Hungary Implements EU-Wide VAT Rules for Virtual and Entertainment Events

January 13, 2025

Last year, the EU published the newly adopted Directive 2022/542, which focused on the palace of supply for virtual events. Under that Directive, starting on January 1, 2025, taxability rules for cultural, artistic, scientific, educational, entertainment, or similar activities changed, making the place where the consumer resides or has a permanent address (B2C) relevant.

At the beginning of 2025, the Hungarian National Tax and Customs Office released a notice explaining new taxability rules relating to the place of supply of services for entertainment and virtual events.

The Impact of New Taxability Rules

General VAT rules state that the place of supply for services providing access to cultural, artistic, scientific, educational, entertainment, sporting, or other similar events is where the event is being held.

However, these rules changed on January 1, 2025. When the consumer is a non-taxable person, the place of supply of these services is the consumer's permanent address or, when such an address is unavailable, the usual place of residence. In other words, B2C transactions are taxed according to the consumers' location.

For business-to-business, B2B, transactions relating to online organized events with a virtual presence, the place of supply is determined based on the general rules, meaning the place where the business receiving the services is established.

The Hungarian government amended articles 37, 42, and 43 of the national VAT Law to implement these new rules at the EU level and align with EU legislation.

Conclusion

Businesses and companies that sell tickets or are in any other way engaged in providing access to cultural, artistic, scientific, educational, entertainment, sporting, or similar events, such as exhibitions, fairs, presentations, and other ancillary services, should consider the implications of new rules for their business models.

Moreover, they should adapt their in-house policies and adjust their invoicing and accounting systems to meet new requirements.

Source: National Tax and Customs Office, VATabout

What is the new place of supply rule for virtual events in Hungary?

Under the new rule effective January 1, 2025, B2C services for virtual events are taxed based on the consumer’s permanent address or usual residence.

How does Hungary’s VAT rule change impact B2B transactions?

For B2B transactions involving virtual events, the place of supply remains where the business receiving the service is established, following the general VAT rules.

What events are affected by Hungary’s new VAT rules?

The rules apply to cultural, artistic, scientific, educational, entertainment, and sporting events, including exhibitions, fairs, and similar activities.

Why did Hungary implement these new VAT rules?

Hungary aligned its VAT laws with EU Directive 2022/542 to standardize the place of supply for cross-border virtual and entertainment services across the EU.

How should businesses prepare for Hungary’s VAT rule changes?

Businesses must update invoicing and accounting systems to reflect new B2C VAT rules, ensuring compliance with taxation based on consumer location.

When did the new VAT rules come into effect in Hungary?

Hungary implemented the updated VAT rules on January 1, 2025, aligning with the EU-wide adoption under Directive 2022/542.

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