Business Expenses in Hungary 2026: What You Can Deduct and What Backfires

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You run a Kft, work as a sole trader, or plan to start a business in Hungary. This guide shows which costs cut your tax in 2026, which ones backfire, and how the choice of structure changes everything.

Hungary business expenses in 2026: the key figures

Is this guide for you?

Read on if you…

• own or plan a Hungarian Kft and want to know what it can deduct;
• are a sole trader choosing between itemised costs and the flat-rate regime;
• work from a home office, use a car or travel for work.

Probably not your case if you…

• are a salaried employee: Hungary gives employees almost no cost deductions;
• run your business through a foreign company with no Hungarian presence (but read the warning below first).

Which structure fits what you do?

How you deduct costs depends on your structure. Here is the short comparison for 2026:

Need help picking? See legal forms of business in Hungary or compare options on the Heavnn business setup page.

Here's the catch: management and control

If you run a foreign company from your flat in Budapest, Hungary may treat it as Hungarian. Decisions taken in Hungary can create a place of effective management there. Or your work there can create a permanent establishment, basically a taxable branch.

Either way, Hungarian 9% CIT applies to the profit, and NAV will disallow costs it cannot verify. Treaties decide the details: see Hungary's international tax treaties.

What can a Hungarian company deduct?

The Corporate Tax Act (Act LXXXI of 1996) starts from your accounting profit. Every cost in the books counts, unless Annex 3 says it is not in the interest of the business.

Usually deductible

• staff costs, including employer social contribution tax;
• rent, utilities and office equipment;
• software, subscriptions and professional services;
• depreciation of assets under the tax depreciation rates;
• business travel with documented purpose;
• marketing and advertising.

Not deductible

• fines, tax penalties and late payment interest;
• costs without a proper invoice;
• costs for private purposes of owners or managers;
• most donations, except to qualifying public benefit bodies;
• excess interest beyond the interest limitation rule.

The burden of proof is on you. Keep contracts, invoices and evidence of the work done.

Entertainment and gifts

Business meals and gifts are deductible for CIT. But Hungary taxes them as certain specified benefits. The company pays 15% PIT and 13% szocho on 118% of the value, about 33% on top.

Cars

A company car's costs are deductible. In exchange, the company pays a monthly company car tax based on engine power and emission class. That tax replaces the PIT on private use. Input VAT on buying a passenger car is not recoverable; on running costs, recovery is limited.

How do sole traders deduct expenses?

You choose between two methods each year.

Option 1: flat-rate (átalányadó)

You ignore real costs and deduct 40% of revenue. No receipts, no audit of costs. Income up to half the annual minimum wage, about HUF 1.94 million in 2026, is free of PIT. Revenue must stay under about HUF 38.7 million.

Honestly? For freelancers whose real costs are under 40% of revenue, this wins almost every time.

Option 2: itemised costs

You deduct real, documented costs. Typical items:

• Assets: up to HUF 200,000 expensed at once; above that, depreciation.
• Home office: the share of rent and utilities matching the space used.
• Own car: a flat per-kilometre allowance plus fuel by official norm, or real costs with a logbook.
• Phone and internet: business share, documented.

Then you pay 15% PIT on profit, plus 18.5% social security and 13% szocho. This only makes sense with high real costs.

How do you document expenses for NAV?

1. Get a valid invoice with your tax number for every cost. Hungarian invoices are reported to NAV in real time.
2. Link each cost to the business in a short note or contract.
3. Keep travel records: purpose, dates, kilometres.
4. Store records 8 years for accounting documents.
5. Fix errors by self-revision before NAV opens an audit.

Common mistakes (and what they cost)

• Booking private costs in the company → cost added back, extra 9% CIT, plus a 50% penalty and interest.
• Forgetting benefit tax on entertainment → about 33% of the value assessed later, with penalties.
• Choosing itemised costs with low real expenses → paying more than under the 40% flat-rate regime.
• Accepting invoices without your tax number → the cost and the VAT become non-deductible.
• Running a foreign company from Hungary → the profit becomes taxable in Hungary, with your foreign costs under review.

Frequently asked questions

What business expenses are deductible in Hungary?

For companies, any cost recorded in the accounts that serves the business, unless the Corporate Tax Act lists it as non-business. That covers salaries, rent, software, services, depreciation and documented travel. Fines, private costs, unsupported invoices and most donations are not deductible. Sole traders deduct either real documented costs or a flat 40% of revenue.

Is átalányadó better than itemised costs?

Usually, for service freelancers. Átalányadó deducts 40% of revenue without receipts and gives a PIT-free slice of about HUF 1.94 million in 2026. If your real costs are well above 40% of revenue, itemised deduction may win. You choose for the whole year, and you must stay under the revenue cap.

Can I deduct my home office in Hungary?

Yes, if you itemise costs or run a company that pays you rent. You deduct the share of rent, utilities and internet matching the space used only for work. Keep a floor plan and a short calculation. Under átalányadó you cannot deduct it separately because the 40% flat deduction already covers all costs.

Are business meals deductible in Hungary?

Yes for corporate tax, but they are taxed as specified benefits. The company pays 15% personal income tax and 13% social contribution tax on 118% of the value, roughly 33% on top. Keep the invoice, the names of guests and the business purpose. Purely private meals are not deductible at all.

How are company cars taxed in Hungary?

The company deducts running costs and depreciation and pays a monthly company car tax set by engine power and emission class. In return, private use by the employee or owner is not taxed as income. Input VAT on the car purchase cannot be recovered, and VAT on fuel and running costs is restricted.

Can a foreign company deduct costs in Hungary?

Only if it has a taxable presence there, such as a branch or a permanent establishment. Then its Hungarian profit is taxed at 9% after deducting the costs linked to that presence. If you manage a foreign company from Hungary, NAV may treat the whole company as Hungarian resident instead.

Related guides

• Legal forms of business in Hungary
• Corporate income taxes in Hungary
• Hungary tax landscape overview
• Specific taxes in Hungary: VAT, local and sector taxes
• Tax fraud regulations of Hungary
• Business expenses in Romania
• Business expenses in Bulgaria
• All country tax guides

Sources

• National Tax and Customs Administration of Hungary (NAV)
• National Legislation Database – Act LXXXI of 1996 on Corporate Tax and Act CXVII of 1995 on Personal Income Tax
• Hungarian Company Information Service (e-cégjegyzék)
• European Commission – Taxation and Customs Union
• PwC Worldwide Tax Summaries – Hungary (secondary cross-check)

This guide is general information, not personalised tax advice. See how we research and review.