Hungary - Other taxes and levies | KPMG | GLOBAL

Hungary - Other taxes and levies

Hungary - Other taxes and levies

Taxation of international executives

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Social security tax

Are there social security/social insurance taxes1 in Hungary? If so, what are the rates for employers and employees?

Employer and employee

Type of insurance Paid by employer Paid by employee
Pension N/A% 10%
Health insurance N/A% 7%
Labor market N/A%* 1.5%
Social Tax 22% N/A
Total 22% 18.5%

 

The CAP for the pension contribution was abolished as of 1 January 2013.

Individuals falling into the scope of the EU regulation and to bilateral social security totalization agreements or who are citizens of former socialist block countries are subject to Hungarian social security but may apply for exemption in line with the applicable agreements.

Third-country citizen expatriates are not subject to social security, if they are on assignment in Hungary, and their assignment does not exceed two years and none of the above agreements apply.

EEA country and totalization agreement country citizens who are assigned from a non-EEA or non-totalization agreement country to Hungary can be exempt from Hungarian social security contributions if their assignment’s duration is no longer than two years and they can prove that in the country from which they are assigned they are subject to statutory social insurance.

The rates for 2017 are the following. 

  • Employer: 22 percent social tax.
  • Employee: 10 percent pension, 7 percent health insurance, and 1.5 percent labor market contribution.

Certain income items (which are not subject to social security) are subject to a health care charge (generally 22 percent). The charge is payable either by the employer or the employee.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Hungary?

Inheritance and gift taxes

Inheritance and gift tax2 is levied on individuals who acquire property by inheritance or gift, at rates depending on the closeness of the relationship between the deceased and the recipient, as well as on the type of property acquired. Foreign citizens inheriting Hungarian property may also be subject to the taxation.

The rate ranges between 0 percent and 80 percent.

Wealth tax

Local governments may levy wealth taxes3 in the area of their jurisdiction. Building tax is payable by the owner of the building at a maximum rate of HUF 1100 per square meter or 3,6 percent of the adjusted market value of the building. Property tax is payable by the owner of the land parcel at a maximum rate of HUF 200 per square meter or 3 percent of the adjusted market value of the land parcel.

Real estate tax

Are there real estate taxes in Hungary?

Luxury tax

N/A

Sales/VAT tax

Are there sales and/or value-added taxes in Hungary?

Yes, there is VAT at a general rate of 27 percent, however circumstances of the sale should be considered.

Unemployment tax

Are there unemployment taxes in Hungary?

The employee is obliged to pay contributions to the unemployment fund as part of social security.

Other taxes

Are there additional taxes in Hungary that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Local taxes

Certain local taxes5 are payable by the owner of a building or land parcel. The right of the taxation is in the hand of the local governments. The maximum rate of the local communal tax is HUF 17,000 per year for each building/land parcel.

Foot notes

1Hungarian Act LXXX of 1997 on Eligibility for Social Security Provisions and Private Pension and on Funding Such Services. Hungarian Act LXIV of 1998 on Health Care Charge.

2Hungarian Act LXXXXIII of 1990 on Duties.

3Hungarian Act C of 1990 on Local Taxes.

5Hungarian Act C of 1990 on Local Taxes.

© 2017 KPMG KPMG Tancsad Kft./KPMG Advisory Kft., a Hungary limited liability company and a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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