If an individual resides
in Hungary for more than 183 days in any calendar
year, they are deemed to be resident for tax purposes.
Other factors that determine official tax residence
can include ownership of a property in Hungary (although
tax residence is also assumed if no property is
owned, but the person’s ‘centre of vital
interests’ is deemed to be in Hungary).
Residents of Hungary
pay income tax on income derived from within Hungary
and worldwide. Non-residents pay tax only on income
derived from within Hungary.
EU/EEA citizens may enter
Hungary freely to live and work. Normally no Work
Permit is required. After a period of 90 days, a
Registration Card is required. Non-EU/EEA citizens
will usually require a visa to enter the country
and must obtain a Residence Permit if they wish
to remain in the country.
Cost
of Residence Document (approx)
Work
Permit Required
Work
Permit Authority
A fee of EUR60 is usually charged
for processing an application for a Residence Permit
(non-EU/EEA citizens only).
EU/EEA citizens do not require a
Work Permit to work in Hungary. Non-EU/EEA citizens
do require a Work Permit and a Work Visa. The permit
can take up to 25 days to be issued. Once a Work
Permit has been issued, the Work Visa should be
applied for at the Hungarian Consulate in the country
of origin.
The local Labour Office.
Personal
Income Tax
Corporate
Income Tax
Social
Taxes
There are two main rates of personal
income tax – 17% on income up to HUF5m, and
32%, plus HUF850,000. (Prior to January 2010, the
rates were 18% on the first HUF1.9m, and 36% (plus
HUF342,000) on income above that). A 4% solidarity
tax is incorporated into the higher rate on earnings
over the social security earnings threshold, resulting
in an effective 36% higher income tax rate.
Prior to January 2010, corporate
income tax was imposed at 16%, plus a 4% ‘solidarity’
tax. The 4% surcharge was removed as of January,
but the corporate income tax rate has been increased
from 16% to 19%. Smaller businesses or self-employed
can pay 16% (and sometimes 10% on income up to
HUF50m subject to certain conditions). A simplified
business tax (EVA) has also traditionally been
available for SMEs, encompassing all taxes in
one form.
Local business taxes are usually levied by municipal
authorities, at a rate of up to 2% of gross income.
Prior to January 2010, employers
paid 33.5% of each employee’s gross wage in
Social Security contributions – 24% towards
pensions and 5% towards health insurance. Employees
paid 17% of gross wages. Post-January 2010, employers
now pay 28.5%.
Capital
Gains Tax
Property
or Wealth Tax
Stamp
Duty
Individuals pay 20% on capital gains
(25% prior to January 2010). Sale of a property
that is a person’s main residence is exempt,
as are gains from certain types of investment. The
sale of shares within the EU economic zone is subject
to different rules. Capital gains made by companies
are generally taxed at the standard Corporate Tax
rate.
From January 2010, a progressive
Wealth Tax is imposed on real estate, boats, aircraft,
and high-powered cars. With regard to real estate
the rates range between 0.25% (on property worth
HUF30m or less) to 0.50% plus HUF145,000 for property
valued at more than HUF50m.
Stamp Duty is payable on the purchase
of property, at variable rates.
Other
Taxes
The standard rate of VAT is 25% and
is high by comparison with other EU countries. There
are reduced rates of 18%, 12%, 7% and 5%, and some
exemptions. Withholding taxes can be imposed on
dividend payments at either 10% or 25%, and at 30%
on certain interest, royalty and service fee payments.
I am facing a dilemma and would like to invite any reader to advise me.
I am a Brit who has lived outside UK since 1993- initially in Belgium (5 years) & subsequently in 4 African countries. After a year outside UK, the UK Inland Revenue confirmed my status as ‘non-resident’ for tax purposes and as I have had no income in UK, I have not completed a UK tax return for many years. I visit UK very rarely, normally for one or two weeks per year.
In May 2011, I was made redundent by my employers, who were downsizing. This coincided with a move to retire in the Netherlands, where I now have official residency (my wife is Dutch). I thought that, at 63 years of age, I would be unlikely to find suitable employment; in fact, I have not tried hard and had resigned myself to permanent (but slightly premature) retirement.
However, to my surprise, I have recently been approached (through a mutual acquaintance) by a company that wishes to use my skills on a project in the Isle of Man. The role, if & when confirmed, would see me working for about 10 days a month in Isle of Man, with about 5-7 additional days per month, working from home. Contract will be for about two years. The firm has asked me to confirm if I would prefer to be paid (and therefore be taxed) in Netherlands or Isle of Man, the idea being that I create a self-employment entity for this employment. I have no data on which to base a response. Given Isle of Man's traditional ‘low tax ‘environment, are there any benefits to declaring an income in IOM? Are there any Isle of Man residency implications? Netherlands takes a tax cut on total world wide income, and, as I have never had any contact with the Dutch authorities, I am reluctant to start such a relationship now. Do I have to declare income in both countries, with a breakdown prorata to the time spent in each jurisdiction? Should I declare income to UK Inland revenue?
If anyone has pertinent advice on these points, I’d be grateful to hear them.
Just wondering if anyone 'on the ground', as it were, might be reading and able to help me...I was considering relocating my hairdressing business from the UK to Ireland before the economy started to go properly belly-up...now, not so much.
Are things as bad as they seem over there, or is it being over-hyped by the media? And is the government still keen to support small business people? Cos if not, I'll look elsewhere...
Hi, I live in South Africa, and along with 2 business partners (one in South Africa and one in Ireland - all South African citizens though) are setting up a company that designs Smart phone applications. As they will be sold on the various platforms (none of which operate out of South Africa)we have to list our company as operating out of Ireland anyway. As such, we have decided to set up our company in the best tax country and are wanting info on whether Jersey or Malta is best? If anyone has some inside info we would really appreciate it!! Thanks!Mary
I am moving full time to France in Jan 2012 where I will be working as a freelance contract engineer to a number of Australian based companies. It is my choice to move to France not a work requirement. I will be renting my house out in Austrlalia and renting a house while I am in France. I hold both EU & Austrlain citizenshiip. I am married with 2 young children. Approx total family income $100k AUD. Do I pay tax in France or Australia or both ? Any help or guidance would be much appreciated.France move
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