When you operate a Hungarian company, you will have to pay business taxes in Hungary. While your accountant can calculate the taxes you need to pay, it is you (or one of your authorized employees) who will need to pay each tax to the Tax Authority.
Business taxes in Hungary
Your Hungarian company will have to pay the following business taxes:
- Corporate tax (also known as profit tax): 9% on your profits; paid yearly, but you are supposed to make advance payments throughout the year.
- Local business tax: at most 2% on your net revenues; paid once or twice a year, depending on your business structure.
- Payroll taxes: personal income tax (15%) and social security contribution (18.5%) deducted from the gross salary of employees, social contribution tax (13%) paid monthly by the employer on top of the gross salary.
- VAT (value added tax, also known as sales tax): 27% on the net price; paid by your client, but you must forward it to the Tax Authority every month or every quarter.
Depending on your business, and on whether you are a tax resident in Hungary, other types of taxes may apply. Before you make any major business decisions, consult your accountant to see if it will include the payment of additional taxes, e.g. when you purchase property for your business.
Paying your business taxes
Business taxes are paid monthly, quarterly, or yearly, depending on the type and size of your business. Your accountant will keep track of this, and they will calculate how much you must pay in taxes. You should pay these taxes in accordance with the instructions of your accountant; you should not wait for a notice from the Tax authority.
In special cases, however, you might receive a note from the Tax Authority that a specific tax should be paid, e.g. after a property purchase. Then you will need to pay this tax within the specified deadline, but feel free to discuss it with your accountant beforehand.
Payment information
Whether the information comes from your accountant or the Tax Authority, it will always include the following details:
- Tax name and code
- Sum to be paid, indicated in HUF
- Bank account number (the account holder will be the “Magyar Államkincstár”, the Hungarian State Treasury)
Normally, business taxes should be paid in HUF with a wire transfer from your Hungarian corporate bank account. Unless otherwise indicated, the comment section of the transfer should include the company’s Hungarian VAT number.
Additional payment options
While some taxes can be paid through EFER by card, the Electronic Payment and settlement system, business taxes, and especially company taxes are typically not among them. Freelancers are better off in this sense, as they can pay most of their taxes through EFER.
In some municipalities, such as in Budapest, the local business tax may be paid by card as well as wire transfer. If your registered seat is not in Budapest, check the information available at your local municipality, or ask your accountant about your options.
Since 2023, the corporate tax and the local business tax may also be paid in EUR or USD. If you want to opt for this option, you must declare your intention in advance. Moreover, you should consider whether you will have enough income in EUR or USD to cover your corporate advance payments throughout the next fiscal year, and the exchange rates and fees at your Hungarian bank.
Payment should come from your Hungarian corporate bank account
Whether you pay by wire transfer or card, in HUF or in a foreign currency, payment should originate from a corporate bank account which belongs to your Hungarian company and which is maintained at a Hungarian bank. If your Hungarian company does not have such a bank account for whatever reason, you can try and make a payment from:
- Your personal bank account;
- The bank account of the parent company;
- Through Wise or any other similar fintech provider.
Forbidden forms of payment
Payment forms not listed above are not permitted for the payment of business taxes. You cannot make a cash deposit in person at the Treasury on behalf of your Hungarian business, and you cannot ask for a yellow check to pay your business taxes at a post office.
If you have issues paying your business taxes in Hungary, consult your accountant to find the solution that works best for your Hungarian company.
About Helpers Finance
Helpers Finance offers precise and convenient accounting, bookkeeping, and payroll related services to small and medium-sized businesses in Hungary, focusing on working with foreign owners and providing them guidance throughout Hungarian bureaucracy. With our help, you will be always up to date about your finances, and you can always ask for additional advisory to make decisions that set your business on a growth curve.
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