Hungary: planning and implementing activities in the country
- 1. GENERAL PROVISIONS
- 2. RESTRICTIONS FOR CITIZENS OF THE REPUBLIC OF BELARUS AND THE RUSSIAN FEDERATION
- 3. TAXES FOR INDIVIDUALS
Among the requests of our clients in recent years, migration and tax issues in Hungary have often been encountered.
Earlier, we talked in detail about the Hungarian residence permit program for investment, but this is not the only way to obtain migration status and tax residency (if necessary).
Therefore, we have prepared a series of articles on individual issues that will help you evaluate Hungary as a jurisdiction for your future personal and business plans.
1. GENERAL PROVISIONS
- EU membership: since 2004.
- Schengen Area: Included
- Average salary: 636,700 HUF (approximately 1,580 EUR).
- The average price for renting a 1-room apartment in Budapest is about 240,000 HUF (approximately 596 EUR).
2. RESTRICTIONS FOR CITIZENS OF THE REPUBLIC OF BELARUS AND THE RUSSIAN FEDERATION
- Migration: there are no restrictions, it is possible to obtain a National Card and a White Card (residence permit).
- Placement of deposits: limit of 100 thousand euros (according to EU regulations), in the absence of an EU residence permit.
- Opening an account for citizens of the Republic of Belarus and the Russian Federation: banks require a passport or a document on the basis of which an individual has the right to stay in Hungary (residence permit or other). They may also request documents confirming a direct connection with Hungary - a lease agreement, utility bills.
3. TAXES FOR INDIVIDUALS
Criteria for determining tax residency:
- The basic criterion is 183 days during a calendar year.
- If less than 183 days, then on the following grounds:
- Permanent residence in Hungary.
- a centre of vital interests in Hungary, if it does not have a permanent place of residence or has a permanent place of residence outside the country.
- habitual residence in the territory of the country, if he does not have or has not only a permanent residence in the country and his center of main interests cannot be established.
Taxation:
- Personal income tax (here are also dividends) - 15%.
- Mandatory social contributions – 13%.
- Taxes for the self-employed and individual entrepreneurs:
- under the basic regime (for individual entrepreneurs) - personal income tax 15% + social contributions 18.5%.
- under the simplified KATA regime (self-employed and individual entrepreneurs): a fixed amount of 50,000 HUF is paid monthly. In case of exceeding income in the amount of 18 million HUF, 40% of the excess amount.
- under the simplified EVA system (for individual entrepreneurs): usually 40% of taxable income, but taking into account certain limits on expenses + requires accounting.
Principle of taxation of income from sources outside Hungary
Tax residents pay taxes on all their worldwide income. The provisions of the DTT are applicable, in particular, to offset.
Next, we will tell you more about the methods of legalization in Hungary (National Card and White Card), as well as about the taxation of legal entities.
Authors: Zadesenskaya Yaroslavna
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