I'm not a Hungarian resident... Why should I pay tax in Hungary?
According to the Hungarian tax laws you are liable to pay tax on the earnings made within within the borders of Hungary regardless of your residence. So rental income is no exception if the property is located in Hungary even if the owner lives aboard.
Okay, but how much is it?
Personal income tax is 16% (no different tax bands), corporation tax is 10% under annual tax base of 500 million HUF (ca. 1.6 million EUR). In certain downtown districts there may be building tax, however, this is not general.
What are my deadlines?
Tax year in Hungary ends by the 31st December, tax return should be submitted by the 20th May the subsequent year.
Will you tell me some good news?
Good news is that Hungary has signed agreements with most of EU countries to avoid double taxation. Because of double taxation agreements may differ country by country it is advised to check the tax regulations on the local side as well to get the comprehensive picture.
Alright, now what's the bad news?
Just like in any other EU country, failing to make a tax payment may result in dire consequences. We have seen cases where unpaid tax generated thousands of euros in penalty interests, eventually charged and collected by the local tax office in Ireland. Usual practice by the Hungarian Tax Office is either liquidate the company owning the property or putting a lean on the title deed.
