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Bringing employees to Hungary – Work permit or Intra Corporate Transfer?

February 14, 2020

In an international company, it often happens that the expertise of a valued colleague is indispensable at a business location in another country. In such a case, the employee sent abroad will some kind of a permit to start working abroad.

Work permit for working in a foreign country

If the employee is a national of a non-EU country and is entering the EU for their temporary deputation, they will need a work permit.

In some special cases, the employee might apply for an intra corporate transfer permit, which offers added benefits to both employer and employee.

The main benefits of the Intra Corporate Transfer

When an employee arrives to Hungary with a regular work permit, they will be employed be the Hungarian company. They will pay employment related taxes in Hungary, and they will be insured in the Hungarian social security system.

In some cases, it is more beneficial if the employee can remain officially on payroll at the sending company, in their home country, and if they can also continue to be insured there. This is made possible by choosing the intra corporate transfer permit.

Remaining employed by the home country may be taxation-related advantages, as the employee will continue to be insured in their home country. In general, if they spend more than half a year (183 days) in Hungary, they become liable to pay income tax in Hungary; however, there are double taxation treaties in place between Hungary and most other countries to avoid paying taxes twice. In any case, it is worth asking for tax advisory before deciding between the regular work permit and the Intra Corporate Transfer permit.

Requirements for choosing the Intra Corporate Transfer permit

The employee may receive an Intra Corporate Transfer permit in Hungary if

  • the sending and receiving companies belong to the same group of companies, e.g. the Hungarian company is a subsidiary of the foreign company, or both companies are subsidiaries of the same entity.
  • the transfer of the employee is necessary for a limited time (at most 3 years)
  • the employee has been working for the sending company for at least 3 months
  • the employee is appropriately qualified for the position available at the receiving company (this must be supported by the right certifications)

When choosing the Intra Corporate Transfer permit, please keep in mind that

  • the Hungarian salary of the employee must be in line with Hungarian market salaries, even though it will be paid by the sending organization
  • the permit cannot be extended after 3 years; after that, the employee either has to leave Hungary or apply for a regular work permit and transfer fully to the Hungarian company
  • the time spent in Hungary with the Intra Corporate Transfer permit will not count when calculating time spent in Hungary for the application for permanent residency (since the ICT permit is a temporary one)

Which to choose? Work permit or Intra Corporate Transfer?

Feel free to ask for a consultation, and let us help you make the right choice. Just fill in the form below the article!

Are you planning a more complex project? Let us help you assess your progress. If you fill out the survey on the below link, you can check on all the most relevant aspect for getting work permits (or intra corporate transfer permits) for your employees for your Hungarian project, and in the end you can even ask for a tailored quote.

Summary table: work permit vs. Intra Corporate Transfer

  Work permit ICT
employee will be on payroll at the Hungarian company at the sending company
employee has been working for the sending company N/A for min. 3 months
employee must be appropriately qualified yes yes
salary must be in line with the Hungarian market yes yes
the sending and receiving companies must be related no yes
permit validity based on contract, max. 2 years based on contract, max. 3 years
permit can be extended unlimited up to 3 years

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