Taxation of Foreign Companies in Hungary
Taxation of Foreign Companies in HungaryUpdated on Friday 24th April 2020
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Corporate tax in Hungary
Resident Hungarian companies as well as non-resident companies are corporate tax payers in Hungary. Business associations in Hungary, Hungarian law offices, foundations and/or public foundations, institutions and single member companies are all taxes on their income produced in Hungary.
While Hungarian based companies, considered Hungarian resident taxpayers, have the obligation to pay taxes on their income from Hungary and from abroad, the taxation of foreign companies in Hungary is different, the latter only being obliged to pay taxes for the Hungarian-source income.
Our Hungarian law firm is experienced in dealing with foreign companies in Hungary and can help you with taxation for foreign companies.
Taxation of non-resident companies in Hungary
The corporate income tax in Hungary is 10% for companies that produce an income of up to HUF 500 million and 19% for the rest of the companies. Non-resident companies in Hungary that perform business activities within a branch in Hungary or another type of establishment are only liable for income tax on their activities carried out at the permanent establishment based in Hungary.
Foreign companies that do not have an operational business unit in Hungary are not subject to corporate income tax of their income produced in the country. The experts at our Hungarian law firm can help you assess the taxable income for your company in Hungary, according to the rules applicable for domestic companies. We will help you calculate the tax base if you are a foreign entrepreneur who has an operating establishment in Hungary.
Taxes in Hungary
Hungary has signed a series of double tax treaties with other countries which are advantageous for foreign businesses that have operational units both in Hungary and in another country. Hungary also imposes a personal income tax and our lawyers in Hungary can give you details about the taxation for individuals if you are living and working in Hungary.
Hungary has no withholding tax on dividends paid by a Hungarian company to another company, wither registered in Hungary or abroad.
For additional information, including tax minimization methods in Hungary, you can contact our Hungarian law firm.