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Update April 12, 2024

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Travel Advisory July 26, 2023

Hungary - level 1: exercise normal precautions.

Reissued with obsolete COVID-19 page links removed.

Exercise normal precautions in Hungary.

Read the country information page for additional information on travel to Hungary.

If you decide to travel to Hungary:

• Enroll in the  Smart Traveler Enrollment Program  ( STEP ) to receive alerts and make it easier to locate you in an emergency.
• Follow the Department of State on  Facebook  and  Twitter .
• Review the  Country Security Report  for Hungary.
• Visit the CDC page for the latest Travel Health Information related to your travel. 
• Prepare a contingency plan for emergency situations. Review the  Traveler’s Checklist .

Embassy Messages

View Alerts and Messages Archive

Quick Facts

Six months validity recommended; three months validity beyond planned departure date from the Schengen Zone required.

One (1) page per stamp.

Not required for stays under 90 days.

Amounts of more than 10,000 Euros (or equivalent currency) must be declared.

Embassies and Consulates

U.S. Embassy Budapest

Szabadság tér 12 H-1054 Budapest Hungary Telephone: +(36) (1) 475-4400 Email: [email protected]

Destination Description

Learn about the U.S. relationship to countries around the world.

Entry, Exit and Visa Requirements

Hungary is a party to the Schengen Agreement, which allows for free movement between certain European countries. U.S. citizens may enter Hungary for up to 90 days for tourist or business purposes without a visa. If you plan to stay longer, please visit the Embassy of Hungary for the most current visa information.

Traveling Through Europe : If you are planning to visit or travel through European countries, you should be familiar with the requirements of the Schengen Agreement. Please review our U.S. Travelers in Europe page .

• Your passport should be valid for at least three months beyond the period of stay .
• You will need sufficient proof of funds and a return plane ticket .
• For additional information about visas for the Schengen area, see the Schengen Visa page .

The U.S. Department of State is unaware of any HIV/AIDS entry restrictions for visitors to or foreign residents of Hungary.

Find information on dual nationality , prevention of international child abduction and customs regulations on our websites.

Safety and Security

Terrorist groups and those inspired by such organizations are intent on attacking U.S. citizens abroad. Terrorists are increasingly using less sophisticated methods of attack – including knives, firearms, and vehicles – to more effectively target crowds. Frequently, their aim is unprotected or vulnerable targets, such as:

• High-profile public events (sporting contests, political rallies, demonstrations, holiday events, celebratory gatherings, etc.)
• Hotels, clubs, and restaurants frequented by tourists
• Places of worship
• Shopping malls and markets
• Public transportation systems (including subways, buses, trains, and scheduled commercial flights) 

Terrorism: Terrorist groups and those inspired by such organizations are intent on attacking U.S. citizens abroad, including in Europe. For more information, see our Terrorism page.

Crime: Although Hungary is generally a safe place to visit, you should use caution and stay alert. Be especially careful in crowded tourist areas, train stations, buses, trams, and metros.

Passports, cash, and credit cards are favorite targets of thieves. The Embassy regularly receives reports of pickpocketing on the trains between Budapest and Vienna, so please be especially mindful of your belongings when traveling this route. There have been some instances in Budapest where U.S. citizens were overcharged exorbitant prices for food, beverages, or taxi services. Always verify the cost before making a purchase.

There have been incidents, although rare, where U.S. citizens were unknowingly drugged. Do not accept food or drink from anyone but a server. Additionally, the Embassy has received reports of racially motivated assaults. Please report all crimes to the local police. In an emergency dial 112 for help and contact the U.S. Embassy for follow-up assistance.

General tips to avoid becoming a victim of crime:

• Be aware of your surroundings.
• Do not walk alone at night.
• Be vigilant when visiting banks or ATMs.
• Stay alert in crowded locations frequented by tourists.
• Always keep your belongings secure.
• Do not accept food or drink from anyone but a server.

Victims of Crime: Hungarian authorities are responsible for investigating and prosecuting crimes committed in Hungary. Report crimes to the local police by calling 112 .

U.S. citizen victims of violent crime and sexual assault are encouraged to contact the U.S. Embassy for assistance. See our webpage about help for U.S. victims of crime overseas .

See our webpage on help for U.S. victims of crime overseas .

• Help you find appropriate medical care 
• Assist you in reporting a crime to the police
• Contact relatives or friends with your written consent
• Provide general information regarding the victim’s role during the local investigation and following its conclusion
• Provide a list of local attorneys 
• Provide our information on victim’s compensation programs in the U.S.
• Provide an emergency loan for repatriation to the United States and/or limited medical support in cases of destitution
• Help you find accommodation and arrange flights home
• Replace a stolen or lost passport

Demonstrations: Political gatherings and protests occur frequently in Hungary, mostly in Budapest. They may take place in response to political or economic issues, on politically significant holidays, and during international events. Ethnic nationalist groups have gained popularity in Hungary in the past years, in some cases advocating intolerance towards migrants and minorities, including Jews, Roma, and LGBTI+ individuals. Although these far-right groups do not engage in violence and are not explicitly anti-United States, you should avoid public demonstrations and confrontations with their members.

• Demonstrations can be unpredictable, avoid areas around protests and political rallies. 
• Check local media for updates and traffic advisories.
• In a few instances where demonstrations have turned violent, authorities have used riot police to control crowds.

Domestic Violence: U.S. citizen victims of domestic violence are encouraged to contact the Embassy for assistance.

International Financial Scams: See the  Department of State  and   FBI webpages for information.

