The Internal Market Services Directive is implemented in Hungary by the Act on the General Rules for the Commencement and Pursuit of Service Activities, and by the related implementing decrees.
Types of services
The Central Statistical Office regularly updates the Product and Service Classification System (TESZOR), in accordance with the EUROSTAT update procedure. TESZOR aims to systematise, group and code the many types of services carried out in society and the economy (and the products created as a result of economic activity), and to enable individual service types (or product types) to be identified.
Services affected by the Services Directive
The Services Directive essentially applies to all services that are not clearly exempt from it. The Services Directive inter alia relates to services provided in the following areas:
Commerce and hospitality
The Commerce Act provides for the requirements and conditions for pursuing commercial activities, commercial services, and commercial tourism service activities. With the exception of commercial activities that are subject to licence, service providers must report their intention to pursue commercial activities to the commercial authority.
Real Property Services
The rules relating to estate agents’ activities are contained in the Certain Rules of the Lease and Alienation of Residential and Non-Residential Premises, and to their Divestment. Estate agents’ activities, and property valuation and agency activities, conducted on a commercial basis (hereinafter service activities) may be pursued by those who have professional qualifications in such activities, as defined in the Ministerial Decree Issuing Professional and Examination-Related Requirements for Professional Qualifications Falling Under the Jurisdiction of the Minister for Local Government and Rural Development.
The Act on Apartment Houses Contains Rules Relating to the Activities of Apartment House Agents. Estate agents’ activities, and property valuation and agency activities, conducted on a commercial basis (hereinafter service activities) may be pursued by those who have professional qualifications in such activities, as defined in the Ministerial Decree Issuing Professional and Examination-Related Requirements for Professional Qualifications Falling Under the Jurisdiction of the Minister for Local Government and Rural Development.
Legal, accounting and tax expert activities, and management consultancy
Legal, accounting and tax expert activities are expert services requiring a high level of specialist qualifications, and providing such services requires specific knowledge, expertise and skill. However, business management and management consultancy is consultancy offered to commercial enterprises and other organisations for management-related questions such as the development of strategic and organisational planning, financial planning, marketing policy, and human resources policy. Tax consultancy, tax expert activities, and accounting services are regulated professions that are subject to an advance reporting obligation.
Advertising activities and market research
The advertising activities and market research activity group includes the planning and implementation of publicity campaigns, the appraisal and analysis of market opportunities for and acceptability of products, and the conducting of public opinion polls in political, economic and social matters and the statistical analysis of the results.
Architectural planning and expert activities
Drawing of architectural and technical plan documentation necessary for the construction, expansion, renovation, reconstruction, restoration, modernisation, demolition, displacement or change of purpose of a building, building unit, building complex is an architectural technical planing activity. The building technical expert activities include the high-standard special analysis of cause and effect correlations in technical phenomena relating to the development and protection of the built environment, including the assessment of debated cases; investigating the defects, damages and their causes; an making relevant expert opinions. The activities may be displayed in possession of permits.
Construction industry services
Construction industry services include the building of complete constructions and specialised building, the construction of new buildings, building improvements, extensions and conversions, and the on-site erection and assembly of pre-fabricated buildings or other structures. The building technical controller promotes and controls adherence to legislation, official requirements, standards, contracts and construction documentation during the whole process of the construction activity. The responsible technical manager is responsible for the management of construction activities. Both activities are regulated professions subject to preliminary controls The duty of the investment manager is to select the general contractor, the technical controller, to sigh contract on behalf of the customer, to acquire the necessary official permits for the implementation of the construction works, to make cost-efficiency calculations and to settle price disputes. Investment brokerage activity is a regulated profession subject to a reporting obligation.
Tour operations and tour guiding
Tour operator and travel agency activities may only be pursued in Hungary by travel entrepreneurs who fulfil the conditions stipulated in the Commerce Act and the Government Decree Regulating Tour Operator and Travel Agency Activities, and who have been licensed by the Hungarian Trade Licensing Office to pursue such activities, on the basis of an application.
Persons who carry out tour guiding activities must hold a tour guiding qualification. Tour guiding activities may only be carried out in the language(s) in which the person carrying out the tour guiding activities has passed a language exam or has an equivalent level of knowledge.
Services not affected by the Services Directive
Numerous services are explicitly exempted from the Services Directive. Such services include financial services, non-economic services in the public interest, electronic communication services and communication networks, services provided in the transport sector, temporary employment agency services, health care services, audiovisual services, gambling, services relating to the exercise of official authority, certain social services, private security services, and services provided by notaries and bailiffs.
