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Generic Tax Name Personal income tax
Tax name in the national language Személyi jövedelemadó
Tax name in English Personal income tax
Member State HU-Hungary
Tax in force since 1988/01/01
If abolished, date on which the tax ceases to apply
Business version date 2012/01/01
Version date 2012/04/12
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax

Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco

Social security contribution Employers
Legal base

Act 117 of 1995 on personal income tax.

Who sets
The tax rate is set by

The tax base is set by

The reliefs are set by



Geographical Scope


Domestic-source income of non-residents is Taxed
Not Taxed

Employment incomes of married couples are Taxed jointly
Taxed separately


Resident individuals are obliged to pay personal income tax.

Tax object and basis of assessment
As general rule, taxable income under personal income tax includes


Among others pension income, inheritance and most kinds of state scholarships are tax-exempt revenues.

Income considered Domestic income
Worldwide income (subject to double-tax relief)

Resident private individuals shall be subject to tax liability in respect of all their income (all-inclusive tax liability). The tax liability of non-resident private individuals shall apply to income that originates in Hungary as the place of gainful activity or is taxable in the Republic of Hungary by virtue of international agreement or reciprocity (limited tax liability).

Benefits in kind
The following benefits in kind are usually (partially or fully) taxable


The company has to pay tax after a company car under the Act LXXXII. of 1991 on vehicle tax. The use of a company car is not levied on the individual. 

The employer pays tax after low interest loans, meal cheques, meals at cantine, IT and telecommunication services, public transport according to Act CXVII. of 1995 on Personal Income Tax. If meal cheques, meals at cantine, IT services exceed a limit, the excess is taxed be the employee.

If phone or computer devices are given in connection with the work of the employee, thay are taxed. If parking or accomodation is given in connection with a business trip, it is not taxed.

Day-care for children under 3 is tax free (day-care service), between 3-6 is taxable (kindergarten service).


Resident individuals' income.

Individuals are subject to income tax on all items of income. The personal income tax law distinguishes the following categories of income:

  • Aggregate income (including income from dependent personal services, income from independent personal services and other aggregate income). The tax base of aggregate income contains the income and a 27% tax base increasing element (gross up), for aggregate incomes above HUF 2,424,000 (27 is equal to the social security to be paid by the employer). Tax allowances can be applied against aggregate income.
  • Incomes taxed separately (including entrepreneurial income, income from capital - like dividends, interest and capital gains -, benefits in kind, miscellaneous incomes like small receipts).

 As of 1 January 2012 the tax rate is 16% in all categories of income.

Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:


1. Employment income

No deductions are allowed.

2. Self-employment income

The following may be deducted from the revenues from self-employment activities when determining income:

a) expenses actually incurred and substantiated during the tax year in connection with the activity, up to the amount of revenues produced by such activity (itemized expense accounting), or 

b) 10 per cent of the revenues from the self-employment activity (10 per cent expense ratio).

Deductions from the tax base
The following items are usually (partially or fully) deductible


The basic yearly allowance for an individual amounts to: 0.00  EUR/National currency
The basic yearly allowance for a couple amounts to: 0.00  EUR/National currency
Additional allowance for 1st child 750,000.00  EUR/National currency
Additional allowance for 2nd child 750,000.00  EUR/National currency
Additional allowance for 3rd child 5,925,000.00  EUR/National currency
Additional allowance for additional child 2,475,000.00  EUR/National currency
Additional allowance for old age dependents 0.00  EUR/National currency

The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:


Tax credits as of 1 January 2012:   

- Credit of disabled persons: In respect of severely handicapped private individuals, on the basis of a statement verifying such condition, an amount equal to 5 per cent of the prevailing monthly minimum wage in effect on the first day of the tax year (personal allowance) may be deducted each month from the tax on the consolidated tax base, as of the first day of and for the duration of the disability.

- Tax credit of small-scale agricultural producers:

· Small-scale agricultural producers (including agricultural smallholders using flat-rate taxation) with revenues less than HUF 600,000 annually from such activities shall not be required to consider income from such revenues, while if revenues exceed the above amount, income shall be determined based on all revenues included.

