With the 9% corporate tax rate, Hungary is one of the most attractive destinations for doing business in the European Union.
If you are looking to start a business in the EU, you should take into account registering a company in this Central European country. The low taxes coupled with a stable and well-developed business environment are what make Hungary a very attractive destination for foreign entrepreneurs. But before you set up shop here, it’s imperative for you to learn about Hungary’s corporate tax obligations.
It is important to know that completing a company registration in Hungary is not enough; you need to learn about your obligations in terms of corporate taxes, VAT and other corporate tax reporting.
Understanding Hungary’s Corporate Tax Rate
Corporate income tax or profit tax in Hungary is set at 9%, one of the lowest corporate income tax rates among EU Member States. This corporate tax applies to a Hungarian company’s taxable profit earned during a tax year.
The corporate tax in Hungary is levied on adjusted pre-tax profit. When calculating your profit tax, there are various adjustments and allowances, as well as deductible expenses to consider. Make sure you keep proper accounting records in order to determine the correct profit tax and remain in good standing with the Hungarian tax authority.
Generally speaking, corporations will have a corporate tax advance payment liability during the financial year, depending on your company’s previous tax liability. Also, you need to file an annual corporate tax return with the tax authority (NAV) in Hungary. In most cases, your tax return needs to be filed by the final day of the 5th month after your tax year has closed.
VAT Registration and Applicable Rates
Another important tax to consider in Hungary is VAT. The Hungarian value-added tax standard rate is set at a whopping 27%, one of the highest within the EU. However, there are some goods and services that are taxed at 18% and 5% respectively (reduced VAT).
If your company is conducting any taxable transactions in Hungary, you may be obliged to register for VAT purposes. Depending on the type of company and turnover, as well as business activities and corporate structure, you may need to register for Hungarian VAT. For example, a local small business VAT exemption threshold exists at HUF 20 million as of 2026. Other conditions may apply. Once your Hungarian company is registered for VAT, you will be liable to charge VAT on your taxable sales at the standard VAT rate.
Post-Registration Compliance: Corporate Tax and VAT
So what do you need to keep in mind in terms of Hungarian corporate tax after you have successfully completed a company registration in Hungary? It is important to set up procedures and make sure your company is compliant with all taxes and reporting requirements.
This means you have to keep accurate accounting records, issue the correct VAT invoices and file your corporate taxes on time, according to the tax deadlines imposed by the tax authorities.
The tax authority in Hungary requires local companies to comply with accounting legislation and to file annual financial statements. Furthermore, depending on the nature of your business, other corporate tax reporting obligations may apply, including social security contributions, payroll taxes and other business taxes and levies.
Preparing for Long-Term Business Compliance
If you intend to open a company in Hungary, we advise you to seek help from a professional service provider before you set up shop. Learning about the corporate taxation regime before engaging in company registration (Hungary) will help avoid administrative problems.
You can then proceed with company registration in Hungary with a clearer understanding of the process, as you will already have received information on the company registration process and on how to apply for a tax identification number for your company. If you also work with an accounting service provider who can assist you with filing your tax returns and keeping proper accounting records, you should be fine in terms of taxes when operating your business here.
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