In restaurant catering, the discounted 5% VAT rate can be applied to food and locally produced non-alcoholic beverages if the following conditions are met:
- According to TESZOR'15, it falls under code 56.10, that is, restaurant and mobile catering, and
- The transaction is considered a service.
When is it possible to use the reduced VAT rate for restaurant catering in Hungary?
Public
Hungary
Author: Kristina Dosen
Category:
Fiscal subject related
Views:
930
Content accuracy validation date:
25.05.2023
Content accuracy validation time:
08:07h
The transaction can be considered a service if the sale of the prepared food and drink is accompanied by appropriate additional services that allow immediate consumption on the spot; for example, dining facilities are provided with tables, chairs, and benches, and these service elements dominate the transaction. The sale of food and drink is therefore only one part of the transaction, in which services predominate.
In the transaction, the provision of services dominates if there is an opportunity for local consumption, and the guest lives with this; that is, he accepts the additional services that enable immediate consumption. However, if it is not possible to eat on-site or the guest asks for the food or drink to be taken away, then product sales dominate the transaction instead of service. That also means that the predominance of service provision can be realized not only in restaurant catering, in conditions typical of restaurant catering, but also, for example, in fast food restaurants, in the so-called "food courts" of shopping centers, where there is usually no service and guests have to take plastic trays and cutlery.
When determining the typical and dominant elements of the transaction, all the circumstances of the hospitality business must be taken into account, because only by evaluating them can it be decided whether the transaction is more of a product sale or more of a service provision. It is not the level of service provision that is decisive, but the service elements related to the given activity. Thus, the application of a reduced VAT rate for local consumption cannot be ruled out, even for services of a less advanced standard compared to restaurant catering. This is also supported by the Court's 2022 ruling, according to which the dominance of service provision cannot be established only in circumstances typical of restaurant catering.
Overall, it can be said that the existence of additional services must always be judged in relation to the nature of the given service. The specific activity must be examined and judged from the point of view of the average consumer.
Other news from Hungary
Hungarian authorities are discussing the benefits of introducing e-cash registers and replacing online cash registers.
Hungary
Author: Tara Nedeljković
Hungarian tax authorities are promoting the transition from online cash registers to new e-cash registers, highlighting cost savings, easier maintenance, and the elimination of mandatory receipt storage due to a built-in receipt archive. Businesses will have the option to use either hardware-based or cloud-based e-cash registers, with a free smartphone app version available for small businesses, while the use of online cash registers will remain permitted until 1 July 2028. Read more
Hungary enacts the long-awaited official legislation on e-cash register requirements!
Public
Hungary
Author: Tara Nedeljković
Hungary
Author: Tara Nedeljković
Hungary has officially enacted the long-awaited 8/2025 (III. 31.) NGM Decree, also known as the EPG Decree, establishing the legal framework for electronic cash registers (e-cash registers) and e-receipts. Starting July 1, 2025, taxpayers may voluntarily adopt certified hardware-based e-cash registers, with mandatory transition for relevant sectors by July 1, 2028. The National Tax and Customs Adm... Read more
TLv6 Implementation Marks Significant Shift in EU’s Trust List Format
Public
All countries
Author: Ivana Picajkić
A new EU Trust List format, TLv6, will officially replace TLv5 in May 2025 as part of the updated eIDAS Regulation (EU 2024/1183). It introduces key technical changes like a new URI field, updated signature format, and optional phone number support. Organizations must update their systems to avoid signature validation failures and service disruptions, as TLv5 will no longer be valid once TLv6 take... Read more
VIDA regulation adopted—what does that mean for business?
Public
Author: Nikolina Basić
The EU adopted the VAT in the Digital Age (ViDA) package on March 11, 2025, introducing major changes to the VAT system starting January 1, 2027. Key reforms include mandatory digital VAT reporting by 2030, new VAT collection rules for online platforms, and expanded One-Stop Shop (OSS) registration to simplify cross-border compliance. Additional measures, such as mandatory e-invoicing, phasing out... Read more
New document was uploaded: Decree on the distribution and operation of e-cash registers, as well as on the requirements for the issuance of e-cash registers and e-receipts (HU)
Hungary
Author: Kristina Dosen
The Hungarian government has introduced a new decree regulating e-cash registers and e-receipts to enhance digitalization and tax compliance. The decree comes into effect on March 1, 2025, with full implementation expected by 2028. Read more
New document was uploaded: Decree on the distribution and operation of e-cash registers, as well as on the requirements for the issuance of e-cash registers and e-receipts (EN)
Hungary
Author: Kristina Dosen
The Hungarian government has introduced a new decree regulating e-cash registers and e-receipts to enhance digitalization and tax compliance. The decree comes into effect on March 1, 2025, with full implementation expected by 2028. Read more
A new draft decree defining the requirements of the new e-cash register system is published in Hungary.
Hungary
Author: Tara Nedeljković
Hungary has published a draft ministerial decree outlining the requirements for a new e-cash register system, set to replace the current online cash register framework. While businesses can voluntarily adopt e-cash registers, mandatory use will begin in the second half of 2026, with a full transition expected by 2028. Read more