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 new EU member states joined in 2004 (but there is a registration obligation), nor for the citizens of Sweden, Ireland, the UK, Greece, Finland, Portugal, Spain and the Netherlands. On a reciprocity basis the procedure is simplified for the citizens of Belgium, Denmark, France and Luxembourg.
A work permit is not necessary for expatriates of EU member states except for Austria and Germany in certain businesses. There are also additional restrictions for Bulgaria and Romania as the last new members of the EU.

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

Sample income tax calculation

Information about Hungary: