Strategic consultancy for your business success

Normally, you pay taxes where you live and where you generate income: this is where you are a tax resident. If these two places are not the same, e.g. because you have income from various countries and/or you travel a lot, determining where you are a tax resident (and where to pay taxes) might become tricky. A tax advisor can help you with this through establishing the following:

• Where is your permanent address (center of vital interests)?
• If you have more than one permanent home available to you, where do you spend most of your time (where is your habitual abode)?
• If the above cannot be established, where are you a citizen?
• If in both or neither, the mutual agreement between the countries in question can provide guidance.

Learn more about tax residency here.

This depends on whether you are a tax resident in Hungary or not.

If you are not a resident in Hungary and you do not have a Hungarian address, you are probably not a tax resident either, and no dividend tax will need to be paid. In this case, however, you will need to provide a tax residence certificate issued by the tax authority of your home country.

If you are a Hungarian tax resident, 15% income tax has to be paid and there is an additional 13% social contribution tax payable which is maximized in HUF 907,296 in 2025.

If you are not sure, consult your accountant. If your case is more complex, you might need to consult a tax advisor too.

Planning is the key to success. If you know the market, the target customers, and the surroundings of the niche your business is set to fill, you can reach your goals with fewer detours, which saves you money – money you can allocate to your business growth.

Market research is more than just browsing the internet looking for “free” information. It is a structured and focused enquiry, concentrating on the sector and audience you want to target. To get reliable results, it requires expert planning, considering both your initial business goals and local business culture.

The short answer is: probably not. The Hungarian labor contract must meet requirements set out in the Hungarian Labor Code. In most cases, it is easier to create a new template based on a consultation about which elements you want to keep than trying to tailor the existing foreign document.

Read more about Hungarian labor contract requirements here.

By default, in case of services provided cross border the place of fulfilment depends on the address / location of the person who receives the service if this person is a legal person (who is subject to VAT and is a VAT payer). If a Hungarian tax entity (who is subject to the VAT act in Hungary) uses such a service, and an invoice is issued by the service provider, the place of fulfilment will be in Hungary, and as such, Hungarian VAT will have to be paid.

The service provider has to issue a net invoice, and the Hungarian Entity has to pay (and may claim back) Hungarian VAT according to the rules of reverse charge VAT in Hungary.

If the service activity falls under the category of self-employment and the private individual cannot provide an invoice, the company has to sign an agency contract with the private individual. The private individual has to declare its tax residency every year according to the rules of taxation by an official certificate of tax residency from their own country’s tax authority (issued in English if possible).

• If this certificate is not available for the year of payment: the individual is considered a Hungarian individual from tax perspective, and the payment is considered as income from self-employment activity in Hungarian personal income tax law and has to be taxed accordingly in Hungary.
• If this certificate is available for the year of payment: in this case, the private individual is considered a tax resident in the foreign country from Hungarian tax perspective, and the double taxation treaty between their home country and Hungary needs to be checked. Most double tax treaties state that in the case of self-employment, the income of the private individual can be taxed in the country of the tax residence of the individual, e.g.: the foreign country. This means that Hungarian entity would pay the agreed, gross revenue to the private individual and it is the individual’s responsibility to file, pay and submit the taxes and contributions of the foreign country in the foreign country.

Hungarian Law defines the characteristics of professional relationships, including employment and partnership. The type of contract you enter should be based on these definitions; if the relationship of you and your partner fits the definition of employment, you should enter an employment contract.

Labor inspectors have the right to investigate the true nature of your partnerships, and based on that re-qualify mandate contracts as employment contracts in case they deem that well-grounded. They may also fine employers who violate the Labor Code by entering mandate contracts on false premises instead of employing someone.

When the operation of the company so requires, the employer is entitled to change the employees’ regular place of work for a temporary period (called secondment). The duration of the secondment cannot be longer than 44 working days a year.

The working place is a statutory element of the employment contract. As a result, if it changes permanently, the employment contract should be modified, unless otherwise agreed by the parties or otherwise provided in the applicable collective bargaining agreement. The employee’s oral consent is not enough.

When moving to Hungary, you will need to register that you are here: get a registration card and register an address where you are going to live. You will also need to register in the social security system and get a Hungarian social security card.

Your employer will need both your registered address and your social security number to register your employment with the tax authority and the social security system. When you get your salary, your employer will deduct the social security contribution (as well as the personal income tax) and pay you only your net salary.

When you start paying social security contributions in Hungary, you have to cancel your registration for national healthcare insurance in your home country, as EU regulations require you to be insured only in one EU country.

The above apply to all citizens of the European Economic Area (EEA): EU member states, Switzerland, Norway, Iceland, and Liechtenstein.

As an EU citizen moving to Hungary, your child will need a registration card and a registered address. Once they become a resident in Hungary, they will be entitled to use the Hungarian healthcare system.

EU regulations require that you pay social security in one EU country. If you are covered for national insurance in another EU country, you can be exempted from paying social security in Hungary. You just need a valid A1 certificate (formerly known as the E101 certificate).

You will need the European Health Insurance Card to access state-provided healthcare during your temporary stay in Hungary under the same conditions and at the same cost (free in many cases) as people insured in Hungary. Cards are issued by your national health insurance provider.