Hungary

{"ftc_utility":"medium","fbar_trigger_notes":"US expats residing in Hungary are required to maintain a local bank account for salary receipt and everyday transactions. Hungarian bank accounts denominated in HUF or EUR will trigger FBAR filing obligations if the aggregate balance exceeds $10,000 at any point during the year. FATCA reporting by Hungarian financial institutions is required under the US-Hungary IGA signed in 2014.","ftc_utility_reason":"Hungary's flat 15% PIT rate is well below the US top marginal rate of 37%, so Foreign Tax Credits will partially offset US tax liability on income above the FEIE limit. For moderate earners fully covered by the FEIE, FTC utility is lower. For higher earners or those with investment income not covered by FEIE, FTCs provide meaningful but incomplete shelter given the 15% Hungarian rate versus higher US rates.","presence_day_count_notes":"Hungary is in the Schengen Area. US citizens can stay up to 90 days in any 180-day period without a visa. To establish residency for bona fide residence test purposes, a residence permit or registration as a resident is required. The 330-day physical presence test counts days outside the US globally, so Schengen visa limits do not directly interfere if the taxpayer holds a Hungarian residence permit allowing longer stays.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":16800,"local_tax_rate_on_earned_income":0.15,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Hungarian-source pension income paid to Hungarian residents is fully exempt from personal income tax under Hungarian domestic law. This exemption covers state pension (nyugdij) payments. Foreign pensions received by Hungarian residents are generally taxable at 15% PIT unless treaty protection applies.","tax_rate":null,"locally_taxed":false},"social_security":{"notes":"Under the US-Hungary Social Security Totalization Agreement and treaty provisions, US Social Security benefits received by residents of Hungary are generally taxable only in the US. Hungary does not impose its own tax on US Social Security payments. Expats should confirm status under current treaty interpretation.","locally_taxed":false,"treaty_protection":true},"roth_distributions":{"notes":"Hungary does not recognize the Roth IRA as a tax-advantaged structure. Distributions may be treated as income or capital gains and taxed at 15% PIT. The treaty does not explicitly exempt Roth distributions. Treatment can be ambiguous and professional advice is recommended.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"The US-Hungary tax treaty (1979, still in force) addresses pension and retirement income. US-source pension distributions including 401(k) and IRA distributions received by Hungarian residents are generally taxable in Hungary at the 15% flat PIT rate. Treaty Article 17 covers pensions and may limit Hungarian taxing rights depending on sourcing rules. US expats should also factor in US taxation obligations and potential FTC use.","tax_rate":0.15,"locally_taxed":true,"treaty_protection":true}}

{"rate":0.15,"notes":"Capital gains are taxed at a flat 15% personal income tax rate. An additional 13% social contribution tax (szocho) may apply to certain capital gains such as securities gains, bringing the effective rate to 28% in those cases.","details":{"tax_type":"Capital Gains Tax","country_name":"Hungary","country_iso_code":"HUN","source_references":["PwC Worldwide Tax Summaries - Hungary","NAV (Hungarian Tax Authority) official guidance"],"last_verified_date":"2026-06-03","general_description":"Hungary does not have a separate capital gains tax. Gains from the disposal of assets are included in the personal income tax base and taxed at the flat 15% PIT rate. Securities gains and certain investment income are also subject to a 13% social contribution tax (szocho), capped at a defined annual ceiling. Gains on real property held for more than 5 years are exempt.","corporate_capital_gains":{"rate":0.09,"tax_treatment":"Taxed as ordinary corporate income at the standard 9% corporate income tax rate. Hungary applies one of the lowest CIT rates in the EU."},"individual_capital_gains":{"rate":0.15,"szocho_rate":0.13,"tax_treatment":"Flat 15% PIT applies to all capital gains. An additional 13% szocho applies to gains from securities and certain dividends. Real property gains are exempt if the property was held for more than 5 years. The szocho component is subject to an annual ceiling equal to 24 times the minimum wage.","participation_exemption":"A participation exemption from CIT applies at corporate level for qualifying shareholding disposals held for at least 1 year with at least 10% stake.","real_property_exemption":"Gains on real property are reduced by 10% per year held after year 1, becoming fully exempt after 5 years of ownership.","combined_rate_on_securities":0.28}}}

{"notes":"Dividends received by Hungarian resident individuals are subject to 15% PIT and a 13% social contribution tax (szocho), giving a combined rate of 28% in most cases. The szocho is capped annually at 24 times the statutory minimum wage. Dividends paid to non-resident individuals are subject to 15% withholding tax, which may be reduced under applicable tax treaties.","rates":[{"rate":0.15,"type":"flat","notes":"Personal income tax rate on dividends for resident individuals."},{"rate":0.13,"type":"flat","notes":"Social contribution tax (szocho) on dividends for resident individuals, subject to annual ceiling."},{"rate":0.15,"type":"withholding","notes":"Withholding tax on dividends paid to non-residents; reducible under tax treaties."},{"rate":0.05,"type":"withholding","notes":"Reduced WHT rate available under several of Hungary's bilateral tax treaties (e.g. US-Hungary treaty limits to 5% for corporate recipients holding 10%+ stake and 15% for others)."}]}