Tourism: The tourism industry is generally well-regulated and rules enforced. Hazardous areas/activities are identified with appropriate signage and professional staff is typically on hand in support of organized activities. In the event of an injury, appropriate medical treatment is generally available throughout the country. Outside of major metropolitan centers, it may take more time for first responders and medical professionals to stabilize a patient and provide life-saving assistance. U.S. citizens are encouraged to purchase medical evacuation insurance . 

Local Laws & Special Circumstances

Criminal Penalties: You are subject to local laws. If you violate local laws, even unknowingly, you may be expelled, arrested, or imprisoned.  Individuals establishing a business or practicing a profession that requires additional permits or licensing should seek information from the competent local authorities, prior to practicing or operating a business.

• Always carry your passport with you in Hungary. Local police may require you to show documentation to establish your identity upon request. Hungarian police may take you into custody if you attempt to prove your identity with documents other than a passport.
• Hungary has a zero-tolerance policy for driving under the influence of alcohol or drugs. Penalties are severe, including significant jail time.

Some laws are also prosecutable in the United States, regardless of local law. For examples, see our website on crimes against minors abroad and the Department of Justice website.

Arrest Notification: If you are arrested or detained, ask police or prison officials to notify the U.S. Embassy immediately. See our webpage for further information.

Special Circumstances regarding Banking and Customs:

• Travelers’ checks are not universally accepted in Hungary. ATMs are readily available.
• It is not possible to cash personal checks in Hungary without a local bank account, which requires residency.
• Western Union is the most prevalent international money transfer company and has many locations throughout Hungary. You must have photo identification to receive a wire transfer.
• Visit the National Tax and Customs Administration of Hungary for information about import and export of potentially restricted items.

Counterfeit and Pirated Goods: Although counterfeit and pirated goods are prevalent in many countries, they may still be illegal according to local laws. You may also pay fines or have to give them up if you bring them back to the United States. See the U.S. Department of Justice website for more information.

Faith-Based Travelers: See the following webpages for details:

• Faith-Based Travel Information
• International Religious Freedom Report – see country reports
• Human Rights Report – see country report
• Hajj Fact Sheet for Travelers
• Best Practices for Volunteering Abroad

LGBTQI+ Travelers: There are no legal restrictions on same-sex sexual relations or the organization of LGBTQI+ events in Hungary. However, organizers may encounter disruptive behavior by far-right wing extremists at events supporting the LGBTQI+ community.

See our LGBTQI+ Travel Information page and section 6 of our Human Rights Report for further details.

Travelers with Disabilities: The law in Hungary prohibits discrimination against persons with physical or mental disabilities, and the law is enforced. Social acceptance of persons with disabilities in public is as prevalent as in the United States. The most common types of accessibility issues may include accessible facilities and ease of movement. Expect accessibility to be limited in public transportation, lodging, and general infrastructure. There can be a significant difference in accessibility between Budapest and the rest of the country.

Students:   See our Students Abroad webpage and FBI travel tips .

Women Travelers: See our travel tips for Women Travelers .

Women Travelers:  See our travel tips for  Women Travelers .

The U.S. Centers for Disease Control and Prevention (CDC) also provides Traveler Health Information for Hungary .

For emergency services in Hungary dial:

• 104 for Ambulance Services
• 107 for the Police
• 105 for the Fire Department
• 112 for English-Speaking Emergency Responders (All Types of Emergencies)

The U.S. Embassy maintains a list of doctors and hospitals . We do not endorse or recommend any specific medical provider or clinic.

Ambulance services are widely available in Hungary, but training and availability of emergency responders may be below U.S. standards. All ambulances may not be equipped with state-of-the-art medical equipment.

Adequate health facilities are available in the capital and other major cities, but health care in rural areas may be below U.S. standards. Medical staff may speak little or no English. Generally, in public hospitals only minimal staff is available overnight in non-emergency wards. Psychological and psychiatric services are limited, even in the larger cities, with hospital-based care only available through government institutions.

Some hospitals and doctors require payment “up front” prior to service or admission. Credit card payment is not always available. Some private clinics and hospitals may require advance payment or proof of adequate insurance before admitting a patient. Travelers should make efforts to obtain complete information on billing, pricing, and proposed medical procedures before agreeing to any medical care. Patients bear all costs for transfer to or between hospitals.

We do not pay medical bills. Be aware that U.S. Medicare/Medicaid does not apply overseas. Most hospitals and doctors overseas do not accept U.S. health insurance.

Medical Insurance: Make sure your health insurance plan provides coverage overseas. Most care providers overseas only accept cash payments. See our webpage for more information on insurance coverage overseas. Visit the U.S. Centers for Disease Control and Prevention for more information on type of insurance you should consider before you travel overseas. We strongly recommend supplemental insurance to cover medical evacuation.

Prescription Medication: Always carry your prescription medication in original packaging, along with your doctor’s prescription. Check with the government of Hungary to ensure the medication is legal in Hungary. Always carry your prescription medication in original packaging with your doctor’s prescription. Prescription and over-the-counter medicines are widely available at pharmacies.

Vaccinations: Be up-to-date on all vaccinations recommended by the U.S. Centers for Disease Control and Prevention.

Further health information:

• World Health Organization
• U.S. Centers for Disease Control and Prevention (CDC)

Assisted Reproductive Technology and Surrogacy: If you are considering traveling to have a child through use of assisted reproductive technology (ART) or surrogacy, please see our ART and Surrogacy Abroad page . Hungarian law forbids surrogacy arrangements.

Travel and Transportation

Road Conditions and Safety: Roadside assistance, including medical and other services, is available. Dial 112 to speak to English-speaking emergency operators.

