tag: withholding tax

One of the less visible yet potentially serious pitfalls of Hungarian tax law is the concept of the “payor” (kifizető). Many foreign companies assume that, if they have no permanent establishment or branch in Hungary, they are outside the scope of the Hungarian tax authorities. The reality is more nuanced. Moreover, a Hungarian individual employed by a foreign payor may also find themselves in an uncomfortable position as a result.

Hungary is an ideal location for international tax planning. Below we summarize the 5 most important features of the Hungarian tax system that can make the country attractive for international investors and public and private multinational groups.

While Hungary has long been a preferred place in international tax planning, with a flat 9% corporate tax rate recently introduced, the country has arrived to the forefront of the competition. Adding also the absence of withholding taxes, the participation exemption both on portfolio holdings and intellectual properties, coupled with all benefits of an EU–compliant tax legislation, Hungary is destined to become a popular place for tax experts.