Individual - Foreign tax relief and tax treaties

Last reviewed - 24 January 2024

Foreign tax relief

If a DTT does not apply, Hungarian residents are also taxed on foreign-source employment income, but credit is given for foreign taxes paid. The credit may neither exceed 90% of the foreign tax paid abroad nor the Hungarian PIT calculated with the Hungarian tax rate on the foreign income.

Individuals have to make quarterly tax advance payments calculated on the gross income they receive from abroad if they become subject to taxation in Hungary (e.g. they perform their activities in Hungary). 

In the case of income from investments or the sale of property, if the income is foreign sourced, the foreign tax may be fully deducted from the Hungarian tax burden; however, at least 5% Hungarian tax needs to be paid in the absence of a DTT. Where DTTs apply, they usually provide an exemption, rather than credit, for foreign taxes. In the cases of dividend, the DTTs usually apply the credit method.

Tax treaties

Double tax treaties (DTTs)

Currently Hungary has DTTs with the following countries:

Albania Iran Qatar
Andorra Ireland Romania
Armenia Israel Russia
Australia Italy San Marino
Austria Japan Saudi Arabia
Azerbaijan Kazahstan Serbia
Bahrain Kyrgyzstan Singapore
Belarus Korea Slovak Republic
Belgium Kosovo Slovenia
Bosnia and Herzegovina Kuwait South Africa
Brazil Latvia Spain
Bulgaria Liechtenstein Sweden
Canada Lithuania Switzerland
China Luxembourg Taipei
Croatia Macedonia Taiwan
Cyprus Malaysia Thailand
Czech Republic Malta Tunisia
Denmark Mexico Turkey
Egypt Moldova Turkmenistan
Estonia Mongolia Ukraine
Finland Montenegro United Arab Emirates
France Morocco United Kingdom
Georgia Netherlands Uruguay
Germany Norway Uzbekistan
Greece Oman (Sultanate of Oman) Vietnam
Hong Kong Pakistan
Iceland Philippines
India Poland
Indonesia Portugal

Please note that the DTT concluded with the United States has been terminated as of 1 January 2024.

Social security agreements

Hungary has social security agreements with Albania, Australia, Bosnia and Herzegovina, Canada, India, Japan, Korea, Macedonia, Moldova, Mongolia, Montenegro, Quebec, Russia, Serbia, Turkey, and the United States. The social security agreement concluded between Hungary and the Soviet Union is only applicable to Ukraine. The social security agreement concluded with Yugoslavia is only applicable to Kosovo.

In addition, the Hungarian local rules are subject to EU rules on social security.