Earlier on Monday (AEST), it was reported by Dutch outlets De Telegraaf and Nu that fans arriving for the game in Budapest were having their rainbow flags – a sign of support and pride for the LGBTQ community – confiscated by security guards on the instruction of UEFA.
Hungary has recently faced criticism over its treatment of LGBTQ communities after passing a law that prohibits the sharing of content in schools that could be deemed to promote homosexuality or gender change.
Germany had hoped to underline opposition to that decision when they faced Hungary in their final group-stage game by lighting up Munich's Allianz Arena in rainbow colours, but were blocked from doing so.
However, UEFA insisted any attempted suppression ahead of Sunday's quarter-final in the Hungarian capital would not have been decided upon by Europe's football governing body.
UEFA pointed out local authorities were responsible for areas such as fan parks, and said any rainbow flags should be welcomed.
A statement read: "UEFA had earlier today informed the Hungarian Football Federation that rainbow-coloured symbols are not political and that in line with UEFA’s Equal Game campaign which aims at fighting against any type of discrimination, including against the LGBTQI+ community, such flags will be allowed into the stadium.
"Contrary to some reports in Dutch media, UEFA would like to clarify that it has not banned any rainbow-coloured symbols from the fan zone in Budapest and that the fan zone is under the responsibility of the local authorities. UEFA on the contrary would very much welcome any such symbol into the fan zone."
Netherlands captain Georginio Wijnaldum outlined he would wear a rainbow-coloured captain's armband for his side's last-16 meeting with the Czech Republic.
He also threatened to walk off the field should he or any of his team-mates be subjected to abuse, after reports of players facing homophobic and racist taunts during games held in Budapest during Euro 2020.