Highways and urban roads are generally in good condition. As in most European countries, you must pay a toll to use Hungary’s highways. Payments must be made either at a gas station or online .

• Areas under construction are not always adequately marked.
• Be on the alert when driving in rural areas. Rural roads are often narrow and poorly lit.
• Pedestrians, tractors, and farm animals often share the use of rural roads.
• Train crossings are not always well-designated.

Additional information on road conditions is available from “ Útinform ” at +36-1-336-2400.

Traffic Laws: Hungary has zero tolerance for driving under the influence (DUI) of alcohol or drugs. Prison sentences for DUI violations or accidents caused by impaired drivers are severe.

• Police often conduct routine roadside checks and administer breath-analysis tests.
• Police stop vehicles regularly to check documents.
• Use of hand-held cell phones while driving is not permitted.
• Car seats are required for infants.
• Children under the age of 12 may not sit in the front seat.
• Seat belt use is mandatory.
• You can drive in Hungary with a valid U.S. driver’s license for one year as long as you have a certified Hungarian translation of the license attached. After one year of residence, you must obtain a Hungarian driver’s license.
• International driver’s permits (IDP) issued by the American Automobile Association (AAA) are acceptable when used with a valid state driver’s license.

Hungarian police issue traffic violations in the form of a postal check that reflects the amount of the fine. You may pay the fines at any Hungarian post office. Police will confiscate the passport of a person who chooses to contest the fine and issue the person an “invitation letter” to appear at the police station to resolve the dispute. Police will return the passport after resolution and/or payment of the fine.

Public Transportation: Public transportation in Budapest is excellent. Budapest’s tram, subway, and bus service are reliable. Find more information online: Budapest Public Transport . Public transportation outside of Budapest is not as dependable.

• To avoid being a subject to on-the-spot fines in public transportation, you must follow rules for purchasing and properly validating your ticket.
• Taxis in Budapest are plentiful and generally inexpensive. All taxis are yellow, marked accordingly, and should have meters. The Embassy urges all travelers to insist on using a metered taxi, and to avoid entering into agreements with taxi drivers to an unmetered fare.
• Hungary’s train service is generally reliable. The Embassy regularly receives reports of pickpocketing on the trains between Budapest and Vienna. Be mindful of your belongings when traveling this route.

Aviation Safety Oversight: The U.S. Federal Aviation Administration (FAA) has assessed the Government of Hungary’s Civil Aviation Authority as being in compliance with International Civil Aviation Organization (ICAO) aviation safety standards for oversight of Hungary’s air carrier operations. Further information may be found on the FAA’s safety assessment page .

For additional travel information

• Enroll in the  Smart Traveler Enrollment Program (STEP)  to receive security messages and make it easier to locate you in an emergency.
• Call us in Washington, D.C. at 1-888-407-4747 (toll-free in the United States and Canada) or 1-202-501-4444 (from all other countries) from 8:00 a.m. to 8:00 p.m., Eastern Standard Time, Monday through Friday (except U.S. federal holidays).
• See the  State Department’s travel website  for the  Worldwide Caution  and  Travel Advisories .
• Follow us on  Twitter  and  Facebook .
• See  traveling safely abroad  for useful travel tips.

Review information about International Parental Child Abduction in Hungary . For additional IPCA-related information, please see the International Child Abduction Prevention and Return Act ( ICAPRA ) report.

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Check passport expiration dates carefully for all travelers! Children’s passports are issued for 5 years, adult passports for 10 years.

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Hungary Travel Restrictions

Traveler's COVID-19 vaccination status

Traveling from the United States to Hungary

Open for vaccinated visitors

COVID-19 testing

Not required

Not required for vaccinated visitors

Restaurants

Not required in public spaces, enclosed environments and public transportation.

Hungary entry details and exceptions

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Can I travel to Hungary from the United States?

Most visitors from the United States, regardless of vaccination status, can enter Hungary.

Can I travel to Hungary if I am vaccinated?

Fully vaccinated visitors from the United States can enter Hungary without restrictions.

Can I travel to Hungary without being vaccinated?

Unvaccinated visitors from the United States can enter Hungary without restrictions.

Do I need a COVID test to enter Hungary?

Visitors from the United States are not required to present a negative COVID-19 PCR test or antigen result upon entering Hungary.

Can I travel to Hungary without quarantine?

Travelers from the United States are not required to quarantine.

Do I need to wear a mask in Hungary?

Mask usage in Hungary is not required in public spaces, enclosed environments and public transportation.

Are the restaurants and bars open in Hungary?

Restaurants in Hungary are open. Bars in Hungary are .

Changes in the rules concerning the reimbursement of commuting expenses

Changes in rules concerning of commuting expenses

To read the whole newsletter below.

Tax Newsletter 2023/08

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Introducing Hungary

• About Hungary
• Images of Hungary
• History, language & culture
• Weather & geography
• Doing business & staying in touch

Plan your trip

• Travel to Hungary
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Book your flights

• Budapest Ferenc Liszt International Airport

Money and duty free for Hungary

Currency and money, currency information.

Hungarian Forint (HUF; symbol Ft). Notes are in denominations of Ft20,000, 10,000, 5,000, 2,000, 1,000, and 500. Coins are in denominations of Ft200, 100, 50, 20, 10 and 5. A large number of commemorative coins in circulation are legal tender.

Credit cards

It is possible to withdraw cash by credit card at many post offices. American Express, Cirrus, Diners Club, MasterCard and Visa are accepted. Credit and debit cards can be used to withdraw money from ATMs, which are found throughout the country.

