Annual Reporting and Audit Requirements for Hungarian Companies

• Posted by mason creed Feb 8 Filed in Arts & Culture #Annual Reporting and Audit Requirements  62 views
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  A practical guide for foreign business owners

  Running a company in Hungary comes with several ongoing compliance obligations, and annual reporting is one of the most important among them. For foreign-owned Hungarian companies, understanding local <a href="https://firmaxhungary.com/services/accounting-bookkeeping-hungary/">accounting</a>, reporting deadlines, and audit requirements is essential to avoid penalties and ensure smooth business operations.

  Hungary offers a transparent and well-regulated corporate environment, but the system may seem complex at first glance especially for entrepreneurs who are not physically present in the country. This article provides a clear overview of annual reporting and audit obligations for Hungarian companies, with a particular focus on foreign owners.

  What is annual reporting in Hungary?

  Every Hungarian company is required to prepare and submit an annual financial statement (“annual report&rdquofor each business year. This report reflects the company’s financial position, performance, and key accounting data and must comply with Hungarian accounting standards.

  The annual report typically includes:

  • Balance sheet
  • Profit and loss statement
  • Supplementary notes
  • Business report (in certain cases)

  The financial year usually corresponds to the calendar year, although companies may choose a different business year under specific conditions.

  Who is required to prepare an annual report?

  All Hungarian legal entities including limited liability companies (Kft.), private limited companies (Zrt.), and branches of foreign companies—must prepare an annual report, regardless of whether they had active operations during the year.

  Even companies with:

  • No revenue
  • No employees
  • Minimal activity

  are still required to submit a financial statement. “Dormant” status does not exempt a company from reporting obligations.

  Key deadlines you must not miss

  The standard deadline for submitting the annual report in Hungary is:

  May 31 of the year following the financial year.

  By this date, the company must:

  1. Finalize the annual financial statement
  2. Approve it at shareholder or owner level
  3. Submit it electronically to the Hungarian authorities

  Missing this deadline can result in late fees, penalties, and increased scrutiny from tax authorities.

  Where and how is the annual report submitted?

  Hungarian companies must file their annual report through the electronic reporting system operated by the Ministry of Justice. Once submitted, the report becomes publicly available via the Hungarian Company Information Service.

  The submission is done electronically and must be handled by:

  • A Hungarian accountant, or
  • An authorized local service provider

  Foreign owners cannot usually submit reports on their own without proper local representation or authorization.

  <a href="https://firmaxhungary.com/services/audit-services-in-hungary/">Audit</a> requirements: who needs an audit?

  Not all Hungarian companies are subject to a statutory audit. Audit obligations depend on company size and financial thresholds.

  A Hungarian company is generally required to appoint a statutory auditor if, in two consecutive financial years:

  • Net sales revenue exceeds HUF 300 million, or
  • The average number of employees exceeds 50

  Certain company types (such as financial institutions or specific regulated entities) may be subject to mandatory audit regardless of size.

  What does a statutory audit involve?

  A statutory audit in Hungary involves an independent auditor reviewing:

  • The accuracy of financial statements
  • Compliance with Hungarian accounting laws
  • Consistency between accounting records and reported data

  The auditor issues an audit opinion, which becomes part of the annual report. Without a valid audit report (when required), the annual report cannot be lawfully approved or submitted.

  Common challenges for foreign-owned companies

  Foreign entrepreneurs often face difficulties with Hungarian annual reporting due to:

  • Language barriers
  • Differences between Hungarian and international accounting standards
  • Lack of familiarity with local deadlines
  • Incomplete documentation

  One common mistake is assuming that accounting rules are identical to those in other EU countries. While Hungary follows EU directives, local regulations and reporting formats are specific and strictly enforced.

  Penalties and consequences of non-compliance

  Failure to comply with annual reporting and audit requirements can lead to:

  • Late filing penalties
  • Tax authority inspections
  • Suspension of tax numbers
  • Forced dissolution proceedings in extreme cases

  Hungarian authorities place strong emphasis on formal compliance, even if no tax loss has occurred.

  Why local expertise matters

  Annual reporting in Hungary is not just an administrative task—it is a legal obligation that requires local knowledge, precision, and experience. Working with a full-service provider who handles accounting, reporting, and audit coordination under one roof significantly reduces risk.

  Professional support ensures that:

  • Financial statements are prepared accurately
  • Deadlines are met
  • Audit processes run smoothly
  • Communication with authorities is handled correctly