.

Transfer pricing changes

The new regulation of the Hungarian Ministry for National Economy aims for closer alignment with the OECD Guidelines. It applies from 2026, but some rules for local files may apply to 2025.

• Master file: no master file required if total net value of controlled transactions subject to local file requirements does not exceed HUF 500 million. This exemption applies from 2026.

• Local file: threshold increases to HUF 150 million.

• Documentation requirements become stricter for cost recharges and free transfers of funds.

• Documentation content is modified to align with data reporting requirements.

• Benefit test: taxpayers must demonstrate that the service is fully necessary for their business and that they would be willing to pay an unrelated party under similar terms.

• Voluntary year‑end transfer pricing adjustments: any value within the arm’s length range may be selected; median adjustments are no longer mandatory.

The new decree contains further detailed rules on intangibles, industry analysis, method and margin selection, database research, simplified documentation and low value‑adding services.

Tax procedure

The 2026 tax amendments include several procedural changes to increase audit efficiency, enhance digital processes and strengthen enforcement.

• Audit deadlines for chain transactions are extended (up to 365 days for reliable taxpayers).

• Fees increase for advance tax rulings and APA procedures.

• From 2026, instead of self‑revision, claims based on unconstitutionality, EU law breaches or municipal law violations must be submitted through a separate request.

• Automatic decision‑making is introduced for certain case types.

• VAT and social contribution filing delays exceeding 90 days will result in automatic tax number deletion; stricter penalties apply for e‑cash register non‑compliance.

• Removal from negative lists (e.g. list of employers with unreported employees) may be requested once a year under certain conditions, with payment of a penalty.

• Automatic payment relief will be available for higher thresholds for reliable taxpayers and for both individuals and legal entities.

Other tax changes

• For retail tax, exemption thresholds and tax brackets increase. These apply retroactively to 2025, allowing refund claims on advances and tax differences. Online platforms are also subject to retail tax from 2025.

• Rules for certain special taxes change: financial institutions face higher tax rates; energy suppliers’ profit tax rate decreases to 31% from 2026, with new investment incentives available.

• The advertising tax returns from 1 July 2026.

• EPR fees increased significantly in 2025.

• CBAM payment obligations become effective in 2026; affected taxpayers must register immediately.

• Loans forgiven by owners in liquidation become exempt from duties if the procedure ends with company court deletion. Suspended duty on plots for residential construction can be cancelled more easily upon proof of occupancy.

• Renewable energy investments: land for solar or wind power plants may receive partial exemption from transfer duty.

• Rules on replacement purchases are amended favourably.

• Excise tax indexation date moves to 1 July.

• Inflation‑indexed increases apply to vehicle tax, company car tax and vehicle transfer duty.

The 2026 tax amendments in Hungary are highly complex and introduce numerous new administrative and compliance obligations for taxpayers. To fully understand and comply with the rules outlined above, we recommend seeking professional assistance. The tax consulting team of WTS Klient Hungary is at your disposal.

This article provides general information and does not constitute advice.

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With the phase-out of the General Form Completion Program (ÁNYK) and NAV’s new digital transformation plan, these solutions are no longer optional. The use of the e-VAT system is expected to become mandatory soon, meaning every company must undergo the digital transformation. Since this requires thorough preparation, waiting until the last minute is not advisable. Which solution is optimal for your business, and how should you prepare? Our article explores these questions.

The e-VAT system

End of October 2025, NAV announced that as of 1 January 2027, the widely used ÁNYK program will be discontinued for VAT return submissions in Hungary. After this phase-out, VAT returns can only be filed through the e-VAT system.

Compared to traditional form filling (similar to the previously introduced e-PIT system), e-VAT offers several advantages:

• NAV performs validation on submitted or approved data.
• Significantly less administration and data collection.
• Eliminates manual errors.
• Provides more accurate data to the tax authority.

However, unlike the e-PIT system, e-VAT returns do not become automatically accepted after the deadline – they must always be explicitly approved.

The e-VAT web interface: ideal for smaller businesses

Within the e-VAT system, the web interface is the optimal solution for smaller companies with fewer transactions because it is quick and simple. Similar to e-PIT, NAV generates a VAT return draft based on available data (online invoices, cash registers, customs data, master data). The taxpayer can approve the draft, add missing items (e.g., intra-community acquisitions) and modify details (e.g., decide whether to exercise the deduction right immediately or later for incoming invoices – NAV cannot determine this from its data).

Advantages of filing VAT returns via the web interface:

• Much less administration and manual work compared to ÁNYK form filling.
• Requires less preparation than M2M VAT return via machine-to-machine interface. Drafts are already available online – no development or transition time needed.

M2M VAT return: the choice for larger enterprises

For companies with high volumes of complex transactions, submitting VAT return data via a machine-to-machine interface – M2M VAT return – is the right solution. In their case, reviewing the web-based draft can be time-consuming and may lack critical data (e.g., intra-community acquisitions or services), as NAV does not have this information.

A well-developed M2M solution automates VAT returns in a tailored way, integrating all necessary data for a complete VAT return, including cross-border transactions. To do this, you need to prepare VAT analytics based on a predefined structure compile and then generate an XML file and submit it to the tax authority. The NAV validates the data and creates a draft return, which is sent back for approval. The taxpayer can still modify or supplement the draft before acceptance.

Implementing M2M VAT return and related costs

Before switching to M2M VAT return, companies must assess their current VAT reporting processes. Key questions include:

• How many accounting, ERP, and invoicing systems are in use?
• Which data comes from which system?
• How are incoming data sets consolidated?
• Are transactions coded with the correct VAT codes?

To build the required XML structure, you need accurate data, keys, authorizations, and technical key integration. VAT codes must be aligned with NAV’s coding, then develop the program to create XML packages, establish API connections, and set up automation. This implementation process can take one to two weeks for smaller companies and up to one to two months for larger companies, and of course, it involves costs. The costs are as follows:

• Initial costs: Process assessment, consulting fees, and IT development (internal or external). Each company requires a customised solution for data integration.
  
• Ongoing costs: Monthly fees are much lower, typically covering licenses and maintenance.
  
• Future updates: If NAV changes XML schemas or releases new versions, the M2M solution must be updated – these incur additional costs.

The entire filing process can be automated through machine-to-machine communication, so although it may be time-consuming and require process assessment and development initially, it can yield significant savings in the long term.

M2M VAT return and tax audits

NAV’s long-term goal is to automate tax processes as much as possible. To encourage adoption, the tax authority offers a 15-day penalty-free self-revision window for M2M VAT returns. This means that when the NAV finds any discrepancies while validating the data received, i.e., comparing it with its own data, it allows a 15-day period for interest-free self-revision. The tax authority cannot audit the returns submitted by reliable taxpayers via M2M connection for 15 days from the due date, meaning that taxpayers can correct their VAT data without legal consequences or costs.

When should you start?

Most companies are understandably cost-sensitive and only invest in expensive developments when absolutely necessary – usually when required by law. However, implementing the M2M VAT return system early offers several advantages:

• Cost optimisation: Every step towards automation reduces time and administration in the long term, allowing colleagues involved in preparing tax returns to spend their time on truly useful, high value-added work rather than unnecessary and time-consuming data browsing. In addition, due to the changing legal environment, i.e., with the approaching mandatory implementation of e-VAT, interest in M2M VAT solutions is expected to increase, and prices may rise as demand increases.

• Avoid time pressure: NAV provides time and testing opportunities for companies to prepare. A test environment is already available, so experimenting now is wise before deadlines become tight.

• Error prevention: Testing helps identify common issues (e.g., incomplete data such as missing addresses or tax IDs, incorrect XML structure, wrong VAT coding). Implementing internal validation before submission ensures errors are caught early, reducing risks and delays.

The experienced tax and IT experts of WTS Klient Hungary can assist you in transitioning to the e-VAT system and preparing for M2M VAT return implementation. Our own M2M VAT solution can be tailored to your company’s unique needs. Don’t wait until the last minute – start planning now and secure expert support for a smooth transition!

This article provides general information and does not constitute advice.

A M2M VAT return: New dimension of VAT digitalisation in Hungary bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Why will ÁNYK program be phased out?

The ÁNYK framework has served taxpayers in Hungary for nearly two decades. Its introduction marked the first digitalisation milestone of the Hungarian tax authority, enabling electronic completion and submission of tax returns and various administrative forms. However, the software has become outdated and faces significant limitations:

• Automation constraints: While submitting VAT return through the ÁNYK program can be automated, NAV’s growing demand for detailed data – such as invoice-level reporting via M and K sheets and detailed advance payment disclosures – requires constant updates and interventions, even in automated systems.

