Taxes in Hungary

Hungary's tax system is straightforward and competitive, with flat rates that attract entrepreneurs and businesses.

Personal Income Tax

Flat rate: 15% on all income types:

Employment wages
Freelance/self-employment income
Investment income
Capital gains
Rental income

This applies to both residents and non-residents on Hungarian-source income.

Social Security Contributions

Contribution	Rate	Who Pays
Social security	18.5%	Employee (from gross)
Employer's tax	13%	Employer
Total employment cost	~46.5%	Combined

Effective tax on employment:

Gross salary: 100%
Income tax: 15%
Social security: 18.5%
Net salary: ~66.5%

Tax Residency

You're a Hungarian tax resident if:

You have permanent residence in Hungary
You spend 183+ days in Hungary per year
Your center of vital interests is in Hungary

Residents: Taxed on worldwide income

Non-residents: Taxed only on Hungarian-source income

Corporate Tax

Flat rate: 9% - One of the lowest in the EU

This applies to:

Limited liability companies (Kft)
Public limited companies (Nyrt)
Branches of foreign companies

Special Tax Regimes for Entrepreneurs

KATA (Small Taxpayer's Itemized Tax)

Fixed monthly fee replaces income tax and social security
For small entrepreneurs with limited revenue
Very popular with freelancers

KIVA (Small Business Tax)

10% flat rate on cash flow
Replaces corporate tax and social contributions
For SMEs up to certain thresholds

Flat-Rate Taxation

For self-employed under revenue limits
2026 limit: ~€100,000 annual revenue
Simplified accounting and filing

VAT (ÁFA)

Rate	Applies To
27%	Standard rate (most goods/services)
18%	Accommodation, catering
5%	Basic food, medicines, books

Note: Hungary has the EU's highest standard VAT rate at 27%.

Important Deadlines

Annual tax return: May 20 of following year
Quarterly payments: For advance tax (if applicable)
Monthly reporting: For employers

For Digital Nomads (White Card)

Tax situation is complex:

Income from foreign employers typically not taxed in Hungary
Depends on tax treaty with your home country
May need to file in home country
Strongly recommend consulting a tax professional

Double Tax Treaties

Hungary has treaties with 80+ countries including:

USA, UK, Germany, France, Netherlands
Most EU countries
Japan, South Korea, China, India

These prevent double taxation and may reduce withholding taxes.

Tax Incentives

No wealth tax
No inheritance tax (for close relatives)
R&D tax credits for companies
Development tax benefits for investments

Pro Tips

•Flat 15% rate applies to all income types - no brackets
•9% corporate tax makes Hungary attractive for business
•KATA regime popular for freelancers - fixed monthly fee
•Digital nomads should clarify tax status with professional
•VAT at 27% is high - factor into business pricing

Taxes