Credit and debit cards can be used to withdraw money from ATMs, which are reliable and widely available throughout the country.

Travellers cheques

Accepted in most post offices and banks. To avoid additional exchange rate charges, travellers are advised to take travellers cheques in Euros or US Dollars.

Banking hours

Mon-Thurs 0800-1700, Fri 0800-1600.

Currency restrictions

There are no restrictions on the import or export of local or foreign currency. However, amounts exceeding €10,000 or equivalent must be declared if travelling from or to a country outside the European Union.

Currency exchange

Currency can be exchanged at hotels, banks, post offices, bureaux de change, airports, railway stations, travel agencies and some restaurants throughout the country. Automatic exchange machines are available in Budapest and other main tourist centres.

Hungary duty free

Hungary is within the European Union. If you are travelling from outside of the EU , you are entitled to buy fragrance, skincare, cosmetics, Champagne, wine, selected spirits, fashion accessories, gifts and souvenirs - all at tax-free equivalent prices.

Hungary's duty-free allowance for travellers from EU countries:

If you are over 17 years old, you are free to buy and take goods with you when travelling between EU countries, provided that you have paid tax on these goods and they are for your own use (not for sale). However, if you bring in more than the following, customs officials are likely to question you: • 800 cigarettes • 400 cigarillos • 200 cigars • 1KG of tobacco • Max 300ml of filling liquid • 90L of still wine (out of which a maximum 60L may be sparkling wine) • 20L of intermediate alcoholic products • 110L of beer

Beware that each EU country has different rules for travellers under 17 years old. Please check before you travel.

Hungary's duty-free allowance for travellers from non-EU countries:

If you are arriving from a non-EU country, the following goods may be imported into Hungary by travellers over 17 years of age without incurring customs duty: • 200 cigarettes or 100 cigarillos (maximum 3g each) or 50 cigars or 250g of tobacco (applicable to air passengers only) • 40 cigarettes or 20 cigarillos (maximum 3g each) or 10 cigars or 50g of tobacco (applicable to land and sea travellers) • 4L of wine • 16L of beer • 1L of spirits over 22% volume or 2L of alcoholic beverages less than 22% volume • Other goods up to the value of €430 for air passengers and €300 for travellers other than air passengers • Maximum €150 for children up to 15 years old, irrespective of the means of transport

Banned Imports

Meat, fish or dairy products and potted or rooted plants from outside the EU. Pornography, drugs and unlicensed weapons.

Banned Exports

Raw meat or milk products, potted or rooted plants. You can must obtain a licence to export cultural goods which are more than 50 years old or have a commercial value of more than 50,000HUF.

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Doing business in Hungary | Tax guideline | Tax calendar | VAT overview | Expat tax guide | Transfer pricing overview | Company formation overview | Labour law overview | Salary calculator | Real estate transactions

2024 Tax Guideline for Hungary

As with previous years, our tax experts have prepared a comprehensive tax guideline for Hungary.

Our material shall provide you with the necessary information about Hungarian business environment and its statutory framework.

Download our 2024 tax guideline for Hungary, or read more below

Legal forms of business.

The Act V of 2013 on the Civil Code sets the types of business associations that can be established for business purposes. In the next table we have compiled the  most commonly used types of business associations  in Hungary with their basic information.

* Applied exchange rate: 392 HUF/EUR

All of these business associations are legal persons. The  amount of liability varies , as well as the required subscribed capital and the number of founders.

Companies limited by shares  (Rt.) are business associations operating either as private company limited by shares (Zrt.) or public company limited by shares (Nyrt.) depending on their shares’ availability on the stock exchange.

General partnership  (Kkt.) is not mentioned in the table as it is uncommon to use. Its advantage is that no minimum initial capital is required to start this type of business, but this is certainly one of the riskiest forms. Members of a Kkt. assume unlimited and full liability for the company’s obligations.

Wish to open a LLC in Hungary? Get it done through our eShop.

Personal income tax and social contributions

In Hungary flat rate personal income tax applies: 15%. The following contributions are generally payable:

The total tax burden (tax + contribution) in case of normal salary is 33.5%, so the general level of net salary is 66.5% of gross salary. The net to total company cost ratio is 58.8%.

Passive incomes (such as dividends or capital gains) and the benefits in kind for employees become subject to 13% contribution, too. However, in case of capital incomes, there is an upper limit of tax liability, hence, social contribution tax is only payable until the natural person’s income (both from non-independent and independent work and capital gains) reaches twenty-four times the mandatory minimum wage (which is HUF 266.800 per month in 2024).

Corporate income tax

General information.

Tax rate is 9%  of the positive amount of the tax base.

The  tax base  both for domestic and foreign businesses is the pre-tax profit modified by items declared in  Act LXXXI of 1996 on corporate income tax  such as loss carried forward, provisions, depreciation, declared share, declared intangible good, dividends, received royalties, research and development, costs incurred that are not in relation with the business’ interests, imposed penalties, thin capitalization, CFC.

Business associations need to submit their  CIT returns  by May 31 st  following the tax year. For taxpayers with a different tax year, the filing deadline is the last day of the fifth month following their business year.

Taxpayers with Hungarian residence have to pay corporate tax on their worldwide income (unlimited tax liability), while non-resident businesses only need to pay tax on the income from their Hungarian activities (limited tax liability).

Hungary grants tax credits related to funding film making, certain spectacle team sports, for business growth, for energy efficient investments, for R+D projects, and for small and medium businesses.

