As of 1 January 2021, the United Kingdom is definitely considered a third country. Therefore, British companies wishing to obtain a refund of VAT paid in Hungary are subject to the 13th Directive refund procedure. As a reminder, the refund of Hungarian VAT is only possible if the following conditions are met:
- Existence of a reciprocity agreement for VAT refund between the country of establishment and Hungary;
- During the period covered by the refund application, the company did not carry out any transactions that would require it to register for VAT in Hungary;
- The VAT has been regularly invoiced by the supplier or service provider;
- The VAT concerns expenditure on purchases of goods or services used for transactions giving rise to the right to deduct;
- The VAT does not concern expenses for which VAT deduction is excluded by Hungarian regulations.
In this context, the Hungarian government has indicated that a reciprocity agreement has recently been concluded between the UK and Hungary, which applies retroactively.
For more details, contact our experts.
Source: Government of Hungary (pdf in Hungarian)
