Last updated: October 2026
Municipalities are funded partly by local taxes and partly by transfers from the central budget. Each municipality decides by local decree which local taxes it levies, and at what rates, within the limits set by the Local Taxes Act. The most important local taxes for businesses are summarised below.
Local business tax (iparűzési adó)
Businesses that carry on business activities in a municipality, through a permanent establishment or temporarily, are subject to local business tax.
Tax base
The tax base is net sales revenue minus the following items:
- cost of goods sold
- value of intermediated services
- subcontractors’ services
- material costs
- direct R&D costs
Personnel costs, other services used, depreciation and financial expenses cannot be deducted. For businesses with net revenue above HUF 500 million, the combined deduction for cost of goods sold and intermediated services is capped at 85% to 70% of revenue, depending on the size of the revenue. Simplified tax base methods are available to small businesses.
Tax rate
The municipality sets the rate, up to a maximum of 2% of the tax base.
Several municipalities
Businesses that have permanent establishments in several municipalities must apportion their tax base among them, using the methods prescribed by law (based on personnel costs and/or the value of fixed assets).
Temporary activities
Temporary activities, e.g. construction work, may be subject to a daily flat-rate tax of up to HUF 5,000 per day. A construction site that exists for more than 180 days in a municipality creates a permanent establishment.
Returns and payment
Advance payments are due on 16 March and 15 September. The annual return is filed with the tax authority (NAV) by 31 May of the following year.
Building tax and land tax
The municipality may levy:
- building tax on buildings in its territory, up to HUF 1,100 per m² per year or 3.6% of the adjusted market value (50% of market value)
- land tax on land in its territory, up to HUF 200 per m² per year or 3% of the adjusted market value
The per-m² maximums are base amounts that are indexed for inflation every year. For 2026, the indexed maximums are approx. HUF 3,059 per m² for building tax and approx. HUF 556 per m² for land tax.
Other local and related taxes
- tourist tax (paid per guest night)
Owners of utility pipelines and cables also pay a utility pipeline tax of HUF 125 per metre. This is a central (state) tax, not a local tax.