Hungary

Individual - Foreign tax relief and tax treaties

Last reviewed - 01 January 2021

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). Where DTTs apply, they usually provide an exemption, rather than credit, for foreign taxes.

Tax treaties

Double tax treaties (DTTs)

Currently Hungary has DTTs with the following countries:

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

Social security agreements

Hungary has social security agreements with Albania, Australia, Bosnia and Herzegovina, Canada, India, Japan, Korea, Moldova, Macedonia, Mongolia, Montenegro, Quebec, Serbia, Turkey, and the United States (US). New social security agreement came into force as of 1 December 2020 between Russia and Hungary.  The social security agreement concluded between Hungary and 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.