What is a VAT report in Hungary and how does it work?
Your accountant will regularly file VAT reports to the authorities, in which your (EU) VAT number will be indicated as well as the VAT payable and VAT reclaimable. The frequency of VAT reports depends on your trade volume or activity.
What kind of information does my accountant need?
Your accountant is filing VAT reports to the Hungarian Tax Authority monthly or quarterly, based on the volume of activity of your Hungarian company. (In the first 12 months, VAT is reported monthly anyway.) As a result, all incoming and outgoing invoices should be sent to your accountant so they can prepare the VAT report in due time. You can learn more about reclaiming VAT here.
Even if your Hungarian company did not do any business in a given period, you should still be in contact with your accountant and let them know. No activity is just as important a piece of information as a long and detailed list.
Whether you did business with companies within or outside the EU (with companies who do/not have an EU VAT number), you should still send all relevant material (mainly invoices, shipping documents or CMRs, warehouse documents, expense reports) to your accountant. They should be included in the VAT report even if no VAT was charged.
When are invoices included in the VAT report?
Hungarian invoices should feature specific data, including the company name, company seat, and (EU) VAT number. Hungarian invoices should also feature three dates:
- when the product is delivered,
- when the invoice itself is issued,
- when payment is due.
For the purposes of VAT reporting, “delivery date” is considered.
Example: if you report VAT monthly and the delivery date of an invoice is at the end of a given month, VAT should be paid to the Hungarian Tax Authority for that given month – even if payment is due only later.
As a result, you should always consider the time of delivery you and your partners indicate on your invoices, and make sure you have enough funds allocated to paying VAT to the authorities on time.
Sounds difficult?
When you operate a company – either in Hungary or anywhere else in the world – you have to consider many factors in order to make the company profitable and compliant to regulations. However, your accountant is by your side to help you keep your operation transparent and your company compliant to regulations.
Moreover, with management accounting, your accountant may help you prepare forecasts, and make informed decisions when allocating budgets and developing your business strategy. If there is anything you are not sure about, make sure you ask your Hungarian accountant!
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