A company can find many uses to a car. However, costs will not only include fuel and maintenance, but also the company car tax, which in Hungary must be paid quarterly after every passenger car – and which has just got raised for H2 2022.
Which vehicles does company car tax refer to?
The company car tax refers to passenger cars owned by a Hungarian company and registered in Hungary (has a Hungarian registration number and a Hungarian number plate). In this sense, a vehicle is considered a passenger car if:
- it has 3 or 4 wheels;
- it can transport at most 8 people (including the driver);
- it is fueled by diesel, gas (meaning gasoline or petrol), or natural gas (compressed or liquified); electric and hybrid cars are exempt.
The company car tax also applies to
- racing cars;
- golf cars;
- motor caravans;
- mixed used vehicles under 2,500 kg if they can transport more than 2 people.
Other cases where the company car tax might be relevant:
- When the owner is a natural person, but the company declares costs on it (e.g. for fuel or maintenance; this is most relevant for private entrepreneurs who use their own car for business purposes);
- When costs are declared on a car with foreign registration (this might be relevant if an employee goes on a business trip abroad and rents a car locally).
Leased cars at your Hungarian company
It is often more cost-effective to lease cars instead of buying them. In these cases, the owner will still be a Hungarian company – just not necessarily yours. Here company car tax also applies, and it will be paid by the owner of the car. However, with leased cars the owner depends on the type of leasing.
- Finance lease: at the end of the leasing period, the user gets to purchase the car. Throughout the lease, the car is treated as owned by the user, so the user must pay the company car tax.
- Operating lease: at the end of the leasing period, the user gives back the car. The car is owned by the leaser, and they must pay the company car tax. (However, the tax is usually incorporated in the leasing fee. In line with this, with the current tax raise, leasing fees might increase too.)
When a company uses leased cars, it must be considered who will be the official keeper (or operator) of the leased car. This is important because there is a vehicle tax that must be paid after every vehicle registered in Hungary depending on the weight of the car. If the owner and the keeper of the company vehicle is the same legal person, the vehicle tax can be deducted from the company car tax. However, if the owner and the keeper are different, the vehicle tax cannot be deducted.
Company car tax calculation
The company car tax depends on how powerful and how environmentally friendly the car is. In line with this, electric and hybrid cars are exempt from the company car tax.
Both of the above indicators can be checked on the registration certificate of the car. Power, or rather, engine performance, can be found under “P.2”, and it is indicated in kW. Environmental classification is indicated in section “V.9”, and it will be a number between 0 and 15.
The company car tax is paid quarterly in Hungary, and for the next two quarters (between 1 July and 31 December 2022), it is significantly increased. The raise is supposed to effect only the next two quarters, after which it should be overturned.
| Performance (kW) | Environmental classification | ||
| 0-4 | 6-10 | 5; 14-15 | |
| 0-50 kW | HUF 30,500 | HUF 16,000 | HUF 14,000 |
| 51-90 kW | HUF 41,000 | HUF 20,000 | HUF 16,000 |
| 91-120 kW | HUF 61,000 | HUF 41,000 | HUF 20,000 |
| 120+ kW | HUF 81,000 | HUF 61,000 | HUF 41,000 |
Accounting must consider company cars
Whether your Hungarian company owns or operates passenger vehicles in Hungary, they will be subject to company car tax. Before making an investment, ask your accountant about your options to make a financially sound decision. Helpers Finance has ample experience in handling company assets as well as in all other accounting tasks, and that includes handling the company car tax too.
Need an accountant whose experience includes working with foreign owners of small and medium-sized companies in Hungary? Contact us today!