The United Kingdom left the European Union at midnight on 31 January 2020 (Brexit), and the post-Brexit transition period ended on 31 December 2020. One of the most important changes associated with the exit is that taxpayers established in the UK, i.e. domiciled or having premises in the UK, will in certain cases no longer be able to act independently in meeting their tax obligations, but will have to appoint a so-called fiscal representative.

According to the relevant rule of Act CXXVII of 2007 on Value Added Tax[1] , taxable entities from third countries are obliged to appoint a financial representative if they are not established for business purposes in the Community but are liable to pay tax on transactions carried out in Hungary.

As from 1 January 2021 the United Kingdom will be treated as a third country, and the appointment of a financial representative will be mandatory for taxable entities not established in Hungary (or in another Member State of the Community) but in the United Kingdom for economic purposes (or who are residents of or have habitual abode in the United Kingdom, if they are not established for economic purposes). This obligation applies both to UK taxpayers already registered in Hungary and to UK taxpayers registering in the future.

If the UK taxpayer concerned has a permanent establishment in the Community, and maintains it after the exit, he shall not be regarded as established in a third State, and is not required to notify a financial representative, but may choose to appoint a financial representative to exercise his rights and fulfil his obligations under the VAT Act. However, if he does not have a permanent establishment in the Community, then he is obliged to appoint a financial representative and register him with the NTCA.

There is also no obligation to use a financial representative if the UK taxpayer carries out a domestic transaction for which the tax is paid through a non-EU one-stop shop.

Act CLI of 2017 on the Tax Administration Code contains additional provisions on the financial representative. Accordingly, a foreign company which is not required to be established for economic purposes in connection with its domestic economic activity may engage a financial representative to fulfil its domestic tax obligations. Based on the notification, the NTCA registers the foreign company and its financial representative and assigns a tax number to the foreign company. A business that already has a tax identification number does not need to apply for registration again, they only need to notify the financial representative.

In the context of its domestic economic activity, the Hungarian tax number of a foreign company not obliged to establish itself for economic purposes will not become invalid after Brexit, this does not mean however that, if it is obliged to do so, it should not appoint a financial representative and register him with the NTCA.

The financial representative of the foreign company can be notified on form 'T201, whereas the private individual acting on behalf of the financial representative can be notified on the on the EGYKE form.


[Ministry of Finance, Department of Indirect Taxes PM/3943/2021; National Tax and Customs Administration, Central Management, Department of Taxpayer Services and Information, PM-65/2021]


[1] Section 148 (2) of the VAT Act