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Taxation in Hungary

taxation in hungary map, taxation in hungary capital
Taxation in Hungary is levied by both federal and local governments Tax revenue in Hungary stood at 393% of GDP2 The most important revenue sources include the income tax, Social security, corporate tax and the value added tax, which are all applied on the federal level Among the total tax income the ratio of local taxes is solely 5% while the EU average is 30%3

Income tax in Hungary is levied at a flat rate of 15%4 A tax allowance is given through a family allowance családi adókedvezmény, which is equal to the allowance multiplied by the number of “beneficiary dependent children” For the first children the allowance is HUF 66,670, while the second dependent children the allowance is HUF 100,000, in case of 3 or more children the allowance is HUF 220,000 per beneficiary dependent child5 The amount of tax allowance can be split between spouses or life partners

The rate of value added tax in Hungary is 27% as standard rate, the highest in Europe, since 1 of January, 20126 There is a reduced rate of 5 percent for the sale of most medicines and some food products A reduced rate of 18 percent is applicable to internet connections, restaurants and catering, dairy and bakery products and hotel services and admission to short-term open-air events7

From January 2017, under the new Corporate income tax regime, the corporate tax in Hungary is unified at a tax rate of 9% – the lowest within the European Union8 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 exemptions9

Employment income is subject to social security contributions, for the employer at a flat rate of 22%10 Further more employers pay 15% into a training fund11 Capital gains is taxed at a flat rate of 15%12


Taxation in Hungary has varied over historical governments After the Ottoman conquest of central parts of Hungary, the most common tax was the Ottoman administration's levy on Christians the dhimmi During the time of Austria-Hungary, taxes was most of the time levied by the Austrian authorizes, but Hungary was later given more authority over its finances This was largerly granted to Hungary in the compromise in 1867 with the Habsburgs13 In 1988 under the soviet Kádár governments liberalization under, a reform of taxes introduced a comprehensive tax system which mainly consists of central and local taxes, including a personal income tax, a corporate income tax and a value added tax14


  1. ^ a b "Taxation and Investment in Hungary rates are updated to 2017" PDF Retrieved 29 May 2017 
  2. ^ "EU tax GDP" 
  3. ^ "Adózás Taxation" in Hungarian Retrieved 18 January 2010 
  4. ^ "TMF Group Income tax Hungary" 
  5. ^ "Family Allowance 2014" 
  6. ^ "Deloitte Tax News » Hungary: Corporate Income Tax and VAT changes 2012" Deloittetaxat 1 January 2012 Retrieved 2 April 2012 
  7. ^ "VAT 2014 KPMG" 
  8. ^ "Hungary to offer EU’s lowest corporate tax rate" 
  9. ^ "Residency and Incorporation in Hungary - Flag Theory" flagtheorycom Retrieved 2017-04-20 
  10. ^ PDF https://wwwps-bpocom/wp-content/uploads/ps-hu-newsletter-changes-of-taxation-hungary-2017-16122016-webpdf  Missing or empty |title= help
  11. ^ "Training fund levy" PDF 
  12. ^ "Capital gains tax" 
  13. ^ "Nationalism in Hungary" 
  14. ^ Mihály Hőgye "Reflection on the Hungarian Tax System and Reform Steps" PDF Retrieved 18 January 2010 

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Taxation in Hungary

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