Services - Hungary
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. Among other things, the Services Directive 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.
Commercial and property management activities
The rules relating to estate agents’ activities are contained in the Act on Certain Rules Relating to the Lease of Homes and 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.
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.
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. 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. If credit institutions, investment service providers, insurance companies, independent insurance brokers and advisers that are registered in the EU satisfy their reporting obligations in the state in which they have their registered office, they do not require an operating licence from the authority of the host state.
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 opportunities for legal remedy.
Data on the labour market situation are provided by the Central Statistical Office, the Ministry of 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"
There is a single national, electronic point of single contact available in Hungary, which can be accessed through the www.magyarorszag.hu portal. From next year, the 15 decentralised bodies will be organised as a government agency and become physical points of single contact that will initially be available at county level and in major towns and cities. For example, the traffic authority, the State Public Health and Medical Officer’s Service, and health insurance funds will be integrated into the county-level government agencies. The one-stop shop will start with the most common matters, but the service will be expanded step by step.
In Hungary, applications for the registration of a company must be submitted electronically by the company's legal representative. The "one-stop shop" during company registration means that the Court of Registration obtains the company's tax number and statistical code using the electronic system created for this purpose.
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 before sole trader activity is reported.
Tax payment obligations
In the event that a service is provided, the obligation to pay value added tax arises at the time of sale, unless otherwise provided for. The price for performance is the tax basis. The validity of Community tax numbers and the accuracy of identification data may be confirmed upon application to the Central Contact Office of the Tax and Financial Control Administration (APEH), and the validity of Community tax numbers may be checked on the European Commission website via the VIES system, while Hungarian tax numbers may be checked on the APEH website.
The taxation process starts with the taxpayer’s registration, during which the tax authority registers the taxpayer and issues him with 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 insurance contributions, health insurance contributions and labour market contributions every month, 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, a permit from the competent regional jobcentre for the place of employment is required for employment, although there are exceptions. At the same time, there are different rules that apply to certain nationals of EU/EEA Member States and to Swiss nationals.
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.
Check also the legislation on this topic in: