Hungary

An individual is a Hungarian tax resident if they are a Hungarian national, an EEA national holding a Hungarian EEA registration card who spends at least 183 days per calendar year in Hungary, or a third-country national permanently settled in Hungary (or a stateless person). Failing those, residency still applies if Hungary is the person's only permanent home, the centre of their vital interests, or, absent a determinable permanent home or vital-interest centre, if they spend at least 183 days per calendar year there.

The tax year is the calendar year, and returns are due by 20 May of the following year; spouses must always file separate returns. Hungary operates a self-assessment system in which the tax authority prepares a draft return from data already reported to it, which taxpayers review and correct or supplement themselves before submission.

Hungarian personal income tax is assessed on domestic-source income; foreign-source income is additionally taxed only when it is received by an individual who is a Hungarian tax resident. Non-residents are accordingly taxed on Hungarian-source income only.

Hungary provides a family tax allowance for dependent children that scales with the number of children and deducts from the tax base (with a partial offset against social security contributions), plus a separate allowance for couples in their first marriage available for up to 24 months. Further allowances reduce the tax base for individuals under 25 and, subject to conditions on age or number of children, for mothers; since 1 January 2025 the family, first-marriage, and under-25 allowances are restricted to Hungarian, EEA, Ukrainian, and Serbian citizens.

Hungary allows businesses to choose the "alanyi adómentesség" individual VAT exemption where domestic turnover neither exceeded HUF 20,000,000 in the previous year nor is expected to exceed it in the current year. This threshold has risen in stages — HUF 12,000,000 through 2024, HUF 18,000,000 in 2025, and HUF 20,000,000 from 1 January 2026 — with further scheduled increases to HUF 22,000,000 in 2027 and HUF 24,000,000 in 2028.

Hungary exempts a range of services from VAT, including medical, cultural, sporting, and educational services provided as public services, and financial and insurance services; the supply or rental of buildings and the land on which they stand is generally exempt too (excluding building plots), as are intra-Community supplies of goods and services and exports.