The free movement of financial services is subject to regulations. Lenders, investment service providers, insurance companies, independent insurance brokers and advisers do not need a licence to operate in a host country if they are correctly registered in their home country.
Different ways of providing services
Setting up a service business
According to the principle of freedom to provide services, EU companies are entitled to provide services in other Member States of the European Union.
Providing services on a temporary basis
According to the principle of freedom to provide services, EU companies are entitled to provide services in other Member States of the European Union, either by setting up a company there, or by telephone, Internet or direct trading, without having to establish premises there. Cross-border provision of services means service activity without establishing premises, on a temporary or occasional basis.
Rights of service recipients
The national authorities are obliged to provide information and assistance in relation to consumer rights and possibilities of legal remedy.
Data on the labour market situation are provided by the Central Statistical Office, the Ministry for National Economy and the Ministry of National Resources. Foreign nationals may be employed in Hungary under various conditions. As a general rule, the employment of foreigners in Hungary requires a permit. However, the law provides for a number of exceptions to this.
Based on the principle of mutual recognition of qualifications, if you are authorised to practise a profession in one member country, you must be allowed to practise the same profession in another member country. During the naturalisation and recognition procedure, diplomas and certificates obtained abroad assume equal value to those that can be obtained in Hungary.
Consumer complaints may be referred to the Hungarian Authority for Consumer Protection. Service providers are obliged to provide their contact details for consumers to send complaints or where information on the services in question may be obtained.
"Points of Single Contact"
Information is available for administration purposes at the integrated administration and information points, www.kormanyablak.gov.hu and www.magyarorszag.hu central websites In Hungary. The government windows were opened nationwide at 29 sites in January 2011 in the first step of the creation of the system of single points of contact. Their highlighted duty is to offer information to the clients in public administration affairs. Currently, they are available for the citizens and enterprises for 61 types of affair. The single point of contact started with the most common affairs, but the service will be expanded step by step. Thereby, the clients will be able to contact employees working at the government windows at 300 sites and in more than 2000 types of affair from 1 October 2013.
All companies and sole trader businesses must register at the competent court of registration for the company’s registered office. Applications for registering or amending details must be submitted electronically via a legal representative. The court of registration electronically records documents relating to the company and provides an electronic certificate of registration as well as confirmation of any changes made.
In procedures for the issue of a sole trader's licence, the "one-stop shop" means that the district notary (documents office) obtains the tax number and, where necessary, identification number, and the statistical code, directly using the computer system created for this purpose, instead of the applicant. The applicant therefore does not need to deal in person with the competent State tax authority or the Central Statistical Office prior to reporting sole trader activity.
Tax payment obligations
In the event that a service is provided, the obligation to pay value added tax arises at the time of performance, unless otherwise provided for. The consideration paid for the supply is the tax basis. Approval of the validity of the community tax numbers and the accuracy of identity figures can be requested from the Central Contact Office of the National Tax and Customs Administration or at the website of the European Commission via the VIES system. The Hungarian tax numbers are available via the website of the tax authority.
The taxation process starts with the taxpayer’s registration, during which the tax authority registers the taxpayer and issues him a tax identification code or number. Any subsequent changes must also be registered.
The Social Security Number (TAJ number) is a personal identifier that Hungarian nationals receive at birth and keep all their lives. This code is used in records relating to healthcare, social and personal pension systems. TAJ numbers are generated by the National Health Insurance Fund (OEP).
Employers must pay pension fund contributions, health insurance contributions and labour market contributions on a monthly basis, in order to cover any social security benefits.
Employers may only advise of employment relationships and satisfy their obligations relating to wage contribution returns electronically on the Government Portal once they have registered at the Client Gateway:
Proof of qualifications
The Hungarian Equivalence and Information Centre of the Ministry of Education is responsible for recognising foreign certificates, qualifications, degrees and training.
Work permit applications
EEA citizens and their family members do not require a work permit in Hungary. Third-country nationals may only work in Hungary under certain defined conditions. As a general rule, employment is subject to licensing. Citizens of the EU/EEA and Swiss citizens may work in Hungary without work permits, that means that Hungary applies the community law in the field of free flow of employees. The employer is obliged to report the employment of any person having a right of free movement and residence to the labour centre competent in accordance with the place of employment.
Information on visa types and how to apply for them can be found on the following pages:
The website of the Hungarian Financial Supervisory Authority provides useful information on financial organisations providing cross-border services: