Social security contributions
The social security contribution base is the gross income paid to the employee. The employer's contribution rate (so-called 'social tax') is 13% in 2023. The employees' social security contribution rate is 18.5%. 15% of the unused amount of the child tax base allowance can be deducted from the total amount of 18.5% social security contribution obligation.
In 2023 the amount of the minimum wage is 232,000 Hungarian forint [HUF] per month and the guaranteed minimum wage for those employed in jobs requiring at least secondary level qualifications or vocational training is HUF 296,400 as of 1 January 2023. Employers (seated in Hungary) are liable for both social security payments and the electronic filing of monthly social security declarations. Non-Hungarian employers have similar obligations; however, if they fail to complete them, the employees will be responsible for these tasks.
As a general rule, dependent persons over 18 years of age are only eligible for healthcare services if they pay healthcare service contributions. Uninsured persons are liable for monthly contributions of HUF 9,600.
Social tax allowances
Only one type of allowance can be applied on a given employee; however, it is the employer's decision which is the most beneficial based on the given circumstances.
With these allowances, the government intended to reduce the employment cost relating to the employees like jobseekers, jobseeker mothers with three or more young children, individuals with reduced ability to work, researchers, etc.
With employment of the above employees, the employer can apply social tax allowances. The eligibility periods of the allowances and their exact amounts depend on the employee.
Social security contribution of foreign nationals
In order to determine whether a foreign national should become subject to Hungarian social security contributions, both the local and international rules should be carefully reviewed. One should count with Hungarian social charges typically when the foreign nationals:
- are employed locally by a Hungarian employer in the territory of Hungary
- work in Hungary as employees of a non-Hungarian employer and are nationals of a European Union (EU) member state or of a country that has a social security treaty with Hungary but cannot remain covered by the social security system of their home country, or
- are third-country nationals assigned to Hungary from a non-EEA country and the length of their assignment exceeds two years.
Value-added tax (VAT)
VAT is payable on sales of goods and the supply of services at the general rate of 27%. Reduced rates of 18% and 5% are applicable for some goods and services (see the Other taxes section in the Corporate tax summary for more information).
Net wealth/worth taxes
There are no net wealth/worth taxes in Hungary.
Inheritance, estate transfer, and gift taxes
The general inheritance and gift tax rate is 18%, and a preferential 9% tax rate applies to residential property. The transfer of property without consideration between lineal relatives (including the spouse of the deceased) is tax exempt. There is a preferential tax rate for residential property in case of estate transfer tax as well. The estate transfer tax rate is 4% or 2%, depending on the value of real estate. In case the value of real estate is maximum HUF 1 billion, then the tax rate is 4%. In relation to the portion of the value that exceeds HUF 1 billion, the applicable rate is 2%. Nevertheless, the amount of the estate transfer tax cannot exceed HUF 200 million per property.
Property and land taxes
Hungarian municipalities have the right to levy property tax and land tax at their own discretion until the relevant caps are reached (see the Other taxes section in the Corporate tax summary for more information).
Company car tax
The measure of the company car tax depends on the power in KW and the environmental classification of the company car.
Company car tax may also be payable if company car costs are borne by a Hungarian company or if individuals use their own cars for business purposes and are reimbursed for the costs.
The use of company cars for private purposes does not incur an additional PIT liability.
According to the legislation about the extra-profit taxes effective as of 1 July 2022 an 81-87% higher company car tax have to be paid by the companies who own or lease a car. This higher rate remains in effect in 2023.