Tax Incentives for Expatriates and Digital Nomads in Hungary
Hungary recognizes the growing trend of remote work and the influx of expatriates and digital nomads. To attract and retain skilled professionals, the country offers a range of tax incentives tailored to these individuals.
Eligibility Criteria
To qualify for expat tax breaks, individuals must meet the following criteria:
- Expatriates: Non-Hungarian citizens who have resided in Hungary for at least 183 days in a calendar year.
- Digital Nomads: Individuals who work remotely for non-Hungarian companies while residing in Hungary.
Types of Tax Breaks
Expatriates and digital nomads can benefit from the following tax breaks:
- Personal Income Tax Exemption: Expatriates can exempt up to 15% of their gross income from personal income tax. This exemption applies to income earned from employment, business activities, and investments.
- Social Security Contribution Exemption: Expatriates and digital nomads are exempt from paying social security contributions on their foreign-sourced income.
- Corporate Tax Exemption: Digital nomads who establish a company in Hungary can benefit from a 9% corporate tax rate on their business income.
Application Process
To claim these tax breaks, expatriates and digital nomads must:
- Register with the Hungarian Tax Authority: Submit an application form and supporting documents, such as a residence permit or employment contract.
- File a Tax Return: Declare all income earned in Hungary and claim the applicable tax exemptions.
Legal References
The tax incentives for expatriates and digital nomads are outlined in the following legal documents:
- Act on Personal Income Tax (1995)
- Act on Corporate Income Tax (1996)
- Government Decree on Social Security Contributions (2010)
Rationale and Objectives
Hungary's tax incentives for expatriates and digital nomads aim to:
- Attract and retain skilled professionals and remote workers.
- Promote economic growth and innovation.
- Support the development of a vibrant and diverse workforce.
If navigating Hungary's tax regulations seems daunting, consider partnering with Heavnn. Our team of experts can guide you through the application process and ensure you maximize your tax savings.
