Hungary: Tax Legislation

In order to strengthen the business climate, the Hungarian Government:

  • Created free business zones with special preferential taxes and contribution allowances.
  • Reduced the business tax in lower levels of Central and Eastern Europe (9%)
Bt. Kft. Zrt. Nyrt.
LTD: Limited LLC: Limited Liability Company Private Company Limited by Shares Public Limited Company
Legal Representative YES YES YES YES
Minimum capital NONE 3.000.000 HUF 5.000.000 HUF 20.000.000 HUF
Personal liability of the members for the obligations of the company UNLIMITED FOR THE GENERAL PARTNER NONE NONE NONE
Administrative Fee 50,000 HUF (in simplified proceedings 25,000 HUF) 100,000 HUF (in simplified proceedings 50,000 HUF) 100,000 HUF (in simplified proceedings 50,000 HUF) 500,000 HUF
Publication Fee 5,000 HUF (no fee in simplified proceedings) 5,000 (no fee in simplified proceedings) 5,000 (no fee in simplified proceedings 3,000 HUF

The corporate tax rate in Hungary is the lowest in the European Union:

The single corporate tax rate of 9% that applies since 2017 is the lowest in the European Union.
Since 2015, losses can be carried forward for the next 5 years, the losses that were created before the 2015 can be transferred until 2025.
Proof of losses can be used to reduce the tax base by 50% of the corresponding tax base, calculated without the losses that have been transferred.

Other direct taxes:

The local business tax is 2%, the contribution of innovation is 0.3%, both percentages are calculated on the adjusted gross margin.
In some areas there are additional specific taxes, e.g.

  • in the energy sector,
  • the banking sector (the amount of tax is calculated based on the total assets),
  • the telecommunications sector (telecommunications services),
  • and the tax on utilities (for owners of utilities that include provision of water, gas, heat, electricity, etc.)

In relation to the acquisition of immovable property or corporate real estate, there is a stamp duty of 4% up to a total of HUF 1 billion real estate (meaning 3.240.000 EUROS), over this threshold the rate is 2% but with a maximum of 200 million Hungarian Forints (648.000 EUR) per estate.

The standard rate of VAT is 27% reduced rate 18% have some particular species e.g. bread, milk, accommodation services and 5% items such as magazines, books, medicines and central heating.
VAT-exempt services are mainly banking services, insurance, investment services, selling and renting property, specific services provided by doctors and dentists, specific categories of education and training, and certain other exempt activities with regard to the public interest or the special character.