Taxation in Hungary 2019
The taxation system in Hungary is one of the most favorable in comparison with other jurisdictions. In this country, low tax rates. The obligation to pay arises from both local residents and foreigners. In some cities, payments are taken even from tourists.
Types of taxes and features of payment
The main types of payments can be divided into several types. There is income tax, as well as on profits, VAT and social. Persons working in the country, as well as having income in Hungary, must pay income tax. If the Hungarians work outside the territory of the state, they are also required to pay the amount. The tax rate is 16%.
Another tax that is required to pay - on profits. What legal entities are required to pay corporate tax:
• Joint-stock companies;
• Limited liability companies;
• Some companies are non-residents, etc.
The rate is 10% if the base for taxation is less than 500,000,000 forints. Otherwise the rate rises to 19%.
VAT in Hungary must be paid by legal entities. Even if the payer does not have a registration, but conducts work in the country, he must get a number in the tax office and pay the bill. The VAT rate is 27%, the smallest percentage is 5%. The minimum rate applies to products for medicine, books.
The average rate of 12% applies to food, medicine, and some services. The rate is reduced to 18% for a number of products. Part of the goods is completely exempt from paying VAT.
In addition to employee benefits, an employer in Hungary is obliged to pay social tax on pension protection, medical insurance, and the employment fund. Individuals are not exempt.
Individuals are required to pay tax on real estate, inheritance, donations, transportation, etc. The country also has a tax on harmful food - for example, chips, cakes, energy. This is how a healthy lifestyle is promoted in the country. Failure to pay tax is considered a violation, the perpetrator pays a fine.
In Hungary, there are two forms of tax relief - deduction and direct credit. Loans are provided for individuals (families with 3 or more children). A loan for a resident is up to 18% of salary subject to a certain income. There are deductions to study at the university, pay for hostels, etc.
Some allowances are not subject to income tax, as well as insurance payments and scholarships, subsidies for the purchase of real estate. According to the results of the financial year, a family with children may receive a tax deduction in the prescribed amount.
There are benefits for the newlyweds after the first marriage, as well as for disabled people, home buyers. You can find out in more detail what documents are needed for registration of benefits, from our IT-OFFSHORE specialists.