By
October 21, 2026
What is the corporate tax rate in Hungary?
Hungary is an attractive European destination for entrepreneurs and international investors looking for a competitive corporate taxation environment.
One of the country's most notable features is its relatively low corporate income tax rate, which has attracted attention from businesses considering establishing operations within the European Union.
But what is the corporate tax rate in Hungary?
Hungary's standard corporate income tax rate is 9%, applicable to taxable corporate profits.
This rate generally applies to Hungarian companies, including limited liability companies, regardless of whether their shareholders are Hungarian residents or foreign investors.
However, the 9% corporate tax rate does not necessarily represent a company's total tax burden.
Businesses may also be subject to local business tax, value added tax, payroll-related obligations and other taxes depending on their activities.
This guide explains how Hungary's corporate tax system works, how corporate income tax is calculated, which additional taxes may apply and what foreign-owned companies should consider before establishing a business in Hungary.
Hungary applies a standard corporate income tax rate of 9%.
The tax is commonly referred to as társasági adó, or TAO.
The 9% rate has applied since 2017 and is generally calculated on the company's taxable income rather than its total revenue.
Taxable income is determined under Hungarian corporate tax legislation, which includes adjustments to the company's accounting profit.
This distinction is important because a company's accounting profit and taxable profit may not always be identical.
Certain expenses may be deductible, while other costs may require adjustments.
Tax reliefs and allowances may also apply where the relevant conditions are satisfied.
Hungarian corporate income tax is calculated by applying the 9% rate to the company's taxable profit.
For example, consider a Hungarian company with the following annual results:
In this simplified example, the company pays HUF 1,350,000 in corporate income tax.
The remaining HUF 13,650,000 represents profit after corporate income tax, before considering other applicable taxes, distributions or adjustments.
Actual corporate tax calculations may differ because taxable income is subject to statutory rules, adjustments and reliefs.
Yes. Hungary's standard 9% corporate income tax rate generally applies to companies incorporated in Hungary, including those owned by foreign shareholders.
For example, a Hungarian limited liability company owned by an entrepreneur from Germany, Malta, the United Kingdom or another country is generally subject to the same standard corporate income tax rate as a domestically owned Hungarian company.
Foreign ownership does not automatically increase the corporate income tax rate.
However, international ownership structures may create additional obligations involving transfer pricing, withholding taxes, beneficial ownership, international tax treaties and other tax rules.
Large multinational groups may also be subject to minimum taxation requirements.
Hungary's standard 9% corporate income tax rate is among the lowest headline corporate income tax rates in the European Union.
This can make Hungary attractive to businesses comparing European jurisdictions.
However, headline corporate tax rates do not provide a complete picture of a country's tax environment.
Businesses should also consider local business taxes, payroll costs, VAT, dividend taxation, administrative obligations and the taxation of shareholders.
For multinational groups, international minimum tax rules may also affect the effective tax burden.
A company should therefore evaluate its overall tax position rather than selecting a jurisdiction solely because of its headline corporate income tax rate.
Yes. In addition to corporate income tax, Hungarian municipalities may impose a local business tax, commonly known as HIPA.
The local business tax rate can be up to 2%, depending on the municipality.
Importantly, local business tax is not calculated in exactly the same way as corporate income tax.
Its tax base is generally linked to net sales revenue after specified statutory deductions, subject to the applicable rules.
Consequently, it would be incorrect to assume that Hungary's corporate income tax rate of 9% and its maximum local business tax rate of 2% always produce a combined tax rate of 11% on profits.
The two taxes use different calculation methods.
Companies should assess both taxes separately when estimating their total liabilities.
Hungary's standard value added tax rate is 27%.
This is separate from corporate income tax.
VAT generally applies to taxable supplies of goods and services, subject to the relevant rules.
Reduced VAT rates of 18% and 5% apply to certain qualifying goods and services.
Some transactions may also be exempt or subject to special VAT treatment.
Companies carrying out cross-border transactions within the European Union may need to consider additional VAT obligations, including reverse charge rules and intra-community reporting.
VAT registration requirements depend on the company's activities, turnover and the applicable legislation.
Many small businesses operating through Hungarian companies are subject to the standard 9% corporate income tax system.
However, Hungary also offers alternative taxation arrangements for certain eligible businesses.
One important example is the small business tax regime known as KIVA.
Eligible companies may elect to apply KIVA instead of the standard corporate income tax framework.
The KIVA regime has a different tax base and may be suitable for certain businesses depending on their payroll, retained profits and other circumstances.
Businesses should compare the available taxation systems before choosing the most appropriate arrangement.
KIVA is an alternative tax regime available to qualifying Hungarian businesses.
The KIVA tax rate is 10%, but it should not be directly compared with the standard 9% corporate income tax rate without considering the different tax bases.
KIVA generally replaces corporate income tax and the employer's social contribution tax for eligible taxpayers.
Its tax base is determined under special rules that take into account relevant personnel payments and capital or dividend-related movements, subject to statutory adjustments.
Because KIVA operates differently from ordinary corporate income tax, the most suitable regime depends on the company's financial structure.
A company with significant payroll expenses may reach a different conclusion from a business with limited employees and substantial profits.
Eligibility requirements and financial thresholds should be checked before making an election.
Hungary has rules designed to address situations where a company's declared taxable profit is unusually low relative to its revenue.
These include provisions concerning a minimum income or profit benchmark.
