In Hungary, spending company money is strictly regulated. If you buy things for your company, you simply need an invoice. If you want to buy things for yourself, you take salary or dividend. Let us show you the basics – and make sure to consult your accountant when in doubt.
You can spend company money easily, but everything you buy with company money should be related to the operation of your company. You also have to ask for an invoice for each service you receive and submit it to your accountant. (Learn more about expense invoices here.)
If you want to spend company money on personal purchases, you will need to take dividend from your company, after which you pay dividend tax. The dividend will already be your own money, which you can spend any way you see fit.
Taking dividend from your Hungarian company is strictly regulated, so always consult your accountant before you decide to do so.
As managing director of your Hungarian company, you are allowed to perform management related tasks for your company without a work permit, but you cannot take a proper salary for it. Basically, if you are a one-man company, you cannot be employed by yourself.
However, you can still perform not management related tasks for your company, e.g. if you have a company offering IT solutions, and you want to work as a programmer through your company. In that case, you will be able to perform work for your company for a salary but without being employed in the traditional way. For that, you will need a resident permit, a work permit, a social security number and a tax number, just like any regular employee (while you did not need the first three documents if you performed only management related tasks). The contributions to pay are also the same as if you were employed.
Just like you were a regular employee, your accountant will have to declare you working for the company to the Hungarian Tax Authority. You will be required to sign an attendance sheet, and you will receive monthly salary after the end of each month (so at the beginning of the next month). You will be able to spend your salary any way you want to.
If you want to spend company money, consult your accountant. If you let them know how much company money you want to spend on what, they will be able to tell you which is the most cost-effective way to do so. This saves you time, effort, and money, while you remain compliant with Hungarian regulations.
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