Corporate income tax in Hungary: A business-friendly overview for compliance

The corporate income tax in Hungary is regulated by Act LXXXI of 1996 (hereinafter: the Act), setting out the framework for businesses. While Hungary offers one of the lowest corporate tax rates in the European Union, standing at just 9%, compliance with local tax laws requires a clear understanding of statutory adjustments, reporting obligations and tax base calculations.

Unlike many other EU member states, Hungarian tax law does not impose progressive corporate tax rates – instead, it applies a flat rate across all businesses, making it an attractive destination for companies looking to optimize their tax burden. However, the local tax system comes with its own unique regulations that businesses need to be aware of, including group taxation options, loss carry-forwards and minimum profit thresholds.

For companies operating in Hungary, ensuring compliance with corporate income tax laws is crucial to avoiding penalties, audits, and financial risks. In this guide, we break down the essential rules and obligations surrounding corporate income tax in Hungary, helping businesses navigate tax compliance efficiently.

Subject of the corporate income tax in Hungary

Subjects of corporate tax are, on the one hand, domestic resident enterprises, cooperatives, foundations and associations that carry out economic activities in Hungary. 

Two or more related taxpayers may form a corporate tax group, provided that they meet the conditions laid down by law. A taxpayer may be a member of only one group corporate tax entity at a time. 

On the other hand, non-resident taxpayers are subject to the tax to a limited extent: 

• a foreign entrepreneur who carries out economic activities at a permanent establishment in Hungary 
• a foreign member of a Hungarian company owning real estate, which disposes of or withdraws its existing shareholding and thus derives income. 

 They are not subject to the tax, among other things: 

• private individuals 
• sole proprietor 
• condominium 
• budgetary body 

Tax base of companies

The taxable amount is the profit before tax (income reduced with expenses) shown in the annual Financial Statement, after taking into account the statutory adjustments. 

Tax is payable on the positive tax base. 

Adjustments (items which increase or decrease the tax base, the list is not exhaustive): 

• losses carried forward from previous years 
• depreciation write-offs 
• provisioning and reversal of provisions 
• dividends and shares received (receivable) 
• development reserve 
• contributions for disadvantaged employees 
• research and experimental development 
• prices applied between related parties 
• donation 
• investment allowance for small and medium-sized enterprises 

The tax rate is 9% of the pre-tax profit, adjusted for the above-mentioned items. 

Minimum profit in Hungary

At the end of each tax year, taxpayers must check whether the higher of their pre-tax income or their tax base adjusted for the above items is equal to the income (profit) minimum, which is 2% of total income. 

If it does, it will determine its tax liability on its tax base determined according to the general rules, or it will have a negative tax base carry forward its losses. If, however, the higher of the above amounts is less than the minimum amount of income (profit), it may, at its option: 

• state in your tax return that you do not apply the minimum income (profit) threshold as the taxable amount and enclose with your tax return the form provided by the NAV to supplement your tax return, which is considered a return for legal consequences purposes, or 
• treat the income (profit) minimum as the taxable amount. 

Accrual of losses 

If the tax base is negative, the taxpayer may carry forward the negative tax base of the current year, which may reduce the positive tax base of subsequent years by up to 50%. 

The order in which the losses are recognised is fixed, with the previously incurred losses being recognised earlier. You can reduce your pre-tax profit by the loss carry-forward for the 5 tax years following the tax loss. 

Tax return in Hungary

The deadline for filing the annual tax return is the last day of the fifth month following the end of the financial year (31 May of the following year in the case of a general financial year). The tax return must also specify the advance tax payment due for the following 12 months. 

Payment of corporate income tax in Hungary

The advance tax is payable monthly or quarterly. The advance payment of tax is due 

• in equal monthly instalments if the tax due for the previous tax year exceeds HUF 5 million  
• quarterly, in equal instalments, if the tax due for the previous tax year is HUF 5 million or less. 

The amount of the tax advance payable is calculated on the basis of the tax actually payable in the last two years. 

The amount of tax declared in the annual return is higher than the amount of advances paid for the relevant tax year, the deadline for payment of the difference being the same as the deadline for filing the annual return. 

For a detailed overview of other taxes, rules, compliance obligations and key adjustments in Hungary, head over to our dedicated tax guideline for Hungary.

Tax compliance in Hungary – without the headache

With Accace as your partner, taxes become effortless. Our team of Hungarian tax experts ensures your business stays compliant while optimizing your tax position. From advisory and compliance to full representation before tax authorities, we handle everything. With our deep knowledge of local tax laws and a proactive approach, we help you avoid risks, maximize savings and stay ahead of regulatory changes. Focus on growing your business while we take care of the rest. Discover our full portfolio of tax advisory and tax compliance services in Hungary, or get in touch with us today.

Beáta Simon

Lead Accountant | Accace Hungary

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