Thinking of living, working, or investing in Hungary? Understanding taxes in Hungary for foreigners is crucial to avoid surprises, stay compliant, and optimize your finances. Hungary offers a tax-friendly environment with low corporate taxes, a flat personal income tax, and various exemptions, making it appealing to expats, digital nomads, entrepreneurs, and investors.
Whether you plan to earn income locally, invest in property, or run a business, your Hungarian tax obligations depend on your residency status, income type, and asset holdings. This guide breaks down all aspects of Hungarian taxation in 2026, from income tax and corporate tax to property, inheritance, and crypto.
Taxes in Hungary: Key Takeaways
- Residency matters: 183+ days or permanent home = tax on worldwide income; non-residents taxed only on Hungary income.
- Personal tax: Flat 15%, with exemptions for pensions, government bonds, dividends (>1 year), young workers, mothers, and families.
- Corporate tax: 9%, one of the lowest in the EU; local business tax up to 2%.
- VAT: Standard 27%, reduced 18% (food, hotels), super-reduced 5% (books, medicine).
- Capital gains & property: 15%, exemptions for real estate held >5 years; inheritance tax 9–18% with family exemptions.
- Crypto: Treated as property, taxed at 15% on gains.
- Double tax treaties: Many EU & global treaties; no treaty with the USA.
- Benefits & incentives: Low corporate tax, family allowances, capital gains relief, R&D & investment incentives.
Overview of the Hungarian Tax System
| Category | Details |
|---|---|
| Tax Year | 1 January – 31 December |
| Currency | Hungarian Forint (HUF) |
| Personal Income Tax | 15% flat rate on most income; various allowances and exemptions apply |
| Corporate Tax | 9% flat rate on taxable profits; minimum tax base and local business tax may apply |
| VAT | Standard rate: 27%; reduced rates: 18% and 5% depending on goods/services |
| Social Security Contributions | Employee: 18.5%; Employer: 13% (covers health, pension, labor contributions) |
| Capital Gains Tax | 15% (plus 13% social tax in some cases) |
| Inheritance Tax | 18% standard; 9% on residential property; exemptions for direct relatives |
| Tax Authority | Hungarian National Tax and Customs Administration (NAV) |
| Tax Return Deadline | Individuals: Annual SZJA return by 20 May of the following year; Businesses: Monthly, quarterly, and annual filings depending on tax type |
Who pays tax in Hungary?
Hungary has a residency-based tax system, which means your tax obligations depend on your residency status, not your citizenship.
Tax residents:
- You are considered a Hungarian tax resident if you spend 183 days or more in Hungary within a calendar year, whether continuously or cumulatively.
- Residents are taxed on their worldwide income, including wages, investments, rental income, and foreign assets.
Non-tax residents:
- If you spend less than 183 days in Hungary, you are considered a non-resident for tax purposes.
- Non-residents only pay taxes on Hungary-sourced income, such as wages earned in Hungary or profits from local property.
Hungarian tax authorities may also consider you a tax resident if you have a:
- Permanent home in Hungary
- Center of vital interests (close family or financial ties)
Personal Tax Rates in Hungary
Hungary applies a flat 15% personal income tax (PIT) on most types of income, making it simple and predictable compared to progressive systems in many European countries.
Income subject to PIT includes:
- Domestic-source income, such as wages, salaries, and business income earned in Hungary
- Foreign-source income for tax residents, even if it is paid abroad or not transferred to Hungary
How PIT is Calculated
Hungary calculates PIT differently depending on the type of income:
- Consolidated tax base:
- Includes employment income, independent activity income (like freelance or rental income), and other general income.
- Tax allowances reduce the taxable income, offering significant savings.
- Key tax allowances for 2026:
- Family tax allowance for dependent children
- Allowances for young couples in their first marriage
- Mothers raising two or more children (phased in for mothers under 40 from 2026)
- Young people under 25
- Mothers under 30
- Personal allowances for severe disabilities
These allowances can significantly reduce PIT liability. For example, a mother under 30 raising two children could reduce her taxable income substantially, while families with multiple children may even qualify for a complete PIT exemption.
- Fringe benefits and specific allowances:
- Certain employee benefits, such as the SZÉP Card, are considered taxable.
- Employers typically pay the associated social contributions, while employees may still benefit from other allowances.
- Separately taxed income:
- Dividends, interest, capital gains, and income from the sale of movable and immovable property fall into this category.
