Fiscal representation

Fiscal representation – Who is obligated

The appointment of a fiscal representative is a legal requirement for businesses established outside the EU but conducting taxable transactions domestically.

A foreign entity is generally required to obtain a Hungarian tax number if it sells products or provides services with a place of supply in Hungary, and the reverse charge mechanism cannot be applied to the given transaction under the relevant regulations or purchases goods from the EU.

The fiscal representative provides a guarantee to the tax authorities for fulfilling tax payment obligations. Fiscal representation is a specific form of representation based on a permanent power of attorney. Companies within the EU may also choose to appoint a fiscal representative, but it is not mandatory for them.

Many international companies take advantage of fiscal representation, recognizing that it not only alleviates significant administrative burdens but also offers long-term benefits in effectively managing VAT audits and leveraging the local expertise of advisors (fiscal representatives) in areas such as customs, EKÁER, environmental product fees, and EPR.

Why choose RSM’s fiscal representation services?

With the reliable, international backing of RSM Global and our company’s more than 20 years of experience in fiscal representation, our service provides fast, efficient, and reliable, personalized solutions for our clients.

Fiscal representative

The essence of fiscal representation is that the representative assumes joint and several liability for fulfilling their principal’s tax obligations in Hungary, while acting on behalf of and for the benefit of the client before the tax authorities.

Responsibilities of the fiscal representative

The fiscal representative's responsibility is to ensure that the company they represent fulfills all its tax obligations in Hungary, including:

compliance with invoicing requirements,
maintaining records,
fulfilling EKÁER obligations,
submitting tax returns,
paying taxes,
responding to tax authority inquiries,
and handling tax audits.

The fiscal representative, if necessary, is also financially liable for the company's tax obligations: their person and assets serve as a guarantee to the state and the tax authorities for the fulfillment of tax payment obligations.

Who can act as a fiscal representative?

Under Hungarian regulations, a fiscal representative can be:

a limited liability company (kft.) or a joint-stock company,
with a registered capital of at least HUF 150 million or an equivalent amount in a bank guarantee issued in its own name (this threshold will apply to all fiscal representatives from 2025),
and with no tax debts recorded by the Hungarian Tax Authority (NAV).

The fiscal representative must continuously meet the above criteria, not only at the time of accepting representation but throughout the entire period of representation.

The fiscal representative fulfills the domestic tax obligations on behalf of the foreign business and exercises the rights entitled to the taxpayer. Therefore, during the period of fiscal representation, the foreign business cannot act personally or through another representative before the tax authority.

Joint and several liability of the fiscal representative

The fiscal representative is jointly and severally liable for the domestic tax obligations of all foreign businesses they represent at any given time, including those foreign businesses that terminate their fiscal representation without appointing a new fiscal representative.

As a result, it is in the fiscal representative’s vital interest to ensure that, upon termination of their mandate, a new fiscal representative takes over the responsibilities—because the "former" fiscal representative remains liable for any tax compliance failures arising from the lack of notification of a new fiscal representative.

As a fiscal representative, RSM performs the following tasks:

Ensuring the company's Hungarian VAT registration with the tax authority,
Preparing and submitting VAT returns, summary reports, environmental product fee declarations, EPR, and other tax filings and reports on behalf of the represented company,
Supporting the fulfillment of Hungarian tax obligations,
Providing advice on any tax-related issues, with a focus on VAT and invoicing matters,
Representing the company during tax audits,
Fulfilling tax-related obligations arising in Hungary.