Tax in Hungary: Get your tax ID and pay tax in Hungary

Use our helpful guide to understand all you need to know about tax in Hungary, from paying tax to learning what you need to pay.

Ellie

5 minute read

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31 Oct 2024

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Living

Understanding how tax in Hungary works is essential for any local or foreigner who plans to live in Hungary. To live and work in Hungary, you need to be able to pay your taxes on time, but to do so, there’re some things you’ll need to set up first. In this article, we’ll walk you through the process of getting your tax ID in Hungary so you can pay your taxes. We’ll also take a look at which taxes you’ll pay in Hungary and discuss how to pay them. Let’s make taxes less taxing!

A tax identification number in Hungary (TIN) is a unique identifier given to individuals and businesses for tax purposes. This number is crucial for anyone earning an income, filing tax returns, or conducting business in Hungary. It helps the tax authorities keep track of taxpayers and their obligations.

In Hungary, you’ll receive a TIN card that holds your tax identification number. Let’s dive into the process of getting your Hungarian tax ID/TIN card.

Once you’ve registered your Hungarian address and gotten your residence permit in Hungary, getting your tax ID sorted is a simple process.

1. Gather your documents: To apply for your Hungarian tax ID and receive your tax card, you’ll need to collect the following documents:

• A valid passport
• Your residence permit
• Proof of your Hungarian address (an address card)

2. Complete the T34 form: The T34 form must be completed to receive your Hungarian tax ID, however this form can only be filled in Hungarian. You can use the English version for information on how to complete the form.

3.Submit your T34 form: You need to submit your completed form at a local branch of the National Tax and Customs Administration (Nemzeti Adó- és Vámhivatal - NAV) alongside the relevant documents.

4.Wait for your tax card: You’ll receive your tax card within 15 days of applying. If you need to use your TIN immediately, you can ask for a certificate of your TIN while applying. This acts as a replacement for your tax card until you receive it.

Now that you know how to get your tax ID sorted in Hungary, let’s talk about the different taxes you’ll pay while living in Hungary.

As an international living in Hungary, your taxes will probably differ from what you’re used to paying. Here’re the main taxes you’ll pay as an international living in Hungary.

Income tax in Hungary

In Hungary, personal income tax is done at a flat rate of 15%. No matter how much you earn, you’ll only pay 15% income tax on your taxable gross income. Hungarian residents need to pay income tax on earnings made in Hungary and income created abroad.

Non-residents only need to pay taxes on income made in Hungary.

Social security in Hungary

On top of your personal income tax, you’ll also make social security contributions from your gross salary. In Hungary, the social security rate of employees is 18.5%, and for employers it’s 13%.

Inheritance tax in Hungary

There’s no inheritance tax for those who inherit assets from their deceased relatives. You'll have to pay inheritance tax if you inherit assets from someone outside of your family. Hungary's inheritance and gift tax rate is 18%, but a lower rate of 9% applies to residential property.

VAT in Hungary

VAT is a consumption tax on goods and services in Hungary. The standard VAT rate is 27%, which is among the highest in Europe. There’re reduced rates of 18% and 5% for certain goods and services, like food and books.

Corporate tax

If you plan to run a business, you’ll need to pay corporate tax. Hungary's standard corporate tax rate is one of the lowest in Europe, at 9%. If you’re an entrepreneur looking to start a business in Hungary, this will be super helpful in cutting costs.

Some people will qualify for a tax benefit that cuts the cost of your taxes in Hungary. Let’s take a look at some of the tax benefits you can get in Hungary

Tax exemption for young people

Employees under 25 years of age are exempt from paying personal income tax in Hungary. This is a great incentive for young people to relocate to Hungary and kickstart their career, and encourages employers to hire more entry level employees.

Tax benefit for young mothers

If you’re a mother between the ages of 25 and 30 in Hungary, you may be entitled to a reduction in your personal income tax. Mothers between 25 and 30 whose children are eligible for a family allowance may be able to get a discount amounting to at most the gross average earnings on a national level for the previous year. In 2023, the maximum was Ft74,993.

Disability tax benefit

Those who qualify for the disability benefit will pay a lower personal income tax which is a third of the minimum wage per month. In 2023, this was Ft77,300. To qualify for this benefit you’ll need to get a medical certificate and have a court approve that you’re eligibile for this discount.

Newlyweds tax benefit

A personal income tax benefit is available for newlyweds or those who enter a registered partnership within the first 24 months of marriage if it’s the first marriage for one of both parties. In this case, the personal income tax base of newlyweds is reduced to just Ft33,335 each month.

Anyone who has residency in Hungary and earns an income must file a tax return each year to declare their earnings. The deadline for the Hungarian tax return is May 20th of the following tax year. That means you’ll have to file your tax return for 2024 by May 20th 2025.

How to file a tax return in Hungary

Each year, the Hungarian tax authority will draft your tax return based on the taxes reported to them throughout the year by your employer. This mightn't include all the income that you must declare, so you should always check and adjust your drafted income tax return accordingly.

In Hungary, you’ll typically complete your tax return online. It’s possible to request your tax return draft on paper via the NTCA website.

Here’re the steps of completing your tax return online:

1. Register for the Client Gate (Ügyfélkapu) or log into the eSZJA (ePIT) portal using your electronic ID card, facial identification or telephone identification (RKTA).
2. Check the draft tax return on the e-SZJA portal to ensure there’re no incomes missing and the information is accurate. If you need to edit the draft, you can do so on the portal.
3. If you don’t need to add any extra information, your draft will become your tax return by May 21st— you don’t need to do anything else.

Your tax return can only be checked and completed in Hungarian, be sure to use a translator or ask a friend for help to make sure you understand your tax return.

What happens if you don’t file a tax return in time?

If you forget to submit your tax return or do it after the deadline, you’ll have to pay a fine for each day you’re late. The amount you pay is calculated by the Hungarian tax authority each day.

Remember, being proactive and staying informed is the best way to handle your taxes. Whether you’re an expat or a local, taking the time to understand taxes in Hungary will save you stress in the long run.