iCalculator™ HU: Hungary Tax Calculators

Welcome to iCalculator™ HU, your comprehensive suite of free tax calculators for Hungary. iCalculator™ has provided free tax calculators for Hungary since 2019. Since those early days we have extended our resources for Hungary to includes Tax Guides, Tax Videos and enhanced the tax calculators and supporting tax information. The Hungary Tax Calculator and salary calculators within our Hungary tax section are based on the latest tax rates published by the Tax Administration in Hungary. In this dedicated Tax Portal for Hungary you can access:

Hungary Tax Calculator 2023/24

The Hungary Tax Calculator below is for the 2023 tax year, the calculator allows you to calculate income tax and payroll taxes and deductions in Hungary. This includes calculations for

1. Employees in Hungary to calculate their annual salary after tax.
2. Employers to calculate their cost of employment for their employees in Hungary.

Overview of Taxation in Hungary

Taxation in Hungary comprises several types of taxes levied by both national and local governments. The tax structure includes income tax, social security contributions, corporate tax, and value-added tax (VAT), among others. A notable aspect of Hungarian taxation is the relatively low percentage of local taxes compared to the EU average.

Income tax is levied at a flat rate and provides allowances for families, which can be split between spouses or life partners. VAT is differentiated by various rates depending on the goods and services, with a standard rate being one of the highest in the EU. Corporate tax in Hungary is notably the lowest in the EU, and employment income is subject to social security contributions at a flat rate.

Tax Compliance and Procedures:

• Corporate Income Tax (CIT) must be calculated according to the accounting year, with returns due by the last day of the fifth month following the accounting year.
• Tax returns can be submitted electronically or in paper format, with certain entities mandated to file electronically.
• Tax audits are conducted based on a risk assessment model, with a typical audit lasting 90-120 days.
• Penalties for non-compliance can include default penalties, late payment interest, and charges for incorrect returns or late submissions.

Regarding VAT, Hungarian regulations stipulate detailed requirements for invoices, including information such as the tax identification number and a description of the goods or services supplied. Taxpayers have the right to correct their tax returns before audits begin, which could lead to a self-revision surcharge.

For businesses operating across borders, Hungary allows VAT reclaims for taxpayers registered in another EU member state without a permanent establishment in Hungary. Non-EU businesses can also reclaim VAT, based on reciprocity agreements.

The Hungarian tax authority is stringent about data reporting obligations, with substantial penalties for non-compliance. This includes the necessity to report outgoing invoices and submit recapitulative statements and EC Sales Lists for intra-community transactions.

1. Income Tax: Levied at a flat rate with allowances for dependents, fostering a simplified tax calculation process.
2. VAT: Charged at various rates, with requirements for detailed invoicing and options for reclaim by foreign businesses under specific conditions.
3. Corporate Tax: Attracts businesses with the lowest rate in the EU, aiming to stimulate economic growth.
4. Tax Compliance: Detailed tax return and audit processes with an emphasis on electronic submissions and data reporting to maintain tax integrity.