Income minimum

Should a company make  no profit, it still may have to pay  corporate income tax on the income minimum as tax base. If the pre-tax profit or the tax base – whichever is higher – fails to reach the profit minimum, the taxpayer either has to make a statement of its cost structure in its tax return or apply the income minimum as tax base (generally 2% of the total revenue).

Get an extensive consultation for your taxes – book it on our eShop.

Transfer pricing

The Hungarian transfer pricing rules are in line with OECD Transfer Pricing Guidelines. Accordingly, price setting of intra-group transactions has to follow the  arm’s length principle .

In Hungary, there are no provisions on which particular transfer pricing method is preferred. However, certain methods are listed in the CIT act and the law declares that other methods may only be used after the listed ones have been eliminated.

Hungary introduced the CbC reporting obligation in autumn 2017. First financial year affected is 2016.

In Hungary the related party transactions are to be documented properly ; otherwise, the tax authority imposes harsh penalties for each missing or incomplete documentations ranging up to HUF 5 million for the first time, and even up to HUF 10 million for repeated defaults regarding the same transfer pricing documentation.

Hungary implemented the Master file – Local file concept in the lay out and content requirement of TP documentation. FY 2017 can be documented according to the former rules either, but from FY 2018 the new concept is obligatory.

As of 1 January 2023, Hungary introduced data provision obligation for related party transactions, to be disclosed in the CIT return of each taxpayer who is subject to the transfer pricing documentation obligation. FY2022 was already affected by this rule.

Take no risks with penalties! Book our transfer pricing experts for a 1-hour long session on our eShop.

Taxes on individual income

Personal income tax (pit).

Tax liability affects the total revenues of resident taxpayers, the revenues obtained in Hungary by foreign individuals or other incomes that are taxable by law, in Hungary.

Taxpayers could be both residents (Hungarian citizens with exception of dual citizens without Hungarian residence, EEC member state citizens with more than 183 days of staying, third country citizens with residence permit and persons only with Hungarian residence) and non-residents (if they earn income from Hungary or according to an international convention, they earn income that is taxable in Hungary).

Hungary has a personal income tax rate of 15% of the tax base. For resident taxpayers, the tax base is their whole income, while in the case of non-resident taxpayers it represents their locally taxable incomes.

Simplified contribution to public revenues

Writers, journalists, artists, directors, actors, musicians, circus artists, professional athletes or trainers – under certain conditions – may choose this favourable tax form.

This tax exempts from the personal income tax, social security contribution and social contribution tax excluding taxes and contributions on the minimum wage. Its tax base is the individual’s revenue reduced (if the private person is liable to pay it) with the value added tax.

The applicable tax rate in this case is 15% for private individual and 9.5% for pensioner.

For private individuals covered by social security in an EU member state, the EKHO rate is 9.5%. The payer is no longer obliged to pay EKHO.

Value-added tax (VAT)

The VAT general tax rate in Hungary is 27%. Nonetheless, there are three reduced VAT rates in use: 0%, 5% and 18%.

VAT returns  are required to be submitted monthly, quarterly or yearly. Deadline for filing the return is the 20 th  day of the month following the given period.

The  yearly VAT return  has to be submitted by February 25th following the given tax year.

Intrastat: in case a taxable person has EU transactions, Intrastat statistical reports must be submitted as well. The threshold for arrivals is HUF 270 million, while the threshold for dispatches is HUF 150 million in 2024.

With the beginning of 2024, the eVAT system has been introduced, which means that the tax authority offers draft VAT returns and administrative benefits for the taxpayers on an optional basis from this year forward.

The OSS system and its application has been extended since 2021 with distance selling and all the services provided for non-taxpayers where the place of performance is in the Member State where the consumption took place. Taxpayers involved in distance selling may register in the one-stop shop system and settle their tax liabilities in respect of several Member States simultaneously. Tax returns must be filed electronically in the EU and non-EU one-stop shop system on quarterly basis.

For B2C distance sales of goods from outside the EU, the Import One-Stop-Shop (IOSS) scheme is applicable.

In line with EU provisions, the threshold for distance sales to non-taxable persons is EUR 10,000.

Reduced VAT rates

Certain products and services are the beneficiaries of lower VAT rates.

The 0% rate applies to daily papers (issued at least 4 times a week) from 2024.

The  5% rate  applies to some type of milk, poultry meat, fish fillets and other fish meat, fresh eggs, medicine, books, magazines, specific large live animals, district heating services, instrumental live music performed by artists at private events, commercial accommodation services, restaurants and internet.

The  18% rate  can be applied to dairy products, products made from milk, corn, starch and open-air events’ service providers.

Please note that VAT of certain group of services and products  are   not deductible , such as different types of fuels and motorcycles, passenger cars, taxis, parking services, food and beverages, catering services and residential properties and related activities to renovation of these buildings.

Domestic reverse charge mechanism

When both the buyer and the seller are taxable persons and not exempt from VAT, domestic reverse charge mechanism is to be applied with regard to certain services and product supply. Instead of including VAT in the invoice, the  seller should state  in the invoice, that the transaction is subject to the reverse charge mechanism; hence the buyer will have to pay VAT to the competent tax authority.

Domestic reverse charge VAT can be applied to services that require a building permit, construction work in connection with expanding, restructuring, demolition of buildings, maintenance, sale of certain metal products, grain, collateral assets, sale of real estate, trading greenhouse gas emission rights – when the vendor opts for taxability, and labour hire relating to specified construction and other installation works.

Live invoice data reporting

The legislation requires an immediate and automated data upload to the Hungarian Tax Authority’s online invoice system, integrated to the invoicing software of taxpayers. As of 1 April 2021, the scope of live invoice data reporting was extended to almost all outgoing invoices issued under HU VAT ID. Not meeting with this obligation may pose significant default penalties.