- Long-term savings accounts are taxed depending on their duration: 15% if terminated within the first three years, 10% in years four and five, and tax-free after five years.
Hungarian PIT applies to nearly all income types, so foreign residents should carefully track allowances, benefits, and foreign income to ensure compliance and avoid overpaying.
Corporate Tax in Hungary
Hungary is known for its business-friendly tax system and one of the lowest corporate tax rates in the EU. The standard corporate tax is a flat 9% on taxable profits, making it simple and predictable for businesses of all sizes.
Key advantages
- No Withholding Tax: Dividends, interest, and royalties paid to non-residents are generally tax-free.
- Territorial Exemptions: Certain dividends and capital gains are exempt under Hungary’s territorial rules, encouraging international investment.
- Predictable Rate: The flat 9% rate applies to most companies, making financial planning straightforward.
Things to keep in mind
- Minimum Tax Base: Companies must pay at least 2% of adjusted total revenue, even if reported profits are low.
- Local Business Tax: Municipalities may levy up to 2% of turnover, which is deductible from corporate tax but varies by location.
- Loss Carry-Forwards: Net operating losses can offset future profits, though limits apply.
Incentives
Hungary encourages strategic investment with tax credits for:
- Job creation
- Regional development projects
- Environmental initiatives
Hungary’s corporate tax system is simple, low, and internationally friendly. Paying attention to minimum tax rules, local business taxes, and available incentives ensures businesses maximize the benefits of operating in Hungary.
Hungary Social Security Contributions
Both employers and employees are required to contribute to the Hungarian social security system. Here are the various rates:
| Employee | 18.5% |
| Employer | 13% |
The social contribution tax in Hungary goes towards tax revenue, including health insurance, labor market contributions, and pension contributions.
Capital Gains Tax in Hungary
Capital gains in Hungary are taxed at a flat rate of 15%. In some cases, if specific conditions aren’t met, an additional 13% social contribution may also apply.
Capital gains tax in Hungary from the sale of immovable and movable property can include:
- Personal assets (jewelry, art, vehicles, etc.)
- Real estate
- Financial assets (bonds and shares)
- Business assets (Inventory, tools, machinery)
Certain items, like real estate, may be exempt from capital gains tax if the estate is held for longer than five years. This is important to note for those looking to obtain the Hungary Golden Visa, where one of the most popular investment options includes investing in a real estate investment fund.
Property Taxes in Hungary
For those considering buying property in Hungary, the following property tax rates apply:
| Category | Details |
|---|---|
| Property Tax Type | Local property tax (ingatlanadó) |
| Tax Authority | Municipalities |
| Tax Base | Land value or building value / usable floor area |
| Building Tax | Up to 3.6% of adjusted market value or 1,100 HUF/sqm/year |
| Land Tax | Up to 3% of market value or 200 HUF/sqm/year |
| Applicability | Residential properties often exempt; triggered if used for business |
| Payment Schedule | Typically two installments: March 15 and September 15 |
| Exemptions | Many primary residences; exemptions vary by municipality |
| Notes | Rates vary locally but are capped by law |
Inheritance Tax in Hungary
Hungary charges inheritance tax on property transfers after death:
- Standard rate: 18% of net inheritance
- Reduced rate: 9% on residential property
- Exemptions:
- Direct relatives (spouse, children, parents)
- First HUF 300,000 of movable property per beneficiary
- Step or foster relatives up to HUF 20 million
Cryptocurrency Tax in Hungary
In Hungary, cryptocurrency is treated as a form of property for tax purposes, which means that transactions involving cryptocurrencies are subject to capital gains tax.
Profits from the sale or exchange of cryptocurrencies are subject to a 15% capital gains tax. This applies to any gains realized when selling or trading cryptocurrencies.
Hungary Value Added Tax (ÁFA – Általános forgalmi adó)
Hungary applies value-added tax (VAT) on most goods and services.
| Rate | Category | Examples |
|---|---|---|
| 27% | Standard VAT | Professional services, electronics, clothing, household goods |
| 18% | Reduced VAT | Basic food items, some hotel accommodations |
| 5% | Super-reduced VAT | Books, medicines, medical equipment, livestock |
Hungary VAT exemptions include:
- Healthcare services
- Education services
- Financial services
- Exports outside the EU
Hungary Double Tax Treaties
Hungary has more than 80 double taxation treaties (DTTs), most of which follow the OECD model. These agreements are designed to prevent individuals and businesses from being taxed twice on the same income, typically by allowing exemptions or credits for taxes paid abroad. The exact method of relief depends on the specific treaty. This is important to understand, particularly for those with Hungary dual citizenship.
