Expatriate tax ebook - Hungary

Facts and figures

Pre arrival procedures
Employment visas
Tax year
Tax returns and compliance
Income tax rates
Sample income tax calculation

Pre arrival procedures
The employment of expatriates is, in general, subject to a work permit, which must be obtained before taking up employment in Hungary. The managing directors of “Kft”s and members of the Board of Directors of “Rt”s are exempt. Managing directors of branch offices, "key persons" in joint ventures, who have to apply for work permits, are granted them automatically.

No work permit is needed for the citizens of EEA member states.

Employment visas
Foreign individuals should apply for an employment visa in the foreign country’s Hungarian embassy. This will entitles them to stay in Hungary for one year. If they wish to extend their stay, a residence permit need to be applied for 15 days before the visa expiry date.

The residence permit can be applied for four years in case of managing directors and can be extended every two years afterwards.

Citizens of EEA countries can stay in Hungary for a maximum of 90 days without any special permit. They are entitled to stay freely after 90 days, if they register as a resident in Hungary.

Tax year
The tax year for individuals is the calendar year - 1 January - 31 December.

Tax returns and compliance
Tax returns must be submitted by individual taxpayers by 20 May of the following year. The tax authority or the employer can be asked to prepare the tax return by submitting a declaration. Foreign individuals on assignment in Hungary have to file a tax return.

Income tax rates

In case of wage incomes in 2011, the basis of the personal income tax is the gross income increased with 27%. From 2012 the increasing rate will be 13.5% and from 2013 this rate will be cancelled.

Children allowance from the tax base is:

a) 62,500 HUF if the number of dependents is one or two
b) 206,250 HUF if the number of dependents is three or more, for each dependent per each month of eligibility.

Sample income tax calculation

Information about Hungary: