VAT grouping is an optional regime available under Hungarian tax
law for domestically established affiliated companies. It enables
the optimization of VAT payments within related enterprises. This
article outlines the key aspects and operational details of VAT
grouping.
Legal Framework
Article 11 of the EU VAT Directive allows Member States to treat
multiple legally independent but closely related entities as a
single taxable person. The detailed regulations are set at the
national level, and in Hungary, these are stipulated in the VAT Act
under the section "VAT Grouping".
Conditions for Establishing a VAT Group
VAT groups can only be formed by entities that are economically
established or have a permanent residence in Hungary and qualify as
affiliated companies. Joining a VAT group does not create a new
taxpayer status, and the definition of affiliated enterprises is
determined by other legal regulations, including the Act on the
Rules of Taxation, the
