Tax & Accounting
If you are looking for a trustworthy partner to assist you in managing your financial matters in Budapest, look no further than Budapest Consultans.
Budapest Consultans is a leading accounting, business and fiscal advisor with over 30 years of experience in the industry. Their extensive knowledge, local expertise, and strong global network will prove invaluable to you, whether you’re a business or an international client.
The Budapest Consultans assists expats in:
- Bookkeeping and Payroll Accounting
- Tax Counselling and Fiscal Representation
- Corporate Finance
Tax & Accounting for Expats in Budapest
A key central location, strong connections with foreign markets, low living cost as well as the growing economy, makes Budapest a very favourable destination for expats who are planning to set up a business or looking forward to enhancing their career prospects.
Key Tax & Accounting tips you should know as an expat in Budapest
- The fiscal year in Hungary begins on 1 January and ends on 31 December of the same year.
- You are only required to file tax returns if you receive income from more than one sources, otherwise, your taxes are deducted by your company on a monthly basis.
- As an expat in Budapest, you are only required to pay tax on your income earned within the country. If you stay for more than 183 days in the country, you will be classified as a permanent resident and be required to pay tax on your income earned in both Hungary and abroad.
- As a resident, you are required to register as a Hungarian taxpayer and request a tax identification number, after which the tax authority will issue you a tax card.
- Hungary has a flat income tax rate of 15%.
- Hungary has double taxation agreements with a number of countries. In order to avoid paying tax in two countries, it’s best to consult your case with a professional tax advisor who is familiar with the cross-border taxation of your home country.
Tax & Accounting for expats establishing a business in Budapest
- Hungary has very favourable conditions to operate a business with a corporate tax rate as low as 9%, which is the lowest in the EU.
- Your company is deemed a resident if its effective primary management site is in Hungary.
- As a resident company, you will be taxed on worldwide income. Non-resident companies are subject to corporate income tax on their income from the business activities of the branch in Hungary.
- Capital gains are part of the corporate tax base and are taxed at the standard rate of 9%. Some types of capital gains are tax-exempt, it’s best to consult with a reputable tax advisor to help you efficiently handle your tax obligations on capital gains.
- The dividends that are paid to owner companies within the country and abroad are not taxed.
- The general VAT is 27%, however, exemptions may apply for specific cases.
- It’s highly recommended to find a competent and highly professional accountant who will be responsible for meeting financial requirements for your business such as, submitting periodic reports to the Tax Office, the Statistics Bureau, the Health Authority, and other governmental and municipal authorities.
- Your company is required to annually produce a balance sheet, a profit and loss account and an appendix.
- The deadline for submitting financial statements is the last day of the fifth month following the balance sheet date of the fiscal year, which harmonizes the deadline for submitting the statements with the tax return filing date for calendar-year companies.
- Non-consolidated financial statements of your company are required to be prepared to provide a basis for the determination of corporate income tax, with certain adjustments.
- Financial statements of your business may be prepared in HUF, euros (EUR) or US dollars (USD), or alternatively in other currencies, if certain conditions are met.
- Public companies limited by shares have more extensive reporting and disclosure obligations.
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