Fixed establishment assessment

Fixed establishment assessment advisory

Check and manage your local tax obligations with our help!

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Dániel Sztankó, RSM Hungary, Head of Indirect Tax Services

Dániel Sztankó

Head of Indirect tax services

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You will have fixed establishment (FE) for VAT purposes in Hungary if you have:

  1.  assets or technical resources
  2. staff
  3. for a longer period of time
  4. in a fixed place in Hungary.

If you have fixed establishment in Hungary the place of supply of certain services may be altered. To establish whether you have fixed establishment a thorough review of your business processes and commercial agreements may be needed.

While in most cases circumstances that lead to permanent establishment (PE) for Corporate Income Tax (CIT) and Local Business Tax (LBT) purposes are the same as for FE for VAT purposes, a separate PE analysis may be needed which is based on Double Tax Treaties, BEPS and domestic law.

If you have a PE in Hungary, you may be required to pay 9% CIT (as of 2017) and/or LBT on the income attributed to your PE in Hungary, but will most likely pay less CIT in your home country.

RSM Hungary can help you to determine whether you have FE for VAT purposes and PE for CIT/LBT purposes from VAT and income tax point of view and more generally advice on your local tax obligations.


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