← Back to Blog
The Hungarian Tax System Explained for Foreigners
Hungary's tax system can look confusing at first, especially if you're coming from a different country's system. Here's the plain-English overview.
The main taxes your business will encounter
- Personal income tax (SZJA) — applies to sole proprietors on their business income
- Corporate tax (TAO) — applies to Kft. and Bt. profits, at a notably low rate by EU standards
- VAT (ÁFA) — a consumption tax added to most goods and services
- Social contribution tax and payroll contributions — apply if you have employees, and to some extent to yourself as an owner
- Local business tax (HIPA) — a municipal tax based on your business's revenue
Simplified regimes worth knowing about
Hungary also offers simplified tax regimes for smaller businesses (like KATA and flat-rate/átalányadó taxation) that reduce paperwork significantly — though these come with their own eligibility rules and limits.
Good to know: Hungary has one of the lowest corporate tax rates in the EU, which makes the Kft. structure attractive once your business scales beyond a certain size.
Filing frequency
Depending on your structure and turnover, you may file VAT monthly, quarterly, or annually, and income/corporate tax annually with quarterly advance payments.
Where to go for help
The Hungarian Tax Authority (NAV) is the central body overseeing all of this — but navigating their systems in a foreign language can be its own challenge. That's exactly where we come in.