Personal Tax in Hungary
- Tax Base For Residents and Non-Residents
- Individuals in Hungary are subject to a variety of taxes, including the personal income tax, social security contributions, real estate taxes, and inheritance and gift taxes. Residents are subject to tax on their worldwide income, and non-resident individuals are subject to personal income tax only on their Hungarian-source income (including income from employment, business activities or real-property transactions in Hungary).
|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|Healthcare contribution applies on income withdrawn from a business, dividends, income from securities lending, capital gains and income exceeding HUF 1m from renting out real property.||14%|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).
- Capital Tax Rate
- In principle, gains from the sale of immovable property or other rights with a pecuniary value are subject to tax at a rate of 25%. Tax exemptions exist for gains derived from the disposal of immovable property used to finance the purchase of a new home and where the property has been held for at least 15 years. Income from the rental of real property is taxed at a flat 25% rate (that is, it is not combined with the taxable base).
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