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2024 changes to taxes in Hungary

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2024 changes to taxes in Hungary

Last week the 2024 changes to taxes in Hungary were announced. While the package a number of tax increases to counter inflation, most taxes directly relevant to doing business, such as corporate tax and payroll taxes remain the same. Read on to see what’s new.

Special taxes on specific products

To harmonize legislation with EU law, special taxes introduced during the state of emergency are integrated into the standard tax regulations.

  • Special taxes on specific fuels such as LPG becomes an excise duty
  • Special taxes on airlines are converted into an environmental protection tax

At the same time, the excise duty on tobacco products increases, just as the number of products subject to the public health product tax. New items include breakfast cereal with a high sugar content and various sugar-coated nuts, seeds, fruits and vegetables, as well as fruit juices with a fruit content below 50% (currently it is 25%).

Banking and financial transactions

The current 0.3% transaction fee remains the same. However, as of 2024 the maximum fee is increased to HUF 10,000 per transaction. The regulation will now extend to foreign financial service provider as well if they handle transactions for Hungarian tax residents (referring to Revolut and Wise). Transactions below HUF 20,000 remain exempt, just like transactions managed by Magyar Posta (Hungarian Post) and the Hungarian Treasury remain exempt.

Taking interest from your long-term deposits or other investment constructions is subject to the 13% social contribution tax as well as the 15% interest tax; this will not change in 2024.

At the same time, trusting wealth to a trust fund will be considered a type of sale, and it is becoming subject to dividend tax (15%), alongside any interests taken from the trust fund.

Payroll taxes and tax benefits remain the same

Payroll taxes remain the same, including personal income tax, social security contribution, and the social contribution tax. Minimum wage will probably increase starting from 2024, but it has not yet been announced.

Employees in creative professions may pay taxes for the part of their salary above minimum wage according to EKHO. Under EKHO, employers are not required to pay the social contribution tax; this exemption remains in place.

The family tax benefit stays the same as in 2023, increasing proportionately to the number of children, distributable among parents.

Corporate tax still the lowest in the EU

Corporate tax remains 9%, which is still the lowest in the EU. The same is true for KIVA (at 10%), the tax regime created specifically for small businesses. HIPA, the local business tax remains 2% at most (depending on the local municipality), while the tier system introduced as of 2023 make it more beneficial to businesses. Both TAO and HIPA may be paid in foreign currencies (EUR or USD) if you think that is better for your company, you just need to make an announcement in advance.

For now, there is no indication about the introduction of the global minimum tax, which is supposed to be implemented for companies with a global revenue above EUR 750 million starting from 2024. Those decisions will probably be made later this year.

Helpers Finance is your ally in accounting

The latest updates to tax regulations in hardly affect company operation in Hungary, which remains a welcoming environment if you are planning to move your business to the EU. The Helpers Team provides comprehensive services from company formation in Hungary through accounting and other business support, as well as residency application for the director and the employees. Whatever you need, we are confident we can find a solution tailored to your business.

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