Hungarian corporate income tax in 2026: what your company really pays

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

You are setting up a Hungarian Kft, already run one, or manage a foreign company while living in Hungary. This guide explains how company profit is taxed in 2026. You will also see when KIVA beats the standard regime and what it costs to take money out.

Hungary corporate income tax in 2026: the key figures

What changed for 2026

• Monthly advances only above HUF 20 million. Companies whose prior-year tax exceeded HUF 20 million pay monthly; others pay quarterly. This first applies to advances based on 2025 tax, per NAV Booklet 41.
• Higher szocho cap on dividends. The minimum wage rose to HUF 322,800, so the cap is HUF 7,747,200.
• Energy suppliers' income tax falls to 31% from 1 January 2026 (PwC, secondary). The 9% general rate is unchanged.

Is this guide for you?

Read on if you…

• plan a Hungarian Kft and want the true after-tax cost of paying yourself;
• run a small company and wonder whether KIVA would be cheaper;
• live in Hungary and manage a company registered elsewhere.

Probably not your case if you…

• freelance as a sole trader with modest profit: read legal forms of business in Hungary first;
• only invest as a private person: read capital gains tax in Hungary instead.

How is a Hungarian company's profit taxed?

The CIT Act taxes companies resident in Hungary on worldwide profit. The rate has been 9% since tax year 2017, confirms NAV's business associations summary.

From accounting profit to tax base

You start from the pre-tax profit in the annual report. Then you adjust it:

• add back fines, tax penalties and late payment interest;
• swap depreciation: remove book depreciation and deduct tax depreciation under Annexes 1 and 2;
• deduct dividends received, which are tax-free in most cases;
• deduct gains on registered participations, held at least one year and reported to NAV within 75 days of acquisition (PwC, secondary);
• deduct 50% of qualifying royalty profit (PwC, secondary);
• deduct the development reserve (fejlesztési tartalék), profit set aside for investment, capped at the year's pre-tax profit.

Here's the catch on the reserve. You must spend it on investment within four tax years. If you do not, you pay the tax plus a late payment surcharge.

The 2% minimum income test

If your base is low compared with revenue, a safety net kicks in. The income minimum is 2% of total adjusted income. When your base falls below it, you either tax the minimum or file a supplementary declaration explaining why.

Interest and related parties

Net borrowing costs are deductible up to the higher of 30% of tax EBITDA or HUF 939,810,000 (PwC, secondary). Prices between related companies must be at arm's length, or the base is adjusted.

How do losses work?

Tax losses carry forward for five tax years. Each year, carried-forward losses can cut at most 50% of the base calculated without them.

NAV adds that the carry-forward is "subject to certain conditions", which can bite after a sale, merger or demerger. Model the effect with your adviser before you sell or merge a loss-making company.

When is KIVA better than the 9% CIT?

KIVA is an optional small business tax. Under section 21 of Act CXLVII of 2012, it is 10% of its own tax base. A KIVA company is exempt from both CIT and szocho.

Who can opt in? The government's KIVA page sets the entry limits at 100 staff and HUF 6 billion of revenue and balance sheet total. You can stay until you reach 200 staff or HUF 12 billion of revenue. Other conditions apply too, such as a calendar financial year and no controlled foreign company.

The KIVA base is not your accounting profit; the KIVA Act defines its own base. Because KIVA also replaces the 13% szocho, payroll weighs heavily in the comparison. Do not guess: the government publishes a 2026 calculator comparing KIVA with CIT.

What does it cost to take money out?

Profit after CIT reaches you in two main ways.

Dividends

A resident individual pays 15% PIT on dividends. The 13% szocho (social contribution tax) also applies, until your yearly income reaches 24 times the minimum wage. In 2026 that cap is HUF 7,747,200, per NAV Booklet 12. Other income subject to szocho uses up the cap first.

Dividends paid to companies carry no Hungarian withholding tax, whether they are resident or not. For foreign individuals, a treaty may cut the 15% PIT. Hungary applies treaties with 83 jurisdictions, see Hungary's international tax treaties.

Salary

Salary is a deductible cost for the company. But it carries 13% employer szocho, 15% PIT and 18.5% employee social security. Many owners combine a salary, which builds social security cover, with dividends.

Can a foreign company owe Hungarian corporate tax?