• Data collection challenges: The ÁNYK program relies solely on taxpayer-provided data, while the expanded requirements of the tax authority can no longer be met with a database extracted from an ERP system. Companies must now consolidate data from multiple systems to ensure complete reporting. As a result, many businesses spend days preparing VAT returns and reconciling accounting data with online invoice records to avoid future tax authority inquiries.

What will replace the ÁNYK program?

After the ÁNYK framework is phased out, the Hungarian tax authority will exclusively collect tax returns and forms through the following electronic platforms:

• ONYA (Online Form Completion Application) – launched in 2018, currently supports over 150 forms, including the return form for excise tax and QDMTT advance tax.
• e-PIT – introduced in 2017 for personal income tax returns.
• e-VAT – operational since 2024 for VAT return submissions.
• M2M (machine-to-machine) solution – launched last year, now at version 3.0, enabling advanced automation for large-scale data submissions.

Phase-out timeline of the ÁNYK program

The detailed roadmap of the tax authority outlines the following steps in Hungary’s digital tax transformation:

• 30 October 2025 – Technical guidelines were published to support transition.
• 31 January 2026 – Sample programs will be released.
• February 2026 – Technical templates and near-final versions of selected forms will be published.
• 31 May 2026 – XSD format and rule sets will be released; ONYA active forms will be available for testing.
• 30 June 2026 – M2M 4.0 test environment goes live.
• 31 August 2026 – Live data submission begins via M2M 4.0.
• 1 January 2027 – Submissions in the ÁNYK program will officially be discontinued.

Although the ONYA interface already operates in parallel with the ÁNYK program, its current forms have not appeared on the ÁNYK interface. If everything goes according to plan, the two systems will be usable also for the same returns in parallel during the transition period from June to December 2026.

Risks and preparation for the digital transition

The shift from ÁNYK to new platforms introduces significant changes for businesses, requiring careful preparation to mitigate risks:

• Technical integration: The ONYA interface works optimally only with updated browsers (Edge 85+, Firefox 70+, Chrome 77+). Outdated versions may cause disruptions. Initial launch may involve technical glitches or slowdowns, similar to previous online systems like online invoice data reporting or EKAER.

• Human factors: The ONYA interface differs significantly from the ÁNYK program, making staff training essential. ERP and accounting system integration will also pose challenges, as software previously supporting only ÁNYK will need updates or redevelopment.

This transition is not just technical – it requires organisational and process-level readiness. Companies should start updates, testing, and training well in advance.

Beyond ONYA

As highlighted during the National Tax Consultation, “phasing out the ÁNYK program opens the door to full digital transformation.” The ONYA application will remain the manual web-based tool for form submissions, but VAT returns will no longer be filed through ONYA after 1 January 2027. Businesses must use either e-VAT or the fully automated M2M system, which enables machine-to-machine data exchange – especially beneficial for large companies with complex transactions.

At WTS Klient Hungary, our experts combine IT knowledge and tax expertise to guide clients through this transition and VAT automation. Our own M2M solution is ideal for companies handling high transaction volumes, minimising manual errors and time loss. If you would like to be among the first to leverage Hungary’s digital tax transformation, contact us to learn how M2M can benefit your business!

This article provides general information and does not constitute advice.

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Corporate income tax

Development tax incentive: new opportunities to support clean technologies

The second 2025 autumn tax package introduces a new development tax incentive for investments aimed at increasing manufacturing capacity for clean technologies. Key features of the development tax incentive:

• Available in connection with commissioning and operation.
• For rural investments, support may reach up to 35% (maximum EUR 350 million), while for developments in Budapest, up to 15% (maximum EUR 150 million).
• Granted only for investments that, without state aid, would be implemented outside the EEA.
• Existing notifications may be amended to change the legal basis.
• Can be combined with cash subsidies, subject to the above intensity limits.

With the introduction of this new category, development tax incentives for investments considered strategic for the transition to a net-zero economy will be discontinued.

New tax incentive for environmental investments

From 1 January 2026, a new corporate tax incentive will apply to environmental investments with a present value of at least HUF 100 million. Depending on the purpose of the investment, the incentive may cover 100% of eligible costs (for damage mitigation and rehabilitation), or 70% of eligible costs (for other ecological developments) but capped at the HUF equivalent of EUR 30 million. SMEs may apply higher rates in certain cases.

