Taxation in Hungary

Last updated: October 2026

The Hungarian tax system is one of the most competitive in the region. Direct taxes are low by both regional and European standards. The corporate income tax rate of 9% is the lowest in the EU. Hungary’s standard VAT rate of 27%, on the other hand, is the highest in the EU.

Certain sectors (e.g. banking, retail, energy, telecommunications) are also subject to sector-specific special taxes.

International aspects

Hungary has concluded double tax treaties with around 80 countries. The treaty with the United States was terminated with effect from 1 January 2024. Hungary has implemented the EU Anti-Tax Avoidance Directive (interest limitation, CFC rules, exit taxation, general anti-abuse rule, hybrid mismatches) as well as detailed transfer pricing rules. Tax losses can be carried forward for five years, subject to certain limits.

Taxes on labour

Employees pay 15% personal income tax and an 18.5% social security contribution. Employers pay a 13% social contribution tax. Employees posted to Hungary who hold an A1 certificate (or a certificate under a social security agreement) may remain insured in their home country’s social security system. If their income is taxable in Hungary, it is still subject to the 15% Hungarian personal income tax. Details: Individual Taxation.

Digital tax administration

Hungary is a European pioneer in digital tax reporting:

• Online invoice reporting: real-time reporting of all invoices to the tax authority (NAV).
• eVAT (eÁFA): since 2024, the tax authority prepares draft VAT returns for taxpayers.
• Cash registers: online cash registers in retail.
• EKAER: the electronic road transport monitoring system.

Companies therefore need compliant systems and well-designed processes. See Value Added Tax.

Incentives

Hungary offers a number of tax incentives for certain activities and investments, e.g. the development tax allowance, R&D deductions and the development reserve. These can play an important role in investment decisions. Details: Corporate Tax.

Outlook for 2027

The government’s 2027 tax package is currently in public consultation. It includes:

• a new wealth tax for private individuals on net assets above HUF 1 billion
• an extended KATA small-taxpayer regime
• a personal income tax credit for lower incomes
• the abolition of the corporate tax allowance for donations to public-interest trust foundations (KEKVA)

The final rules may differ from the drafts. We will update this page once the legislation is adopted.