Taxes and Accounting in Hungary
Accounting (0) , Consumption/VAT/Sales Tax (1) , Corporate Tax (0) , International Tax Treaties (0) , Personal Tax (0)
Overview by Globlatrade.net:
- 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
- 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
- Nature of the Tax
- ÁFA : Általános Forgalmi Adó
- Tax Rate
- 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.
- Company Tax
- The standard rate is 19%. For income below HUF 250 million, rate is 10%.
- 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.
|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: 10/25%-35%, Interest: 0% (30% if no tax treaty), Royalties: 0% (30% if no tax treaty)
- National Organizations
- Magyar Szabadalmi Hivatal (Hungarian Patent Office).
- Regional Organizations
European patent policy
World Intellectual Property Organization
- International Membership
Member of the
WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
National Regulation and International Agreements
|Type of property and law||Validity||International Agreements Signed|
year 1995. XXXIII. chapter XIV/C. paragraphs 115/D-115/L year 2006. law LVII.
|Patents are protected for 20 years from the date of filing the patent application; an annual fee is required to maintain the patent.|| Patent Cooperation Treaty (PCT)
Year 1997. law XI.
|Trademark protection is granted for ten years,
may be extended by additional ten-year periods.
| Trademark law treaty
Protocol relating to the Madrid Agreement
Gouvernment decree 266/2001. (XII. 21.) .
|Valid for 25 years renewable once.|
year 1995. law XXXIII.
Gov decree 156/1999. (XI. 3.)
|70 years after the death of its creator for patrimonial rights
50 years for the first publication and registration rights
| Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Act No. XLVIII of 2001 on the Legal Protection of Designs
|Industrial designs are protected for five years from the date of application can be extended up to a maximum of 25 years.|
- Independence of Justice
- Hungary has a three-tiered, independent judiciary in addition to the Supreme Court and a Constitutional Court. The constitution guarantees equality before the law, and courts are generally fair. Limited budget resources leave the system vulnerable to outside influence, but court funding is being improved, as required by EU membership.
- Equal Treatment of Nationals and Foreigners
- The Hungarian Republic assures to all foreigners staying on his territory human and civil rights without discrimination based on race, skin color, sex, language, religion, political opinion, national or social origin, fortune, or any other issue.
Hungary implemented a legal rights protection network in 2001 to provide legal aid to the Roma community and passed an antidiscrimination law that was introduced in 2003 as a requirement of EU membership.
- The Language of Justice
- Hungarian is the official language used in court procedures. However the law forbids any discrimination based on the language. Thus in case of a penal procedure each person has the right to use his / hers mother tongue in oral and in writing. Moreover the use of a defense attorney is compulsory if the defender has an insufficient level of Hungarian.
- Recourse to an Interpreter
- The services of an interpreter have to be offered if person whose mother tongue is not Hungarian stands in front of a court. The Hungarian State has to take in charge the interpreter expenses risen by the incapacity of the accused person to understand the Hungarian.
- Sources of the Law and Legal Similarities
- The sources of Hungarian law are the Acts of Parliament, governmental and ministerial decrees, which are valid only if published in the Official Gazette, and decrees of local governments. The legal system of the Republic of Hungary accepts the universally recognized rules and regulations of international law, and shall harmonize the internal laws and statutes of the country with the obligations assumed under international law.
- Checking National Laws Online
Archive of the Parliament - requires registration
- National Standards Organizations
Hungarian Standards Institution
- Integration in the International Standards Network
- Many standards in the EU, thus Hungary are adopted from international standards bodies such as the
International Standards Organization.
The drafting of specific EU standards is handled by three European standards organizations: CENELEC, ETSI, CEN.
Hungary is a full member of International Electrotechnical Commission and International Communication Union.
- Classification of Standards
- MSZ: Hungarian Standard
CE: European Standard
- Online Consultation of Standards
- Hungarian Standards Institution
- Certification Organizations
Hungarian Standards Institution
- General Information
Kwin essential guide
- Opening Hours and Days
- Normal business hours are from 8:00 a.m. to 5:00 p.m. Businesses and government offices often close in the early afternoon on Fridays.
Shops are open 7 days a week from 9/10 am till 7/9 pm. Some branches of post office also tend to be open at least on Saturday
|New Year||January 1st|
|Revolution for independence||March 15|
|Easter Monday||March or April|
|Labor Day||May 1st|
|Pentecot Monday||August 20|
|Saint - Steffen and celebration of the constitution||October 23|
|Holiday of the Republic||November 1|
|Christmas||December 25 and 26|
- Holiday Compensation
- Sometimes if a national holidays fall on a Tuesday or Thursday the Saturday before or after is a working day in order to have a free Monday or Friday.
Periods When Companies Usually Close
|End of the year holidays||22/23 December - 2/3 January|
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