Simplification of corporate tax advance payments

To reduce administrative burdens, from 2026 the threshold for corporate tax advance payments will increase from HUF 5 million to HUF 20 million, allowing more SMEs to switch to quarterly payments. For calendar-year taxpayers, this affects the advance payment period declared in the annual return submitted by 31 May 2026 for the 2025 tax year. The transition from monthly to quarterly payments may start in July 2026. The last quarterly advance must be paid by the 20^th day of the third month of the quarter (typically 20 December).

Robin Hood tax

New investment tax incentive

From 2026, a new investment allowance for energy-related developments will be introduced under the Robin Hood tax. Key features:

• Applicable in the tax year of commissioning and the following five years.
• Deductible up to 80% of the payable tax.
• Maximum amount: 50% of the difference between acquisition cost and adjusted depreciation.
• Requires an investment incentive certificate.
• Subject to a five-year maintenance obligation.

Small business tax (KIVA)

Expanded eligibility

From 1 December 2025, entry thresholds for small business tax (Hungarian abbreviation: KIVA) will double: average statistical headcount will increase from 50 to 100 employees, revenue and balance sheet total from HUF 3 billion to HUF 6 billion. These figures must include related companies at entry. Exit thresholds will also double, allowing more medium-sized businesses to remain under this regime.

Retail tax

Lower tax burden

As part of the second 2025 autumn tax package, retail tax brackets will change from 2025. Retailers will be exempt up to HUF 1 billion taxable base (previously HUF 500 million).

• Upper limit for the 0.15% rate: from HUF 30 billion to HUF 50 billion.
• Upper limit for the 1% rate: from HUF 100 billion to HUF 150 billion.
• The highest 4.5% rate applies only above HUF 150 billion.

Fuel retailers remain unaffected. These changes reduce tax burdens for small businesses, especially those with revenue below HUF 1 billion. If the amount of advance payments due and paid in 2025 exceeds the expected tax base for 2025 and the tax payable calculated according to the new tax brackets, it will be possible to reclaim the difference as early as 2025.

Advertising tax returns

From 1 July 2026, advertising tax will return in Hungary. Non-compliance may result in severe penalties. Failure to submit notifications or declarations repeatedly may incur fines up to HUF 10 million, failure to file returns may trigger tax audits, with tax assessed by estimation. Strict compliance with legal requirements is therefore essential.

Increasing bank tax, reduced relief

For credit institutions and financial enterprises, the special tax rate will rise to 10% on the portion of the tax base up to HUF 20 billion and to 30% on the portion exceeding this limit. Relief for increasing holdings of HUF-denominated (non-retail) government securities remains available for 2026, but at a reduced rate (30%).

Changes affecting SMEs

Higher VAT exemption threshold

To reduce administrative burdens, the annual revenue threshold for VAT exemption will increase in three steps:

• From 1 January 2026 to HUF 20 million.
• From 1 January 2027 to HUF 22 million.
• From 1 January 2028 to HUF 24 million.

Flat-rate taxpayers: more savings for small businesses

From 2026, the cost ratio for flat-rate individual entrepreneurs will rise in two steps:

• First to 45%, then
• from 2027 to 50%.

Social contribution tax and administrative relief for sole proprietors and partnerships

For full-time sole proprietors and partnerships, the minimum monthly base for the social contribution tax currently differs from the social security contribution base due to a 112.5% multiplier. To ensure unified treatment of the social contribution tax and social security contributions, this multiplier will be abolished from 1 January 2026. Going forward, the base for the social contribution tax will equal 100% of the minimum wage (or guaranteed minimum wage), just like the social security contribution base. For partnerships, this change may also positively affect the KIVA tax base.

Another amendment in the second 2025 autumn tax package is that, starting in 2026, not only sole proprietors applying flat-rate taxation but also those taxed under the entrepreneurial income regime will be required to file social security obligations quarterly.

Excise tax

Deferred indexing

The new tax changes postpone the 2026 indexing of excise tax rates on fuels (gasoline, diesel, kerosene) by six months, until 1 July 2026. This delay provides additional time for the market to adapt to changing conditions.

In this article, we have tried to provide a thorough summary of the most important parts of the second 2025 autumn tax package that affect companies’ decision makers. If you have any questions about the changes detailed here, please contact the tax consulting team of WTS Klient Hungary who are always at your disposal.

This article provides general information and does not constitute advice.

A Second 2025 autumn tax package in Hungary 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.

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.