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Generic Tax Name Local business tax
Tax name in the national language Helyi iparűzési adó
Tax name in English Local business tax
Member State HU-Hungary
Tax in force since 1991/01/01
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/02/17
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 100 of 1990 on local taxes.

Who sets
The tax rate is set by

The tax base is set by

The reliefs are set by



Geographical Scope

The territory of local government, where the tax has been introduced.



Tax object and basis of assessment

All business activities pursued temporally or permanently in the area of jurisdiction of a local government.

The tax base of permanent commercial activities shall be the net sales revenues from the supply of products and services less the original costs of goods sold, the value of intermediated services, subcontractors’ charges for services, material costs and the direct costs of basic research, applied research and experimental development claimed for the tax year. Aggregate amount of the original costs of goods sold and the value of intermediated services are limited deductible. Exempt from the limited deduction the original costs of goods sold and the value of intermediated services related to export sales and publicly funded drugs as goods accounted for net domestic sales.

For temporary commercial activities the tax shall be established on the basis of calendar days during which the activity were performed. For temporary commercial activities the tax shall be established on the basis of calendar days during which the activity were performed.

Deductions, Allowances, Credits, Exemptions

Considering the EU accession of Hungary (acquis prohibit granting state aid for entrepreneurs), the local governments have only limited right for giving tax allowances. Tax incentives and exemptions shall be provided only to an entrepreneur, whose tax base is not greater than HUF 2.5 million. The extent or amount of tax exemptions and tax incentives shall be identical for all entrepreneurs who satisfy the above-mentioned criteria.

According to the act there are only two exemptions:

1. the so called tax base exemption for creating employment opportunities. This means that tax base may be reduced based on any increase in the number of employees by one million per person.

2. exemption of Regulated Real Estate Investment Companies. According to this exemption regulation the Regulated Real Estate Investment Companies, -pre-companies, and the special purpose companies of real estate companies and pre-companies are exempt from this tax.

3. The cooperative society whose net turnover originates in at least 95 per cent from supplies provided to its members or from the sales of its members’ products shall be exempt from tax. 

According to the act there are two opportunities for the taxpayers to reduce the annual payable local business tax:

 1. The payable tax can be reduced with the amount of tax paid during the tax year on temporary activities.

 2. The payable tax can be reduced with the 7.5% of the fee charged for the use of any tolled motorway, claimed under expenses fot the tax year. 

Rate(s) Structure
  • For permanent commercial activities the maximum rate of tax is 2% of the tax base per annum.
  • For temporary commercial activities the maximum tax rate shall be HUF 5,000 per calendar day for
    • building activity,
    • for any activity, provided that the entrepreneur doesn't have commercial domicile or place of business in Hungary.
Tax due date

31st of May.

Tax collector

The tax authority of local government.

Special features

Economic function

Environmental taxes

Tax revenue
ESA95 code d214ia

Annual tax revenue (millions)
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 471,031.00 HUF 1.65
2011 457,308.00 HUF 1.62
2010 443,093.00 HUF 1.64
2009 472,155.00 HUF 1.80
2008 465,075.00 HUF 1.72
2007 427,134.00 HUF 1.67
2006 380,158.00 HUF 1.57
2005 334,077.00 HUF 1.49
2004 310,535.00 HUF 1.48
2003 271,995.00 HUF 1.43
2002 252,603.00 HUF 1.45
2001 226,460.00 HUF 1.47
2000 186,823.00 HUF 1.40