Property taxes

Transfer duty.

Purchasing real estate through an asset or share deal is subject to transfer tax obligations. The  assessed tax base  will be the gross market value of the real estate by the tax authorities’ practice.

The transfer tax rate  is 4% up to HUF 1 billion and 2% for the rest of the amount. The  total amount  of transfer tax payable per property  is limited   to   HUF 200 million .

Local business tax

Tax base for permanent activities performed in the jurisdiction of the local government is the net sales revenue reduced by costs of sold goods, value of mediated services (or above a certain amount of sales revenue by the proportional share of the above mentioned), subcontractor fees, material costs and direct value of research and experimental development. The tax rate is determined by the local government but cannot be higher than 2%.

The tax on temporary business activities  is abolished. In the case of construction activity exceeding 180 days the tax on permanent business activity shall continue to be paid.

Building tax

Regardless of what they are intended or utilized for, both residential and non-residential buildings and structures may set building tax obligations for the taxpayer depending on the decision of the local government.

The  owner on January 1st  is subject to tax.

Should there be more owners, they need to pay tax according to their proportions of shares in the building.

Depending on the local government’s decision, building tax is either  calculated by the useful space  in m 2  (maximum tax rate is HUF 1,100/m 2 /annum)  or adjusted market value  (maximum 3.6% of the adjusted market value of the building).

The  owner on January 1st  may be subject to land tax. Depending on the local government’s decision,  land tax is either calculated by the land’s area in m2  (maximum tax rate is HUF 200/m2/annum) decreased by the structure’s space on the land itself,  or the adjusted market value of the land  (capped at 3%).

The right of taxation of local governments includes the right to define the tax rates in observation of the upper limits prescribed by the Act but increased according to changes in the KSH consumer price index published. The upper limit plus the increment is to be called the “tax ceiling”.

Both building and land taxes’ rates are heavily affected by the local government’s decisions, so it is advised to obtain the necessary information regarding which method is being used.

Customs duties

The  National Tax and Customs Administration of Hungary  is the competent authority for customs duties. Since Hungary is a member state of the European Union,  no customs procedures are required  as free movement of goods is ensured between member states, unless you exceed the non-commercial quantity declared in the Hungarian Excise Act.

Goods purchased for  non-commercial purposes  are exempt from customs procedures as well. However, transport of specific goods or items such as alcohol, tobacco, weapons, medicines and pets are subject to restrictions depending on the  country of origin  and  means of transport .

Passengers carrying goods from third countries that are outside the EU face  more solid restrictions  on these products if they depart from another member state.

In addition to the above goods, passengers are exempt from customs duty and taxes for goods imported

up to the value of  EUR 300

and up to the value of  EUR 430 if travelling by air

The import VAT exemption for imported goods below EUR 22 has been abolished, customs declaration is required for these goods as well. This means that import VAT is payable on imports of consignments regardless of their value. However, in case of import of goods of a value of under EUR 150 the customs exemption remained unchanged i.e. if the value of the goods will be below EUR 150, the consignment will be exempted from customs duty but VAT must be paid on the full value of the consignment.

Investment incentives

Both refundable and non-refundable incentives are available to investors coming to or expanding in Hungary. The main types of incentives related to investments are:

• cash subsidies (either from the Hungarian Government or from EU Funds)
• tax incentives, low-interest loans
• land available for free or at reduced prices.

The regulations on incentive opportunities are in accordance with EU rules. As tax incentives are the most popular and commonly used form of incentive, we will expand on them further.

In Hungary there are two groups of corporate income tax allowances related to investments:

one of them is decreasing the tax base,

the other has decreasing impact on the calculated tax liability.

Tax base decreasing items

Investment allowances of small and medium enterprises.

This type of allowance is applicable by entities considered as small or medium enterprise at the end of the financial year and has only private person member(s). According to the allowance the enterprise is entitled to decrease its profit before taxation with the amount of investment related to new assets not capitalized during the financial year. The amount of allowance cannot exceed the amount of profit before taxation.

Development reserve

Entities have the possibilities to create development reserve while decreasing the retained earnings for future asset investments. The amount shown as development reserve at the end of the financial year is tax base decreasing item according to the Act on CIT.

As of 1 January 2021, the HUF 10 billion cap on the companies’ development reserve will be abolished, thus higher corporate tax base reduction is available from 2021. However, the maximum amount of the tax base deduction is still limited by the profit before tax for the tax year.

Investment related to historical buildings

In case of cultural heritage related investment projects on monuments, buildings recorded as historic value, property qualifying under special protection, the double of cost of renovation (investment) of the property can be taken into account as tax base decreasing item. There is the possibility that the cost will be utilized at the related company of the investor. The amount of the allowance on the level of calculated tax cannot exceed the HUF equivalent of EUR 100 million.

Tax allowances

Tax allowance based on interest on investment loan.

Small and medium enterprises are entitled to tax allowance based on interest on loan requested from financial institute for fixed asset investment. The tax allowance available in given year equals with the interest amount paid during the financial year.

Energy efficient investments

The taxpayer is entitled to tax allowance based on investment for energy efficiency. The available tax incentive is up to 45% of the counted costs related to the investment, but at most HUF equivalent to EUR 30 million. The tax allowance can be used in the tax year following the year when the investment was placed into operation – or in the same tax year at the taxpayer’s discretion – and in the following five tax years.

