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How much will taxation cost?

Hungary offers you a more than attractive, 9% flat rate of annual corporate tax rate, which is one of the lowest among EU jurisdictions.

How much will taxation cost? How much will taxation cost?

Alternatively, you may opt for a flat amount taxation, called shortly as ‘KATA’: that is available up to twelve million HUF yearly income, and requires only 50.000-forint flat amount tax payment, which includes all payroll taxes and corporate tax as well. This option is available for the limited partnership company form, called ‘betéti társaság’ BT.

Otherwise, payroll and taxes are due after the executive officer of the company, unless:

  • the executive has or will have a company registration and an active national insurance coverage in an EU jurisdiction;
  • the executive has active undergraduate status at any Hungarian University or College
  • the executive has national insurance coverage in Hungary with another employer, under a work contract exceeding 35 hours weekly
  • (…)

Payroll taxes consist of the flat rate of 15% personal income tax, social, healthcare insurance and other contribution taxes, totaling of at least approx. 280 EUR* per months. * the equivalent of the payroll items monthly total, depending on the current exchange rate.

Due to the current pandemic situation, the government has introduced a temporary exemption on payroll taxes: in the fields of tourism, catering, the entertainment industry, sport, cultural services and passenger transport. In these sectors employers’ contributions were reduced to zero, and employees’ contributions were also significantly reduced: they are not required to pay pension contributions, and their health insurance contributions were reduced to the statutory minimum. At present, these measures are planned to remain in place until 30 June.

Regarding VAT, the general rate is 27%. However, certain services such as dining, hotel service and (…) have a 5% rate. Interborder transactions may be exempt of VAT under EU legislation, in such cases the applicable rate will be zero.