Taxes - Accounting

Hungary

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Tax Rates | Accounting Rules

Tax Rates

Consumption taxes

Nature of the tax: ÁFA : Általános Forgalmi Adó
Tax rate: 27%
Reduced tax rate: A 5% rate applies to pharmaceuticals and certain medical equipment, aids for the blind, books and newspapers. A 18% rate applies to hotel and basic foods.
Other consumption taxes: Excise tax is levied on items such as alcoholic beverages, petrol and tobacco products.

Corporate taxes

Tax rate

Resident companies are subject to taxation on their worldwide income.	The standard rate is 19%. For income below HUF 250 million, rate is 10%.
Resident companies	Domestic and foreign dividends are exempt from corporate tax unless the dividend comes from a controlled foreign company.
Non-resident companies	Taxed on all income derived through activities in Hungary.

Tax rate for foreign companies: For information on tax consumption for resident and non residents access the Report of the European Commission on VAT in Hungary.
Capital gains taxation: Capital gains are included in the corporate tax base and taxed at a rate of 19%; capital gains of foreign companies with no PE in Hungary are tax-exempt.
Main allowable deductions and tax credit: All expenses incurred in deriving taxable business income generally may be deducted.
Corporate taxpayers can deduct 50% of total capital gains derived from any official markets (for instance stock and commodity exchanges), royalties, net intra-group interest income, and 50% of net trading income on greenhouse gas emission units from their tax base. Dividends received (except for dividends from controlled foreign corporations), revenue derived due to cancelled receivables and debts, and subsidies provided by foreign entities are tax-exempt.
Other corporate taxes: Simplified regime available for small businesses: Self-employed entrepreneurs and small enterprises that have been in business for at least two years and have annual revenue of less than HUF 25m can choose to be taxed under the Simplified Entrepreneur Tax (EVA).
Local business tax: The local municipalities may levy business taxes up to 2% on gross sales revenue, less the cost of goods acquired for resale, subcontractors’ fees and the cost of materials.
Solidarity tax (surtax): levied at a rate of 4% on company profits. The tax does not apply to foreign-source dividend and interest income.
Crisis tax: tax on the energy, retail and telecommunications companies.

Individual taxes

Tax rate

A flat rate is effective for income tax	16%
Solidarity tax. This tax must be paid on annual income in excess of 7,446,000 HUF in 2007, which means that the total tax burden is 40% above this amount.	4%
Benefits in kind that are not tax-exempt are taxed separately	54%
On dividends on shares purchased on the stock exchange	10%
On dividends received by individuals.	25% or 35%
Healthcare contribution applies on income withdrawn from a business, dividends, income from securities lending, capital gains and income exceeding HUF 1m from renting out real property.	14%

Allowable deductions and tax credit: Tax deductions are allowed as school fees, interests paid annually for the purchase of a house, and sums paid to charity sales.
Special expatriate tax regime: Yes. It concerns especially health insurance and complementary retirement pension contributions. The requirements to obtain a residence permit depend on whether the applicant is a citizen of a country within or outside the European Economic Area (EEA).

Double taxation treaties

Countries with whom a double taxation treaty have been signed: See the list of Hungarian Double Taxation Prevention Treaties
Withholding taxes: Dividends: 0/16 ; Interest: 0/16 ; Royalties: 0/15
Bilateral agreement: Hungary and Tunisia are bound by a double taxation treaty: no

Signed	Ratified	Enforced

Pour aller plus loin dans vos recherches nous vous proposons de connaître les taxes locales connaître les taxes locales qui s'appliquent à votre produit.

Sources of fiscal information

Tax Authorities: APEH
Other domestic resources: LowTax.Net on Hungary
Pénzügy Sziget

Accounting Rules

Tax year: The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting standards: Hungarian Accounting Standards are currently set by the Ministry of Finance and are incorporated in the Act on Accounting. The Act on Accounting includes very detailed accounting requirements based on the Fourth and Seventh EU Company Law Directives and IFRS.
Accounting regulation bodies: Hungarian Chamber of Auditors
PSZÁF
Accounting reports: The balance sheet is presented into accounts with liabilities composed of constant capital and debts, because there is a distinction between long and short-term debts. The profit and loss account gives priority to the repository of the global production and lets the choice of the cost classification either by nature or by function.
Publication requirements: Companies have to produce a balance sheet, a profit and loss account and an appendix. Publications are annual.
Professional accountancy bodies: Accounting & Bookkeeping
Certification and auditing: The external control of the accounts must be given to a body of external auditors chosen by the company. Access the Chamber of Hungarian AuditorsChamber of Hungarian Auditors
Accounting news: Tax and accounting law - only available in Hungarian