Hungary has the lowest corporate tax rate in Europe: only 9%. This rate is payable regardless of how much your turnover or profit is. Although some countries apply higher corporate tax rates to companies with higher profit, there is no such rule in Hungary. This means that you can take advantage of the lowest corporate tax rate in Europe regardless of your business volume.
In Budapest,the capital of Hungary, you pay a local business tax of only 2% of your profits. In exchange, you get to enjoy all the benefits of having the seat of your business in the geographical center of Europe. Budapest has excellent connections to the rest of the continent by air, land, rail and water. It also has a much lower cost of living than Western Europe, meaning you can employ top talent for more moderate salaries. And, should you decide to live here yourself, you will appreciate the cultural diversity and cosmopolitan atmosphere of the city.
After you paid the taxes on your Hungarian company’s profits, you can choose what to do with your money. You can leave it in the company’s budget to cover further investments, or you can pay some of it to the owners as a dividend. In Hungary, the tax payable on dividends is 15% of the payout. In addition, you need to pay a health contribution of 14%. The health contribution is maximalised in HUF 450,000, which is approximately 1,500 EUR. Read all about the process of getting a dividend in Hungary here.
Value Added Tax or VAT in Hungary is 27%. However, it only applies to domestic transactions in most cases. VAT in international transactions is reclaimable. Consult our guide on how to reclaim VAT in Hungary. If you require further assistance, get in touch with our English-speaking accountants today.
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Company modification is the official procedure through which a lawyer helps you change the core data of your Hungarian company with the Company Registry. One of the cases you need this procedure is when there is a change to the address of any of the owners and main executives.
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