Hungary taxes residents on worldwide income and non-residents on Hungary-source income only. Hungary operates a self-assessment system for most taxpayers, with the National Tax and Customs Administration (NAV) conducting post-filing review.
The Hungarian tax year is generally the calendar year (though a different fiscal year may be elected). The corporate return due date is the last day of the fifth month following the end of the fiscal year.
Hungary's headline corporate income tax (CIT) rate is 9%.
The headline personal income tax (PIT) rate is 15%.
The standard VAT/GST (or equivalent consumption tax) rate is 27%.
Hungarian residency turns on citizenship/status categories combined with presence or connection tests: Hungarian citizens (with narrow dual-citizenship exceptions), EEA nationals present 183+ days in a calendar year, and third-country nationals with permanent settlement status or stateless persons are automatically resident. Others are resident if their sole permanent home is in Hungary, or - where they have homes in multiple countries or none - if their center of vital interests is in Hungary, falling back to habitual abode (typically evidenced by 183+ days present) if vital interests cannot be determined. Residents are taxed on worldwide income at a flat 15% rate; non-residents only on Hungary-source income, also at 15%.
A non-Hungarian entity has a Hungarian permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Hungary on the entity's behalf, following the OECD Model Treaty definition as applied under Hungarian domestic law and any applicable tax treaty.
Hungary's CFC regime (effective since January 1, 2019, implementing EU ATAD) treats a foreign entity as a CFC where a Hungarian taxpayer, alone or with related parties, holds more than 50% of voting rights, capital, or profit entitlement, and the foreign entity's effective tax burden is less than half the Hungarian corporate tax that would apply to the same income. Passive-type income (interest, royalties, dividends, and similar) earned by the CFC is included in the Hungarian taxpayer's tax base. The regime does not apply where the taxpayer can demonstrate the foreign entity's income arises from genuine arrangements not aimed at tax evasion. Dividends received from a CFC can be exempted from January 1, 2021 onward to the extent linked to the CFC's genuine arrangements.
Since 2019 (implementing ATAD Article 4), Hungary caps deductible net financing costs at the greater of 30% of tax-EBITDA or approximately EUR 3 million (HUF 939.81 million at the reference exchange rate); excess costs are added back to the tax base, with unused interest capacity carried forward up to five years. A grandfather rule allows the pre-2019 3:1 debt-to-equity thin capitalization approach to continue applying to non-bank loans concluded before June 17, 2016 and not since modified, at the taxpayer's election.
Hungary does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Hungary has implemented ATAD2-aligned anti-hybrid rules denying deductions for payments producing a hybrid mismatch outcome.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Hungary provides a participation exemption for qualifying dividends and capital gains from reported (registered) shareholdings held for a continuous minimum 1-year period, with no minimum ownership percentage threshold for the capital gains exemption specifically once the reporting and holding-period conditions are met.
Hungary has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Hungary, capped at the Hungarian tax otherwise due on that income.
Hungary maintains an extensive treaty network of more than 80 countries (84 per one source). Notably, Hungary has no comprehensive income tax treaty with the United States. Russia has suspended its side of the Hungary treaty, though Hungary continues to apply it from its own side - confirm current mutual status before relying on Russia-Hungary treaty relief.