Hungary’s double tax treaty countries include:
| Albania | Iran | Poland (inheritance) |
| Andorra | Iraq | Portugal |
| Armenia | Ireland | Qatar |
| Australia | Israel | Romania |
| Austria | Italy | Romania (inheritance) |
| Austria (bequest, inheritance) | Japan | Russian Federation[2] |
| Azerbaijan | Kazakhstan | San Marino |
| Bahrain | Kyrgyzstan | Saudi Arabia |
| Belarus[1] | Kosovo | Serbia |
| Belgium | Kuwait | Serbia (amending minutes) |
| Bosnia and Herzegovina | Kuwait (amending minutes) | Singapore |
| Brazil | Latvia | Slovak Republic |
| Bulgaria | Latvia (amending note verbal) | Slovenia |
| Canada | Liechtenstein | South Africa |
| Canada (amending minutes) | Lithuania | South Korea |
| China | Luxembourg | Spain |
| Croatia | Macedonia | Sweden |
| Cyprus | Malaysia | Sweden (inheritance) |
| Czech Republic | Malta | Switzerland |
| Denmark | Mexico | Taipei |
| Egypt | Moldova | Thailand |
| Estonia | Mongolia | Tunisia |
| Estonia (amending note verbal) | Montenegro | Türkiye |
| Finland | Morocco | Turkmenistan |
| France | Netherlands | Ukraine |
| Georgia | Norway | United Arab Emirates |
| Germany | Oman | United Kingdom |
| Greece | Pakistan | Uruguay |
| Hong Kong | Pakistan (amending note verbal) | Uzbekistan |
| Iceland | Philippines | Uzbekistan (amending minutes) |
| India | Poland | Viet Nam |
| Indonesia | Poland (amending minutes) |
Important to note: Hungary’s double taxation treaty with the United States was terminated on 1 January 2024.
International Taxes in Hungary
As businesses and individuals operate increasingly across borders, Hungary has established rules to determine how income earned abroad is taxed. These international tax rules help define when and how foreign income is subject to Hungarian taxation, ensuring clarity for both residents and companies with cross-border activities.
Hungary’s network of Double Taxation Treaties (DTTs) is designed to prevent the same income from being taxed twice—once in Hungary and once abroad. These treaties often provide mechanisms such as tax exemptions, credits for foreign taxes paid, or reduced withholding taxes on dividends, interest, and royalties.
How to Pay Taxes in Hungary
Paying taxes in Hungary is straightforward once you know the steps. Both individuals and businesses must register, file returns, and pay through the appropriate channels, often using Hungary’s online systems.
- Step 1: Register for a Tax ID: All businesses and individuals need a tax identification number from the Hungarian National Tax and Customs Administration (NAV/NTCA). For individuals starting work in Hungary, registration is usually automatic. Foreign residents must apply for a tax card.
- Step 2: Access online portals: Use the Ügyfélkapu (Client Gate) to access online systems like EFER (Electronic Payment and Settlement System) and ONYA, which allow you to pay personal taxes via bank card, set up payment packages, and track filings. Luckily, there is a range of banks in Hungary to choose from.
- Step 3: Maintain accurate records: Keep detailed records of income, expenses, and invoices throughout the year. This is vital for both individuals and businesses to ensure accurate tax filings.
- Step 4: File your tax return
- Individuals: File the annual SZJA tax return (for example, form 25SZJA for 2025 income) by May 20th of the following year. If your income comes solely from domestic sources, NAV may provide a draft return for approval.
- Businesses: File corporate and VAT returns monthly, quarterly, or annually, depending on the type of tax and business activity.
- Step 5: Pay taxes: Hungary taxes can be paid:
- Online via EFER using a bank card or payment package
- Bank transfer to NAV/NTCA accounts
- In person at NAV offices
Payroll taxes for employees are generally handled automatically by the employer, but individuals are responsible for any additional income (e.g., freelance work, rental income). If you’re thinking of living in Hungary, working with a Hungarian immigration lawyer is highly recommended. Not only can they assist with your application, but they often have knowledge of how taxes work for certain nationalities.
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