Depending on the circumstances, a company may need to consider a statutory minimum tax base mechanism or make the relevant declarations.
The rules do not mean that every company must pay corporate income tax on a fixed percentage of revenue.
Their application depends on the company's circumstances and the statutory conditions.
Yes. Hungary has implemented rules reflecting the international minimum taxation framework for large multinational and domestic groups.
These rules are generally relevant to groups meeting the consolidated annual revenue threshold of €750 million, subject to the applicable tests and exceptions.
The framework seeks to ensure a minimum effective tax rate of 15% for covered groups.
This does not mean that Hungary's standard corporate income tax rate has increased from 9% to 15% for ordinary businesses.
The standard 9% rate remains applicable under the regular corporate tax system.
However, qualifying large groups may face additional top-up tax obligations.
Smaller businesses that do not fall within the scope of these rules are generally unaffected by the global minimum tax regime.
Hungarian companies may generally deduct qualifying business expenses when determining their taxable income.
Typical business expenses may include:
However, deductibility depends on Hungarian tax legislation.
Certain expenses may be restricted, disallowed or subject to special treatment.
Businesses should maintain accurate accounting records and appropriate supporting documentation.
Dividend taxation depends on the recipient and the applicable legal circumstances.
A Hungarian company distributing profits to an individual shareholder may have obligations relating to personal income tax and potentially social contribution tax, subject to applicable rules and limits.
Dividends paid to corporate shareholders may receive different treatment.
Hungary generally does not impose domestic withholding tax on dividends paid to non-resident corporate shareholders, although specific circumstances and international rules should be reviewed.
Foreign individual shareholders may also be subject to taxation in their country of residence.
The applicable double taxation agreement may affect the overall tax treatment.
Therefore, a company's 9% corporate income tax rate should not be confused with the total taxation of profits eventually distributed to shareholders.
A Hungarian company may conduct international business and remain subject to Hungarian corporate income tax.
However, establishing a company in Hungary does not automatically mean that all its profits will be taxable exclusively in Hungary.
International tax treatment depends on several factors, including the location of effective management, employees, offices and commercial activities.
If a Hungarian company maintains a permanent establishment in another country, that country may have taxing rights over the profits attributable to the establishment.
Similarly, managing a Hungarian company from abroad may create tax residency questions under the laws of another jurisdiction.
International entrepreneurs should consider these issues before establishing a company intended to operate primarily outside Hungary.
Hungary offers several potential advantages for businesses.
The standard 9% corporate income tax rate can be attractive for profitable companies.
Hungary also offers access to the European Union market, a recognised corporate framework and the possibility of foreign ownership.
Certain businesses may benefit from investment incentives, development-related tax allowances or alternative tax arrangements, subject to eligibility requirements.
However, the overall advantages depend on the company's activities, ownership structure, employment arrangements and international operations.
Tax planning should consider the complete legal and financial position rather than the corporate income tax rate alone.
Hungarian companies must comply with corporate tax filing and payment requirements.
For businesses using the calendar year as their financial year, the annual corporate income tax return is generally due by 31 May of the following year.
Different deadlines may apply to companies using another financial year.
Companies may also be required to make corporate income tax advance payments during the year.
The amount and frequency of advance payments depend on the applicable rules and the company's circumstances.
Accurate bookkeeping and financial reporting are essential for calculating the correct tax liability.
Hungary's standard corporate income tax rate is 9%.
Yes. The standard corporate income tax rate is 9%, although other taxes and special rules may affect the company's overall tax burden.
Generally, yes. Foreign-owned Hungarian companies are normally subject to the same standard corporate income tax rate.
Yes. Municipalities may impose local business tax at rates of up to 2%, calculated on a tax base different from ordinary corporate taxable profits.
Hungary's standard VAT rate is 27%, with reduced rates and exemptions available for certain transactions.
The standard corporate income tax rate is 9%. Separate 15% minimum effective taxation rules may apply to certain large multinational and domestic groups.
A Hungarian Kft. is generally subject to the standard 9% corporate income tax rate unless it qualifies for and elects an applicable alternative regime.
Hungary may be suitable for foreign-owned companies depending on their business model, international activities, tax circumstances and regulatory requirements.
Dividend taxation depends on whether the shareholder is an individual or company, their tax residence and the applicable legal rules.
Yes. Qualifying business expenses may generally be deducted, subject to Hungarian corporate tax legislation.
The KIVA small business tax rate is 10%, calculated under a different tax base from ordinary corporate income tax.
Standard corporate income tax is generally calculated on taxable profit rather than total revenue. Other taxes, including local business tax, may use different tax bases.
Hungary offers a standard corporate income tax rate of 9%, making it one of the European Union's lower-tax jurisdictions in terms of headline corporate income taxation.
The rate generally applies to Hungarian companies regardless of whether they are owned by domestic or foreign shareholders.
However, businesses should also consider local business tax, VAT, employment-related obligations and shareholder taxation.
Certain eligible companies may benefit from alternative tax arrangements, while large multinational groups may be subject to international minimum tax rules.
For entrepreneurs considering establishing a company in Hungary, the 9% corporate income tax rate is an important advantage, but the overall tax position should be assessed before making an incorporation decision.
Disclaimer: This article provides general information as of October 2026 and does not constitute tax, legal or financial advice. Tax legislation, rates, thresholds and eligibility conditions may change. Businesses should obtain advice from a qualified Hungarian tax professional before making tax or investment decisions.
