Project Description

Taxation in Hungary is levied by both federal and local governments.

For support to Hungarian companies and individuals wishing to operate or work in the UK please visit our associated Hungarian company Faktor20 Kft at www.faktor20.com where our specific services are listed in both English and Hungarian.

HUNGARIAN TAXES

Income tax Hungary is levied at a flat rate of 16%. 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 and second dependent children the allowance is HUF 62,500, while in case of 3 or more children the allowance is HUF 206,250 per beneficiary dependent child. 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, 2012. There is a reduced rate of 5 percent for the sale of most medicines. A reduced rate of 18 percent is applicable to dairy and bakery products and hotel services and admission to short-term open-air events.
From January 2011, under the new Corporate income tax regime, the tax rate was divided into two parts: (i) For corporations having income before tax below 500 million HUF the rate was lowered to 10%, and (ii) the 16% rate remained unchanged for all other companies until 2013. After this, the unified corporate income tax rate will be 10%, irrespectively from the size of the net income before tax. Before the new Corporate income tax regime, the Corporate tax was fixed at 16% of the positive rateable value, with an additional tax called solidarity tax of 4%, the measure of which is calculated based on the result before tax of the company (the solidarity tax has been in use since September, 2006). The actual rateable value might be different is the two cases.
Employment income is subject to social security contributions, for the employer at a flat rate of 27% Further more employers pay 1.5% into a training fund. Capital gains is taxed at a flat rate of 16%