Corporate income tax rate9%Branch tax rate9%Minimum taxApplied to 2% of adjusted gross profitCapital gains tax rate9%Tax basisWorldwide incomeParticipation exemptionYesLoss reliefCarryforward: Indefinite, but limitations applyCarryback: Generally not availableDouble taxation reliefYesTax consolidationFor VAT purposesTransfer pricing rulesYesThin capitalization rulesYes (ratio 3:1)Controlled foreign corp. rulesYesTax yearCalendar year,but different fiscal year may be electedAdvance payment of taxMonthly/quarterlyReturn due dateLast day of the fifth monthfollowing of the end of the fiscal yearWithholding taxDividends: 0%Interest: 0%Royalties: 0%Branch remittance tax: 0%Social security contributions13% of gross wages for the employer(from 2022)Capital taxNoBuilding tax/land taxMay apply at municipal levelReal estate transfer tax4% up to a value of HUF 1bn (€3.3 million) and 2% on the excess, capped at HUF 200 million (€0.65 million)Local business taxmaximum 2% of net sales revenueInnovation contribution0.3%Financial transaction tax0.3% of transferred amountmaximum HUF 6000 (€20)VAT27% (standard), 18%, 5%Hungary quick tax facts for Individuals (2017), Source: Deloitte.Income tax rate15%Capital gains tax rate15%Tax basisWorldwide incomeDouble taxation reliefYesTax yearCalendar yearReturn due date20 May(Tax authority prepares it electronicallyto everyone automatically)Withholding taxDividends: 15%Interest: 15%Royalties: 15%Healthcare contribution14% or 22% on some incomemaximum annual HUF 450 000 (€1460)Social security contributions18.5% of gross wages for the employeeNet wealth taxNoInheritance and gift tax9% or 18%Real estate taxMay apply at municipal levelVAT27% (standard), 18%, 5%
Taxation in Hungary is levied by both national and local governments. Tax revenue in Hungary stood at 38.4% of GDP in 2017. The most important revenue sources include the income tax, Social security, corporate tax and the value added tax, which are all applied at the national level. Among the total tax income the ratio of local taxes is solely 5% while the EU average is 30%.
Income tax in Hungary is levied at a flat rate of 15%. Additionally there are two others contributions levied on income, a "social security contribution" of 18.5% (that is deducted from the gross salary) and an "employer's tax" of 13% (which is not part of employee's wage, but paid by the employer). Thus the effective income tax is a flat rate of 46.5%. A tax allowance is given through a family allowance (), which is equal to the allowance multiplied by the number of "beneficiary dependent children". For one or two children the allowance is HUF 62,500 per child, for three or more HUF 206,250 per child. The allowance can be split between spouses or life partners.
In 2025, young people will be exempt from personal income tax until the age of 25, which can mean an annual maximum of HUF 1,146,000 in income tax contributions. The same relief applies to mothers under 30. Mothers who have raised or are raising at least four children and have been entitled to family allowances for a minimum of 12 years will benefit from a lifetime exemption. On 22 February 2025, the government announced that mothers with two or three children would receive a full lifetime income tax exemption.
The standard rate of value added tax is 27% as of January 2012 — the highest in the European Union. There is a reduced rate of 5% for most medicines and some food products, and a reduced rate of 18% for internet connections, restaurants and catering, dairy and bakery products, hotel services and admission to short-term open-air events.
In January 2017, corporate tax was unified at a rate of 9% — the lowest in the European Union. Dividends received are not subject to taxation, provided that are not received from a Controlled Foreign Company (CFC). Capital gains are included in corporate tax, with certain exemptions.
Capital gains are taxed at a flat rate of 15%.
History After the Ottoman conquest of central parts of Hungary, the most common tax was the Ottoman administration's levy on Christians the dhimmi. Under Austro-Hungarian rule, taxes were mostly levied by Austria, but Hungary was later given more financial autonomy in the Austro-Hungarian Compromise of 1867. In 1988, liberalization of the Soviet-influenced Kádár government introduced tax reform, establishing a comprehensive tax system of central and local taxes, consisting mainly of a personal income tax, a corporate income tax and a value added tax.
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