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Research by Country/Region January 23, 2018  
HUNGARY: CUSTOMS, TAXES, and DOCUMENTATION REQUIREMENTS: IT PRODUCTS and SERVICES IMPORTS

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A. Is this country a member of the Information Technology Agreement?

B. Customs documentation requirements for IT products

C. Software: duties and taxes, updates, licenses, electronically delivered

D. IT services: tax treatment and other regulations

E. Refurbished, used, or repaired computer equipment imports


A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
YES
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS

What are the documentation requirements for the physical import of software? For other information technology products?
Documents to be provided in case of the tangible import of software:
- Waybill and
- Commercial invoice stating the country of origin.
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED

DUTIES AND TAXES ON SOFTWARE IMPORTS

Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
Duties are imposed on the data medium carrying the software – HS 8524.39.10 for a CD, HS 8524.91 for a magenic disk. The import duty for both media is 5%.
    Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
    A 25% VAT is levied in addition to the duties mentioned above. As of January 1, 1998 the Act on VAT stipulates that the basis for the VAT is not only the value of the medium but also the license fee or royalty.

    Is customized software treated differently than packaged software?
    Customized software is not treated differently from packaged software.
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    IMPORTS OF SOFTWARE UPDATES

    What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value? How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
    On the original commercial invoice all items must be listed separately:
    - Value of the data carrier - 5% duty + 25 % VAT
    - Documentation (manuals) HS Tariff No. 4901 - zero duty + 12 % VAT
    - License fee - customs cleared under the data carrier’s tariff number - 5 % duty + 25 % VAT

    When the updates are sent at a later date, a pro-forma invoice is to be issued only for the value of the medium indicating in the description of goods that it is an update, free of charge, value for customs purpose only. Duty and 25 % VAT is imposed only on the medium

    The commercial invoice should include:
    - Name, address of the seller and the buyer (consignee)
    - Invoice number, date of the invoice
    - Country of origin
    - Terms of delivery and payment
    - No of packages and signs
    - Description of goods, gross/net weight, unit price
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    SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER

    Are software licenses classified in Harmonized System 4907?
    Software licenses are classified under the data carrier’s tariff number (HS 8524).

    Are import duties/taxes applied? If so, on what cost/price base are they levied?
    The license fee is added to the customs value and a 5 % duty is imposed on it plus 25 % VAT.

    Are withholding or other additional taxes applied on software licenses? If yes, how?
    There is no withholding tax.

    If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
    The license agreement is binding, even if it is in English. Local laws would pertain unless the license agreement specifies otherwise.
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    SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE

    Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
    No import duties are applicable to software delivered over the Internet from a foreign provider. However, a 25% VAT is applicable on the invoice. When a purchase is made online from a foreign website which does not apply the Hungarian VAT to the purchace, the Hungarian customer himself is responsible for declaring that purchase to the tax authorities and for paying the VAT on it.

    Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
    If a local distributor were to physically distribute software downloaded from the Internet (on CDs, for example), then the same 25% VAT would be applied.

    What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
    An invoice would be required if there were a financial transaction. If the customer is not invoiced for downloading a software patch, for example, then there is no value basis for the VAT to be applied to.

    Must an electronically delivered software import be accompanied by a physical shipment of the same product?
    Hungarian law does not require that a cross-border electronic software delivery be accompanied by physical shipment.
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    D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS

    Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
    If the U.S. company provides the training or set-up, there is no duty or tax. If the Hungarian subsidiary of the U.S. company or its reseller provides training there is no tax, but a 25 % VAT is to be applied on set-up. Training material can be imported duty free into Hungary without any tax.
      Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
      U.S. information technology providers are premitted to send personnel into Hungary.
        Are special visa, work permits, and/or professional certification by an accredited body required?
        No visa is required to enter Hungary. In general, if foreign citizens want to work in Hungary and be paid by a Hungarian business entity, a work permit is required. However, if a foreign citizen has the contractual obligation to provide installments, warranties and services on its product, a work permit is not required.
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        E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS

        1. REFURBISHED COMPUTER EQUIPMENT
        Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
        The import of remanufactured parts for photocopiers, fax machines, laser printers and toner cartridges is permitted.

        If so, what are the documentation requirements?
        There are no special documentation requirements.

        Is special labeling required?
        There are no special labeling requirements.

        What value should be shown on the invoice?
        The invoice should state the cost of the built-in refurbished parts plus the fee for the work.

        How are duties and taxes assessed?
        Customs duty is calculated on the basis of the HS Tariff number applicable to the refurbished equipment plus a 25 % VAT is applied. Equipment falling under HS 8471 have a 0% import duty.
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        2. USED COMPUTER EQUIPMENT
        Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
        The import of used computer hardware, parts and accessories is permitted.

        If so, what are the documentation requirements?
        There are no special documentation requirements.

        Is special labeling required?
        There are no special labeling requirements.

        What value should be shown on the invoice?
        The invoice should state the cost of the used equipment.

        How are duties and taxes assessed?
        Customs duty is calculated based on the HS number. A 25% VAT is applied on sales. Equipment falling under HS 8471 have a 0% import duty.
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        3. REPAIRED COMPUTER EQUIPMENT
        Are duties and taxes assessed on the re-import of repaired computer equipment?
        There is no duty and tax on the re-import of repaired computers.

        How should the commercial invoice appear?
        When the computer is returned for repair, a General Customs Clearance Statement should be filled out stating that the computer is shipped to be repaired. The yellow copy of this document should accompany the computer when it is re-imported to Hungary together with a pro-forma invoice stating that the product was repaired, free of charge. If there were parts replaced, those parts should be listed on the pro-forma invoice.
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        RESPONSE INFORMATION

        This response was prepared by the U.S. Department of Commerce/Commercial Service in Budapest in February 2003. For further clarification please contact:
        Andrea Imrik
        Commercial Specialist
        U.S. Embassy, Budapest
        andrea.imrik@mail.doc.gov

        Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.

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