· The collective amount of the tax of the annual income of a small-scale agricultural producer, using itemized expense accounting or 10 per cent expense ratio, earned by such activities and, if using itemized expense accounting, of the bookkeeper's fee allowance, but no more than 100,000 forints (small-scale agricultural producers' tax allowance), may be deducted from the tax of the consolidated tax base.

- On the basis of contributions to voluntary mutual pension health a tax refund of 20% is applicable. This tax refund (cash transfer) is payable to the taxpayer's individual account held with such mutual funds. The aggregate amount of all the transfers may not exceed HUF 120,000 (HUF 150,000 for individuals who will reach the retirement age before 1 January 2020).

Losses can be
Carried-forward for Indefinite
Carried-back for Indefinite
Transferred to spouse or partner

Losses can be carried-forward and carried-back by private entrepreneurs and small-scale agricultural producers with a size limit of 50% of the tax base calculated without the losses.

The following income is exempted from income tax


- zero per cent on any time deposit interest established on the last day of the five-year term;

- 10  per cent, if the private individual did not renew the existing deposit, on any time deposit interest established on the last day of the three-year term, or e xtends the time deposit for only a part of the funds originally deposited, on any time deposit interest established on the last day of the three-year term as commensurate for the funds withdrawn, or terminates the deposit upon maturity of the two-year term, on any time deposit interest established on the day of termination;

- 16 per cent, if the private individual terminates the deposit before maturity of the three-year term, on any time deposit interest established on the day of termination.

The private individual is not required to declare his income from long-term investments if the applicable tax rate is zero per cent. In other cases the private individual shall assess the tax in his tax return, and shall pay it by the deadline prescribed for filing this tax return.

Interest from special savings accounts (Income from long term investment):

'Income from long-term investment’ shall mean the profit the private individual has realized through placing a sum under a long-term investment contract concluded with an investment service provider or a credit institution [“time deposit interest”]. The tax rate shall be:



Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To   EUR/Natcur
Rate: 16.00 %

Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:

Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:

Special surcharges
There are special surcharges in the form of:

Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc) 16.0 %
Pension income
Owner-occupied immovable property 16.0 %
Dividends 16.0 %
Interests from government bonds 16.0 %
Interests from corporate bonds 16.0 %
Interests from special saving accounts
Interests from deposits 16.0 %
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property 16.0 %
Capital gains on movable property 16.0 %
Annuities from life insurance
Prizes and awards
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities 16.0 %

Tax base of

- benefits in kinds (meal contribution, holiday contribution, schooling contribution, educational expenses contribution, public transport, contributions to supplementary pension funds, health funds) and

- non-monetary revenues from games activities

is 1.19-fold of the value of the income. 

Withholding taxes
The tax is withheld when paid to residents on: Dividends: 16.00 %
Final Creditable
Interests from governments bonds: 16.00 %
Final Creditable
Interests from corporate bonds: 16.00 %
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits: 16.00 %
Final Creditable



Tax due date

Taxpayers are obliged to make advance payments of personal income tax during the tax year receiving income from aggregate income category. Income tax returns for a tax year must be filed by 20th of May (in the case of entrepreneurs, by 15th of February) of the year following the tax year. If the amount of tax actually paid in the tax year differs from the final tax liability, the difference (i) is payable by 20th of May of the following year, or (ii) is refundable by the tax authorities within 30 days of the taxpayer's claim.

Tax collector

The tax is collected by the Tax and Financial Control Administration.

Special features

Economic function


Environmental taxes

Tax revenue
ESA95 code d51m (d51a + d51c1)

Annual tax revenue (millions)
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2010 1,734,663.00 HUF 6.41
2009 1,897,169.00 HUF 7.22
2008 2,033,568.00 HUF 7.52
2007 1,816,574.00 HUF 7.11
2006 1,599,001.00 HUF 6.62
2005 1,449,725.00 HUF 6.46
2004 1,363,283.00 HUF 6.49
2003 1,325,273.00 HUF 6.95
2002 1,294,413.00 HUF 7.43
2001 1,142,892.00 HUF 7.43
2000 961,482.00 HUF 7.22