Development tax incentive

The taxpayer is entitled to development tax credit if:

• it performs investment amounted to at least HUF 3 billion (on present value), or
• it performs investment amounted to at least HUF 1 billion (on present value) in certain designated areas, or
• it performs investment amounted to at least HUF 100 million (on present value) related to previously occupied facility used for zoogenic food production, or
• it performs investment amounted to at least HUF 100 million (on present value) related to environment protection, or
• it performs investment amounted to at least HUF 100 million (on present value) related to R+D, or
• it performs investment amounted to at least HUF 100 million (on present value) related to only film and video production, or
• investment related to job creation, or
• it performs investment amounted to at least HUF 100 million (on present value) within 3 years following enter of stock exchange; or
• investment amounted to at least HUF 50 million performed by small enterprises,
• investment amounted to at least HUF 100 million performed by medium enterprises, or
• investment amounted to at least HUF 100 million (on present value) performed in free entrepreneurship zone or
• for investments of strategic importance for the transition towards a zero net emissions target economy.

The rules of such tax credit are determined also by the given government decree beside the Act on CIT. There are different criteria for each tax credit. The main criteria for utilization of the tax credit are that related request has to be submitted to the Minister responsible for Tax Policy.

The tax credit can be utilized in 13 financial years (firstly in the financial year following the capitalization of the investment or based on decision right in the financial year of capitalization) but not later than the 16th financial year following submission of the request.

The taxpayer has reporting obligation related to the investment details in the financial years when the tax credit will be taken into account. The report is part of the annual corporate income tax return.

Doing business in Hungary?

10 facts about taxation in hungary | infographic, 2024 company formation in hungary, bankruptcy proceedings in hungary | ebook, 2024 tax calendar for hungary, labour law and employment in hungary – 2024 guide, value-added tax in hungary | ebook, expat tax in hungary: 2024 guide | ebook, 2024 transfer pricing overview for hungary, real estate transactions in hungary | ebook.

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wtsklient.hu News Tax allowances and leave in 2023

Tax allowances and leave in 2023

Rules on using szép cards to change.

by Marianna Fodor | Jan 17, 2023 | eng news , WTS hírek |

2023 is starting with significant changes for employees and employers in Hungary: the introduction of new tax allowances, a new type of leave, only one account for SZÉP cards, and the minimum wage increasing. In our earlier article we mentioned that the National Assembly of Hungary adopted major amendments to labour laws last December. Although the amendments did not affect the possibility to pay wages in foreign currency , they did substantially change the previous rules in a number of other areas. Below is a summary of the most important changes affecting labour law and payroll accounting that will apply from 1 January 2023.

Minimum wage

Just like the end of each year, a new wage agreement was reached between the Hungarian government and employers last December. Accordingly, from 1 January 2023, the amount of the lowest wage, i.e. the minimum wage , has been increased from HUF 200,000 gross to HUF 232,000, while the amount of the guaranteed minimum wage has been increased to HUF 296,400. At the same time, the basis for the personal allowance , which is one third of the current minimum wage rounded to one hundred forints, has been increased to HUF 77,300, which means a monthly tax allowance of HUF 11,595.

SZÉP card with only one account

For SZÉP cards , the annual limit is still HUF 450,000, up to which employers must pay 28% tax (15% personal income tax and 13% social contribution tax); the excess is taxed as an other benefit (at a tax rate of 33.04%). However, the three sub-accounts (hospitality, leisure and accommodation) have been merged: from 9 January 2023 there is only one SZÉP card account for each employee. The individual sub-accounts and their respective allowances have been terminated. The amounts previously paid into each sub-account have been merged and can be used on a combined basis this year. Employees who already have a SZÉP card will not be given a new bank account number, but will retain their accommodation account number with each distributor.

Increasing tax allowances

Depending on the number of dependent beneficiaries, the family tax allowance for one dependent beneficiary enforceable from the tax base remains at HUF 66,670 per entitlement month, rising to HUF 133,330 for two dependent beneficiaries and HUF 220,000 for more than two dependent beneficiaries. However, from 2023, the family tax allowance for a dependent beneficiary who is permanently ill or a severely disabled person is HUF 66,670 higher per month, so the amount of the allowance for these children increases by HUF 10,000 in tax terms. Employees will be able to request the validation of this allowance on the tax advance declaration.

Looking at the tax allowances, the benefit for young people under 25 also increases: in 2023 the amount of the allowance for young people under 25 is HUF 499,952 per month of entitlement, which means a tax saving of HUF 74,993.

Newest element of tax allowances

A new allowance for mothers under 30 has been introduced in Hungary from this year. A young mother is entitled to the allowance if she became entitled to the family tax allowance after 31 December 2022 with regard to her unborn child, biological child or an adopted child. This allowance is therefore available to young mothers who have reached the age of 25, are under 30 at the start of their entitlement, and became eligible for the family tax allowance after 31 December 2022, for example she reached her 91 st day of pregnancy after 31 December 2022 or her child is/was born after 31 December 2022. The maximum monthly allowance for mothers under 30 is the amount of the average gross earnings of full-time employees at the level of the national economy for the month of July of the year preceding the year in question, as officially announced by the Hungarian Central Statistical Office (KSH). This means that in 2023, the allowance is HUF 499,952 per month of entitlement, which means a tax saving of HUF 74,993.

In addition to the changes in tax allowances, a new type of leave has been added to the Hungarian Labour Code. Employees are entitled to 44 working days of parental leave up until their child reaches the age of three, subject to at least one year of employment. This leave must be granted at the time requested by the employee. For the duration of the parental leave the employee is entitled to 10% of the absence pay, reduced by the amount of child care benefit or child care allowance paid for this period. To do this, a decision awarding benefits has to be requested.

