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.
Double tax treaties (DTTs)
Currently Hungary has DTTs with the following countries:
|Bosnia and Herzegovina||Kuwait||South Africa|
|Finland||Montenegro||United Arab Emirates|
|Greece||Oman (Sultanate of Oman)||Uzbekistan|
* Please note that, as of 1 January 2024, the US-Hungarian DTT is expected to be terminated.
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 (US). 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.