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8.1.1. Other Taxes

The following table provides an overview of other taxes that may be imposed on a company doing business in the country.

Tax Type Rate(s) Notes
Capital Duty Nil There is no capital duty in Hungary.
Payroll Tax Nil There is no payroll tax separately due by companies on their total payroll expenditure. Employers are required to withhold income tax and social security premiums on behalf of their employees under the PAYE system.
Employer Social Security Contribution 13% (reduced from 17% effective 1 January 2022) Effective 1 January 2022, the 1.5% vocational training contribution is abolished and the employer social contribution is reduced by 2.5 percentage points. The effective contribution rate now is 13% which is reduced from 17% (i.e., 15.5% + 1.5%). Employer social security contribution is based on gross salary. Partial or full relief from the social security contribution is available under various employment promotion programs. The minimum social security contribution is based on the standard minimum monthly wage which is set at HUF 200,000 for full-time employees (HUF 260,000 for skilled employees) for 2022.
Employee Social Security Contribution 18.50% Employee social security contributions are based on gross salary and are withheld and remitted by the employer. Partial or full relief from social contributions is available under various employment promotion programs. The minimum social security contribution is based on the standard minimum monthly wage which is set at HUF 200,000 for full-time employees (HUF 260,000 for skilled employees) for 2022.
Building and Land Tax Varies Building tax and land tax may be imposed at the municipal level on all types of buildings and land, subject to certain caps. For buildings based on floor space, the cap is HUF 1,100 per square meter. If based on the adjusted market value, the rate is capped at 3.6%. For land based on area, the cap is HUF 200 per square meter. For land based on the adjusted market value, the cap is 3%.
Transfer Tax 2% to 4% The transfer of Hungarian real estate or shares in companies holding Hungarian real estate is subject to transfer tax payable by the purchaser. The rate is 4% of the value of the property up to HUF 1 billion and 2% on the part of the value exceeding HUF 1 billion. However, the total tax liability is capped at HUF 200 million per property. The purchaser is obliged to pay transfer tax on the acquisition of a real estate holding company provided that the purchaser acquires (by itself or together with its related parties) more than 75% interest in the real estate holding company. A company qualifies as a real estate holding company if more than 75% of its total assets (less financial assets and receivables) consists of real properties (at book value) or it has at least 75% direct or indirect stake in another company that satisfies this criterion. Intra-group transfer of a real estate or a real estate holding company is generally not subject to transfer tax.
Stamp Duty Varies Stamp duty applies for various procedures requested from public authorities and courts, such as company registration, property ownership registration, etc.
Excise Taxes Varies Excise taxes levied on certain goods such as hydrocarbon oil, alcoholic drinks and tobacco at various rates or ad valorem. This single-phase tax is levied on the manufacturer, importer or wholesaler; however, no tax is imposed on export sales.
Customs Duty Varies Custom duties are imposed on certain goods imported from outside the European Union.
Local Business tax Up to 2% All local governments are entitled to levy certain types of local taxes up to the ceiling set forth in the relevant regulations. The basis of the local business tax is the net turnover of the enterprise decreased by certain eligible expenses (e.g., material costs). The tax rate is determined by the local government, but may not exceed 2%. The capital city Budapest and most other large cities have set the rate of the local business tax at the maximum allowed 2%. However, some municipalities apply a lower rate or no local business tax at all. No local business tax is payable on dividends, interest (except for certain financial institutions and insurance companies) and royalty income. Effective 1 January 2021, the Hungarian government provided a reduction of 1% in the local business tax to support small and medium-sized enterprises (SMEs) due to the COVID-19 pandemic.
Special Industry Taxes Varies The Hungarian government has introduced over the past few years a number of industry-specific taxes. Hence, special taxes are levied on financial and insurance service providers, on telecommunication companies, on energy suppliers and on advertising activities. Such taxes are payable based on the commission revenue of financial service providers, the balance sheet total of credit institutions, certain insurance premiums paid to insurance companies, the turnover of energy suppliers and the revenue generated from advertising activity. However, the tax levied on revenue from advertising activities has been set to 0% until 31 December 2022. Additionally, telecommunication companies and energy suppliers are also subject to a public utility tax which tax is imposed on the owner of the public utility lines. The basis of the tax is the length of the utility lines. In addition, as of 2015, investment funds are also subject to special taxes.
Retail Surtax 0%-2.7% A retail surtax applied in Hungary in the years 2010-2012. The tax was unsuccessfully challenged before the European Court of Justice (ECJ) in the Tesco case. It has been reintroduced effective 1 May 2020 in a modified form as part of the COVID-19 pandemic tax measures but is intended to apply permanently. The new retail tax applies to all retail sales covered by the Hungarian statistical classification TEÁOR ’08 (equivalent to the EU NACE Rev. 2 classification) which includes inter alia foodstuffs, beverages, clothing, furniture, medicines, toys, sports, books, tobacco, home appliances, fuels, and motor vehicles and their parts. It is immaterial whether the goods are sold in traditional shops or through the internet. The tax also applies to non-residents without a permanent establishment in Hungary but engaged therein in retail sales through distance selling or through a delivery point in Hungary. The tax is due at progressive rates and the tax base is determined as the annual net sales revenues as increased by the amount of revenue resulting from services provided to the suppliers and discounts received from them. The tax rates are: Up to HUF 500 million - 0%, between HUF 500 million and 30 billion - 0.1%, between HUF 30 billion and 100 billion - 0.4%, and above HUF 100 billion - 2.7% (increased from 2.5% effective 1 February 2022).