VAT refund in Hungary: A complete guide to tax-free shopping in Hungary for tourists

Travelling to Hungary from the UK soon? Hungary can tick all the boxes for any type of travelling you are looking for: delicious cuisine, charming architecture, a thriving nightlife, and stunning natural scenery! At the heart of this delightful country is its up-and-coming tourist hotspot, Budapest. This fascinating city is divided by the Danube River, with one side showcasing peaceful hills and a grand palace, while the other pulses with bustling city life—ensuring there’s something for everyone!

As you explore the diverse facets of Budapest, you’ll soon discover that VAT in Hungary can be as high as 27%, making it one of the highest rates in the world.

But don't let this high VAT intimidate you – as a Brit coming to Hungary to travel, you might qualify for a VAT refund in Hungary. If Hungary is your next stop, take a look at this article to see how to make the most of your VAT refund in Hungary and make your trip a bit easier on your wallet. And if you are travelling only to Budapest, this article will give you specific instructions to claim your VAT refund at Budapest airport.

And here’s a little bonus: use a Wise debit card to get your VAT refunds back to save even more!

How much is VAT in Hungary?

In Hungary, VAT is commonly referred to as Általános forgalmi adó (AFA). When reviewing your invoices, you may see either VAT or AFA, but both essentially refer to the same type of tax.

As you might have already known, Hungary’s AFA rate is notably high, with the standard rate set at 27%. However, just like other countries in the union, there are reduced rates for certain products and services in Hungary as well. For example, you'll encounter an 18% AFA when purchasing specific dairy products or tickets to outdoor music events. If you're booking hotel accommodations, the AFA might drop to just 5%. Additionally, for some other goods and services, you might not need to pay any VAT at all.

You can refer to the provided table to determine the applicable tax rate for your goods and services¹:

Tier	Rate	Applicable goods
Standard rate	27%	Majority of goods.
First reduced rate	18%	Certain dairy products; Certain starch-based food products; Tickets to certain occasional outdoor music events.
Second reduced rate	5%	Certain medicines; Books; Newspapers and Periodicals; Music Sheets; Heat service; Accommodation service.
The zero rate	0%	Postal service; Public service radio and audiovisual media services; Medical and social care services; Education services.

How much VAT is refunded in Hungary?

The standard VAT rate in Hungary is 27% of the purchase price, but you generally won’t receive the entire amount back. It is also quite complicated to determine in advance how much VAT is refunded in Hungary. Your actual VAT return may be less than expected because of the following fees:

• Intermediary Fees: If you use a VAT refund agent in Hungary, be aware that administration fees will be deducted from your refund amount. These fees can vary depending on the agent and your total spending. So if you want to know the exact fee, you can use the Hungary VAT refund calculator from the agent you work with.
• Foreign Exchange Fees: If you choose to receive your refund via a British card, you may incur foreign exchange fees, which can further reduce your actual VAT refund in Hungary.

As a result, you are likely to be reimbursed up to 19% of your original purchase price.

Who is eligible for tax-free shopping in Hungary?

To be eligible to get your VAT refund in Hungary, you must meet these conditions²:

• You must have permanent residency outside the EU;
• You will take the unused goods with you in your personal luggage 90 days from the purchasing date; and
• The total value of the invoice must exceed 175 EUR (including VAT).

How to get VAT refund in Hungary?

There are also several steps you must follow before you can receive your VAT refund in Hungary.

First things first: while you’re shopping, ask the store assistant about their tax refund policy. Each shop might handle VAT refunds differently, so it's good to know your options. You can either buy from those tax-free shops where they will deduct or return your VAT on the spot. Or you can claim your VAT refund in Hungary after leaving the EU.²

Receive tax refund form & original invoices

If your retailer in Hungary offers to refund your VAT when you leave the EU, make sure to ask them for a tax refund form. It is important to keep in mind that each tax refund form can only include the sales data from one single invoice. The sales assistant will provide you with three copies: the shop will keep one for the records and give you two to keep. Don’t forget to request the original invoice as well. You need to cross-check all your personal information in the tax refund form and the invoice. Without collecting invoices and the form, you won’t be able to claim your VAT refund in Hungary.

The sales assistant may also request to see an officially recognized identity document to verify your eligibility, so remember to bring one (e.g., your passport) to get your VAT refund in Hungary.

Have the forms stamped

Before leaving the country, your goods must be validated by a Customs officer. You can do this by having your tax refund form stamped.

If you are leaving Hungary directly to the UK, you should get your invoice stamped right at the airport in Hungary. You will have to physically present the original invoices, the tax-refund form, and your unused goods. Remember the two copies of your tax-refund form you receive from the retailer? If you meet all of the requirements, the Customs will help you to stamp both copies. Customs will keep one copy, so hold on to the last one—you’ll need it to claim your refund.

If you are doing your VAT refund in Budapest International airport, you will need to get your boarding pass first.³ Inform the check-in assistant that you have goods to declare for VAT refund in Hungary.

If your goods are in your carry-on luggage, go directly to the Customs desk behind passport control. If your goods cannot be taken on the plane due to security regulations, don’t check them in just yet. Instead, head to the Customs office at Terminal 2B after getting your boarding pass to validate your goods. After obtaining the Customs stamp, you can proceed to the oversized baggage counter in the check-in area.

Obtain a VAT refund

Now you’re all ready to obtain your VAT refund in Hungary. To complete this process, send the last validated forms back to the seller. If you’re using a VAT refund agent, follow their specific instructions—some might require you to visit a designated counter. At Budapest International Airport³, you can present your forms at the Interchange in Terminal 2B for your refund.

By default, you are entitled to get your VAT refund in Hungary in cash with HUF. However, some shops might be able to offer you a different currency and/or a different method of payment. For instance, you might choose to receive your VAT refund on your credit card in EUR.

So, now you have it! This handy guide explains a few steps to get your VAT refund back in Hungary. The whole step is rather easy to follow: from what to ask at the shops to obtaining your refund. Getting your VAT refund is one effective way you can save your cost during the trip in Hungary. But, you might want to know one last secret to save even more money!

While some shops might let you receive your VAT refund in Hungary with your British credit card, keep in mind that there will be currency conversion. If the denominated currency of the card (e.g., GBP) is different from the local currency (e.g., EUR), it will be automatically converted every time you swipe your card. Your bank will set this conversation rate, typically with a hidden markup! With all of these extra fees, your VAT refund in Hungary might be less than you think!

To avoid extra costs on currency conversion, consider receiving your refund with a Wise debit card, which allows you to hold 40+ currencies, including HUF and EUR. This card allows for auto-conversion on all your holiday spending at the mid-market rate for a small and transparent fee.

Get your Wise card for a one-time fee of 7 GBP, and get ready to start your adventure today!

Get your card now

Please also be aware that tax rates and regulations may change over time. Always verify the information with official sources for the most accurate and up-to-date guidance.

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Sources used for this article:

1. Nemzeti Adó- és Vámhivatal: Áfa kulcsok és a tevékenység közérdekű vagy egyéb sajátos jellegére tekintettel adómentes tevékenységek köre 2022. január 1-jétől
2. Nemzeti Adó- és Vámhivatal: Travel Guides
3. Budapest Airport: Tax Free Shopping

Sources last checked on 27-Sep-2024.