If the annual value of distance sales to Hungary is less than € 35,000, then VAT is charged on domestic sales subject to tax at the rate applicable in your country.
If you exceed the distance selling threshold, you should charge Hungarian VAT on sales subject to Hungarian VAT at a 27% VAT rate, instead of applying the rate in your country and including it in Hungary.
The registration date is the date when the total distance sales turnover threshold is exceeded. It is also the date from which you need to start adding Hungarian VAT to sales.
Companies with a Hungarian VAT number must submit periodic declarations detailing all taxable supplies (sales) and inputs (costs). VAT returns submitted by non-resident economic operators are usually submitted monthly by the 20th day of the month following the end of the reporting month.
Hungarian taxpayers must submit quarterly tax returns. However, taxpayers whose VAT due in a given tax year or in the second year before a given year exceeds HUF 1 million must submit it monthly. Taxpayers whose VAT due for the second year preceding a given year does not exceed HUF 250,000 must submit VAT returns annually if they have not received an EU VAT identification number. However, the taxpayer may choose to submit quarterly declarations.
The delayed submission of a VAT return results in a maximum fine of HUF 500,000 and interest for late payment. If the refund is made on time, but VAT is paid late, interest is charged for the delay. The interest rate used is twice the current basic rate of the Hungarian National Bank multiplied by 1/365 for each day late.
If the refund has been made but the VAT liability has not been reported, the penalty is 50% tax arrears plus interest for late payment. Default interest is not imposed if the taxpayer is able to justify the delay. Depending on the circumstances of the particular case, the delay penalty may be reduced or canceled by the tax authorities.