VAT 2025 – Most Important Changes

1. EU individual tax exemption

As of  1 January 2025, the individual exemption rules will be significantly expanded:

• Hungarian businesses can opt for VAT exemption in other EU member states where they do not have a permanent establishment. 
• EU businesses can also benefit from the tax exemption in Hungary.
• Eligibility requires that the annual revenue does not exceed the threshold of the respective member state and the EU-wide limit of EUR 100,000. 
• The individual tax exemption threshold in Hungary remains unchanged at HUF 12 million.

VAT ADVISORY

2. E-receipt and e-cash register

The introduction of the e-receipt system has been postponed to 1 July 2025. 

 Key points to note: 

• E-receipts will only be issued electronically.
• The e-cash register will be introduced, gradually replacing the current online cash registers.
• The aim of the e-receipt system is to enhance tax awareness among customers and reduce commercial administration.

3. Data reporting obligation on receipts

With the introduction of the e-receipt system, the method of data reporting will also change. 

• E-receipts will be automatically stored in the receipt repository.
• Data reporting to the tax authority will occur automatically. 
• Customers will be able to access their receipts and information about previous purchases through an application.

4. Change in M-forms

From 2025, the rules regarding purchaser invoice data reporting will be amended.

• Reported data must be rounded to forint, not to thousand forints.
• For VAT returns submitted through the e-VAT system, M-forms will still not be required. 

5. The 5% VAT rate on residential property remains until the end of 2026

According to the legislation, the 5% VAT rate on the sale of new residential property will remain in effect until 31 December 2026. 

For prolonged construction projects, transitional rules allow the preferential tax rate to be applied until 31 December 2030, provided certain conditions are met.  

6. Narrowed scope for indirect customs representatives

To combat the grey economy and curb tax fraud involving indirect customs representatives, the scope of cases where the indirect customs representative may exercise the right to deduct VAT on imports on behalf of his client will be narrowed. The rules were amended shortly before the adoption of the final legislation, making it essential for affected parties to review the finalized regulations.

From 2025, the indirect customs representative may deduct import VAT if the importer has an unrestricted right of deduction, is subject to monthly filing and declares to the indirect customs representative that these conditions are met, or holds a permit for import VAT self-assessment.

VAT Advisory

Additionally, the importer must not qualify as a high-risk taxpayer during the tax period in which the right to deduction arises. If the importer is not classified as high-risk but does not qualify as a reliable taxpayer either, the indirect customs representative must conduct a partner verification to ensure no tax risk arises. The indirect customs representative must perform this partner verification before entering into a contract for indirect customs representation and repeat it monthly during the contractual relationship for any month when imports are carried out.

The indirect customs representative must report data on the results of the partner verification to the Hungarian tax authority by the date of concluding the contract and by the 10th day of the month following each month in which imports are conducted. The tax authority will publish information regarding the criteria for partner verification on its website.

7. Client Gate+ and DÁP: end of the Client Gate and the new options

Significant changes will take effect in Hungary's electronic administration system starting 16 January 2025: the current form of the Client Gate (Ügyfélkapu) will be discontinued. In the future, users will have two alternative solutions to choose from: the Client Gate+ (Ügyfélkapu+) and the DÁP (Digital Citizenship Program) mobile application, offering new options for online administration.  Both individuals and businesses must consider in advance how they will authenticate themselves when accessing state-provided electronic services in the future — whether through the Client Gate+ or the DÁP.

Please read our detailed blog post on the transition to Ügyfélkapu+ and DÁP.