Hungary has some of the lowest and simplest taxes in the European Union: a flat personal income tax and the EU’s lowest corporate rate. The trade-off is VAT, which is the EU’s highest. Here are the main rates for 2026.
| Tax | Rate (2026) |
|---|---|
| Personal income tax | 15% (flat) |
| Corporate income tax | 9% (lowest in the EU) |
| VAT, standard rate | 27% (highest in the EU) |
| VAT, reduced rates | 18% and 5% |
| Employee social contribution | 18.5% |
| Employer social contribution (szocho) | 13% |
Personal income tax
Hungary charges a flat 15% personal income tax on all income, the same rate whether you earn a little or a lot, and the lowest flat rate in the EU. Tax residents are taxed on their worldwide income, while non-residents are taxed only on their Hungarian income. Whether you count as a tax resident usually comes down to spending 183 days or more in Hungary in a year, or having your main centre of life here. We cover this in more detail in the White Card tax section.
Value added tax (VAT)
The standard VAT rate is 27%, the highest in the EU, and it is built into the price of most goods and services. Two reduced rates apply: 18% on items such as certain foods and hotel stays, and 5% on essentials like basic foods, books, medicines, and newly built homes.
Corporate income tax
Companies pay a flat 9% corporate income tax, the lowest in the EU. That, combined with straightforward company formation, is a big reason businesses base themselves in Hungary. If you are thinking of setting up a company, see our business start-up route.
Social contributions
On top of income tax, employees pay an 18.5% social security contribution, deducted from gross salary, which funds pension and healthcare. Employers pay a separate 13% social contribution tax (szocho) on top of wages. So while headline income tax is low, total deductions from a salary are higher once social contributions are counted in.
Small-business tax options
Hungary also has simplified flat-tax regimes for sole traders and very small businesses. The two main ones are KATA, a fixed monthly tax for small taxpayers, and flat-rate taxation (átalányadózás), which taxes a set percentage of your income. For the right business, both are far simpler and cheaper than standard accounting.
Get your tax position confirmed
Tax residency and cross-border income can get complicated, especially in your first year in Hungary. If you would like to speak to a tax lawyer about your situation, get in touch and we can help.
Frequently asked questions
What is the income tax rate in Hungary?
A flat 15% on all personal income, the lowest flat rate in the EU. Tax residents are taxed on worldwide income, while non-residents are taxed only on their Hungarian income.
What is the VAT rate in Hungary?
The standard VAT rate is 27%, the highest in the EU. Reduced rates of 18% and 5% apply to certain goods such as some foods, books, and medicines.
What is Hungary’s corporate tax rate?
A flat 9%, the lowest corporate income tax rate in the European Union, which makes Hungary popular for company formation.
Does Hungary have low taxes?
Income and corporate taxes are among the lowest in the EU, but VAT is the highest and social contributions add to the cost of employment, so the overall picture is mixed.