The regulation on paternity leave  is also changing. Upon the birth of a child, in 2023 the father shall be entitled to ten working days’ leave – instead of the five granted previously – no later than by the end of the second month following the birth of the child or, in the case of adoption, no later than the end of the second month following the finalisation of the decision authorising the adoption, granted when requested, in no more than two parts. The employee is also entitled to paternity leave if the child is stillborn or dies. The employee is entitled to absence pay for five working days of paternity leave, while from the sixth working day onwards he is entitled to 40% of the absence pay.

Restrictions on execution

Fewer people will be affected, but it is worth noting that the restrictions on execution have increased. From 1 January 2023 an exemption is granted from enforcement for the part of the salary not exceeding HUF 60,000 (this amount used to be set at HUF 28,500). By contrast, the part of the monthly wages that exceeds HUF 200,000 can be enforced without limitation (this limit used to be set at HUF 142,500).

In this article, we only highlighted the most important changes affecting labour law and payroll in the 2023 law amendments. Both the elements of the Hungarian Labour Code and the tax allowances are among the many other new developments that may affect your business. Our payroll experts are happy to provide our clients with more information about these or even the changes detailed in this article. Feel free to contact us.

Marianna Fodor

Partner Payroll

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Article published in WTS Klient Newsletter 2023/FEBR

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Allowance for young people under 25 round the corner

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• By Practice

Commuting Allowance Doubled in Hungary

• Previous Article Changes to Hungarian Real Property Taxation in 2023
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Employees are entitled to compensation from their employers for commuting from another town or city. Due to the significant increase in fuel prices, the corresponding thresholds have been doubled by the end of the ‘state of emergency’ in effect (end of June 2023, for now).

According to the provisions of the Hungarian Labour Code, the employer is obliged to reimburse the employee for the necessary and justified costs incurred in the performance of the employment relationship.

Such justified costs include, for example, the employee's travel expenses to and from work. If the term "commuting to work" as defined in the relevant Government Decree on the reimbursement of travel expenses in connection with commuting to work ("Decree") includes the employee's commuting to work, i.e. inter alia, the place of work and the place of residence are not located within the same municipality, the employer reimburses the cost of the pass or ticket for the employee's commuting to work at the rate specified in the Decree, provided that the additional conditions set out in the Decree are met.

Commuting allowance

Additionally, if the employee travels to the place of work by private car and if the conditions laid down in the Decree are met – for example, there is no public transport available or if the employee has a child in day-care or in a public education establishment under the age of ten – the employer is required to reimburse a minimum amount to the employee and is free to supplement this amount under the given threshold tax-free based on the actual distance from the place of work.

In accordance with the Personal Income Tax Act and the new legislation on the threshold, the corresponding amounts are:

• 18 HUF/km as minimum reimbursement to be paid by the employers (60% of the threshold); • up to 30 HUF/km supplementary, tax-free compensation limit to 15 HUF/km (subject to the discretion of the employer).

Employers are entitled to apply the increased threshold from January 2023 and are required to do so from February, with regard to the minimum reimbursement respectively. Both increased amounts are formally applicable by the end of the ‘state of emergency’ – end of June 2023 – that might be prolonged or implemented in the regular legislation afterwards. Furthermore, the benefit applies in particular, but not exclusively, to commuting to work by private car, i.e. the employer is entitled to provide a tax-free kilometre-based contribution for employees travelling to work by bicycle, scooter or other vehicles up to the above amount.

By Bálint Zsoldos , Attorney at Law,  KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA .

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eSIM Research

The Best eSIM Cards for Hungary Travel in 2024

Top esim cards for hungary, understanding esim technology.

What Is an Esim?

Benefits of using an esim while traveling, how to choose the best esim card for your hungary trip, consider your data needs, compare coverage and speed, assess compatibility with your device, activation and usage tips for esim in hungary, step-by-step activation guide.

• Purchase: After choosing the eSIM best suited for my journey based on data needs, coverage, and device compatibility, I purchase it directly from the provider’s website or app.
• Installation: Providers typically send a QR code via email upon purchase. I find this in my inbox and scan it using my smartphone’s camera, which initiates the eSIM installation on my device.
• Configuration: Once scanned, my phone usually prompts me to complete a few simple setup steps. This might involve choosing the eSIM as my preferred data plan and possibly naming the plan for easy identification.
• Activation: The final step often involves connecting to a Wi-Fi network to activate the eSIM profile. Once it’s connected, I’m ready to enjoy the local data services in Hungary.

Managing Your Data and Connectivity

• Track Usage: I regularly check my data usage through my phone’s settings. Most devices have built-in tools that allow me to monitor how much data I’ve used and which apps are consuming the most.
• Use Wi-Fi When Possible: To conserve my eSIM data, I connect to Wi-Fi networks at hotels, restaurants, or public places when it’s safe to do so. This is especially useful for data-heavy activities like downloading or streaming.
• Adjust App Settings: I tweak app settings to minimize data use. For instance, I set apps to update only over Wi-Fi and reduce the use of data-intensive apps unless I’m connected to Wi-Fi.
• Data Saver Modes: Activating data saver modes on my phone helps reduce background data usage, stretching my eSIM data further during my stay in Hungary.

Frequently Asked Questions

What are the benefits of using an esim card for traveling in hungary, how do i activate an esim for hungary, what factors should i consider when choosing an esim for hungary, how can i manage my data and connectivity effectively with an esim in hungary, is device compatibility important when selecting an esim for hungary, leave a comment cancel reply.

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