Page 26 - CEE Tax Guide 2025

Hungary

Forvis Mazars Kft.
Váci Greens Office, Building F,
Fiastyúk utca 4—8, 2nd floor,
H-1139 Budapest, Hungary
Phone: +36 1 429 3010
www.forvismazars.com/hu

Corporate taxes and other direct taxes as well as for R&D activities. Hungary provides a tax
exemption for holding structures: capital gains
In Hungary, a corporate income tax rate of 9% on shares and intellectual property under certain
is applicable, which is the lowest rate in the EU. The conditions are tax free, and a 50% tax allowance
tax base is the adjusted pre-tax profit. Losses can is applicable on royalty incomes.
be carried forward for 5 years and may be used
to reduce the tax base up to a maximum of 50% There is no withholding tax on dividends, interest,
of the tax base. Thin capitalization rules have been and royalties paid by a Hungarian company
replaced by the interest-limitation rules set out to a foreign company. Hungary has a wide
by ATAD (30% of EBITDA or approx. MEUR 2.5). international treaty network with more than
Exit tax and hybrid mismatch regulations are also 80 treaties on the avoidance of double taxation.
applied. Group taxation is available in Hungary However, the United States-Hungary tax treaty has
for CIT purposes, which allows related parties been terminated as of 2024.
to avoid some of the transfer pricing documentation Local business tax of up to 2% is payable on net
obligations. IFRS accounting is optional for larger sales revenue. A number of windfall taxes have
companies (above approx. MEUR 1.5 of revenue been introduced for the financial years of 2022-
or 50 employees) and is obligatory for financial 2024. Some of those have been already abolished
institutions and listed companies. There is a wide (e.g. windfall taxes for producers of pharmaceutical
range of tax allowances for new investments,
drugs); however the Government extended the
effect of windfall taxes for the banking and insurance
Transfer pricing in Hungary
sectors, futhermore for energy suppliers till
Arm’s length principle Since 1996 the end of 2025.
Documentation liability Since 2003
VAT and other indirect taxes
APA Since 2007
The standard VAT rate is 27%, while the reduced
Country-by-Country Since 2016
liability rates are 18% (e.g. bread, milk) and 5% (e.g. some
dairy products, eggs, newspapers, books, medicines,
Master file-local file Since 2018
(OECD BEPS 13) certain meat products, new residential real estate,
applicable internet access services, accommodation services
and restaurant services). Hungary introduced
Penalty
a number of measures aimed at enforcing the law,
lack of documentation TEUR 12 / missing such as the online cash registers and domestic
documentation, doubled
for a recurrence sales reports. Taxpayers are required to use billing
software capable of automatically providing the tax
tax shortage 50% on tax
underpayment+ authority with real-time invoice data. Thus, from
late payment interest 2021, each invoice is essentially reported to the tax
authority in real-time. The so called e-VAT system
Related parties > 50% Direct or indirect
control or common has been introduced in 2024 with the aim of making
managing director. VAT administration easier. Under the new regime,
Safe harbors Low value-added services: the Tax Authority provides taxpayers with draft VAT
3%—7% mark-up. statements based on online invoice reporting data.
Level of attention paid 9/10 Other indirect tax types in Hungary include excise
by Tax Authority duty on energy products, alcohol and tobacco

Central and Eastern European tax guide 2025 Forvis Mazars 26