Yes, and this is where nomads get caught. Under section 2(3) of the CIT Act, a foreign entity is resident if its place of management is in Hungary. That means the place where management is set up to run the company.

If that is your Budapest flat, the whole company can become taxable at 9% in Hungary. Even without that, a fixed place of business in Hungary makes the foreign company taxable on its Hungarian profit. A treaty tie-breaker may settle dual residence.

Deductible costs follow the normal rules in business expenses in Hungary.

How and when do you file and pay?

1. Register the company and get its tax number from NAV.
2. Pay advances: monthly by the 20th if prior-year tax exceeded HUF 20 million; otherwise quarterly. The fourth-quarter advance is due by 20 December.
3. File the annual return on form 29 by the last day of the fifth month after year-end: 31 May for calendar years.
4. Declare next year's advances in the same return.
5. File local business tax through NAV, which forwards the return electronically to your municipality (PwC, secondary).

Good news: the old December CIT top-up (feltöltés) no longer exists. It was abolished from tax years starting in 2019 (PwC, secondary).

Large groups: the global minimum tax

Hungary applies Pillar Two. A domestic top-up tax (QDMTT) and the income inclusion rule run from 2024; the undertaxed payments rule from 2025 (PwC, secondary). These rules target large multinational groups, not a typical founder's Kft.

Common mistakes (and what they cost)

• Ignoring szocho on dividends → up to HUF 1,007,136 extra in 2026 on payouts you priced at 15%.
• Running a foreign company from Budapest → 9% Hungarian CIT on the whole profit if management sits in Hungary.
• Leaving the development reserve unused → the tax comes back after four years, with a late payment surcharge.
• Missing the 75-day participation registration → a taxable gain on a sale that could have been exempt.
• Choosing KIVA without modelling it → paying more on a high-dividend, low-payroll company.

Frequently asked questions

What is the corporate tax rate in Hungary in 2026?

The corporate income tax rate is a flat 9% of the positive tax base, unchanged since 2017. Most companies also pay local business tax of up to 2%, set by the municipality. Large multinational groups may also owe a top-up under the global minimum tax.

How are dividends from a Hungarian company taxed?

Resident individuals pay 15% personal income tax on dividends. They also pay 13% social contribution tax until their yearly income reaches HUF 7,747,200 in 2026. Dividends paid to companies, resident or foreign, carry no Hungarian withholding tax. Foreign individuals pay 15%, which a treaty may reduce.

What is KIVA in Hungary?

KIVA is the small business tax, an optional regime under Act CXLVII of 2012. It charges 10% on its own tax base, defined in the KIVA Act. In return the company is exempt from corporate income tax and social contribution tax. Entry limits are 100 staff and HUF 6 billion of revenue and balance sheet total.

Can a foreigner own and run a Hungarian Kft?

Yes. Foreign owners and managing directors are common. Watch where decisions are made, though. If management sits in another country, that country may claim the company as resident. If you run a foreign company from Hungary, the reverse happens and Hungary taxes it.

How long can losses be carried forward in Hungary?

Five tax years. Each year, carried-forward losses can reduce the tax base by at most 50% of the base calculated without them. Further statutory conditions apply, so check them before a sale or merger. Plan the use of losses early, because unused amounts expire after the five years.

When is the Hungarian corporate tax return due?

By the last day of the fifth month after year-end, so 31 May for calendar-year companies. The return, form 29, also declares next year's advances. Advances are paid quarterly, or monthly by the 20th when prior-year tax exceeded HUF 20 million.

Related guides

• Legal forms of business in Hungary
• Business expenses in Hungary
• Hungary tax landscape overview
• International tax treaties of Hungary
• Corporate income taxes in Austria
• Corporate income taxes in Malta
• All country tax guides

Sources

• A short summary on the taxation of business associations – NAV
• Booklet 41: Key rules of the taxation of business associations – NAV
• Booklet 12: Contribution and social contribution tax – NAV
• Act CXLVII of 2012 (KIVA) – National Legislation Database
• Act LXXXI of 1996 on Corporate Tax – National Legislation Database
• KIVA – Hungarian Government
• Hungary: Corporate – Taxes on corporate income – PwC Worldwide Tax Summaries (secondary)
• Hungary: Corporate – Tax administration – PwC Worldwide Tax Summaries (secondary)

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