Tax professional’s guide to relocating to Budapest

Historical background

Budapest is the ancient capital of Hungary set on the banks of the mighty Danube. First settled by the Celts before 1 AD. Legend has it that the name Budapest is derived from Bleda, brother of Attila the Hun. King Béla IV of Hungary constructed the ancient city walls to protect against Tatar invasion, erecting his castle in the surrounding hills and naming it his capital in 1361.

A UNESCO Heritage Site, the modern metropolis is cited as one of the most beautiful cities in Europe – Forbes ranked it Europe’s 7th most idyllic city - attracting over 4 million visitors per year. The 10th largest city in the EU, Budapest’s population is around 1.8 million people, with the metropolitan area home to over 3 million.

Transitioning to a market economy in the 1990’s Hungary is a high-income mixed economy, the 57th largest in the world with Budapest as its financial and business capital. Classed as an Alpha (-) world city, it is the 2nd fastest-developing urban economy in Europe. The country maintains its own currency the Hungarian Forit (HUF). However, despite the ruling Fidesz-party’s Euroscepticism, Hungary’s long-term goal is to adopt the Euro.

Large Employers

Budapest is home to a wide range of large employers – the city is a major centre for banking, finance and real estate. For example the following corporates all have tax departments in the city: Nokia, Diageo, Vodafone, Viacom, EATON, DHL. Mylan, Johnson & Johnson, GE Power and RB. Also all of the Big 4 firms are represented, meaning Budapest has numerous employment opportunities for tax professionals.

Tax Rates

Hungary has a flat rate of 15% on personal income. The following contributions also apply generally:

Health care contribution for in kind fund: 4%

Health care contribution for financial allowance fund: 3%

Pension fund: 10%

Vocational training fund: 1.5%

In 2019, specific incomes become subject to Social Contributions Tax (SZOCHO) at 19.5%, payable until income reaches 24 times the minimum wage in a given tax year.

Dividends or capital gains and employee benefits in kind are subject to 19.5 % contribution, too.

VAT is generally 27% in line with the EU’s VAT directive. However, there are two reduced VAT rates in use: 5% and 18%. VAT returns are required to be submitted monthly, quarterly or yearly. Deadline for filing the return is the 20th day of the month following the given period. The yearly VAT return must be submitted by February 25th.

Source: https://accace.com/tax-guideline-for-hungary/

Transport

Getting around is easy and walking is probably the best option. However, there is a clean and efficient transport system in operation, connecting to surrounding areas. 

Subway (Metro) – Budapest has three subway lines and the fourth one, Metro 4, is currently under construction.

M1 or Millennium Underground (yellow line) - runs under Andrássy Avenue in Pest, between Vörösmarty tér and Mexikói út

M2 (red line) - runs east west, between Déli pályaudvar and Örs vezér tere

M3 (blue line) - runs north south in Pest, between Újpest-Központ and Kőbánya-Kispest

M4 - runs between Kelenföldi pályaudvar and Keleti pályaudvar

The main junction where these lines meet is at Deák Ferenc tér in the city center.

Most Budapestians travel by bus, with over 200 routes. Express buses with red number signs serve the busiest routes in the city. Budapest is also served by urban train services and has many river boats and a ferry service across the Danube.

Healthcare

Hungarian social healthcare is funded by the Health Insurance Fund (HIF). Non-Hungarians who are uninsured are only entitled to free essential services in case of an emergency or acute conditions.

Although non-Hungarians who contribute HIF (through wage deductions etc) may receive public hospital treatment at a very low charge, expats normally favour private hospitals.

Sporting venues

Budapest is home to numerous football teams. The Groupama Arena, with a capacity of 22000, is Hungary’s biggest sports facility, hosting the National team and the historic Ferencváros club. For football tourists, the Tomb of the legendary Ferenc Puskas is found in the city. Puskas was part of the famous “Mighty Magyars team of the 1950’s.

The 12500 capacity Papp László Budapest Sports Arena is the biggest indoor facility in Hungary. A multifunctional complex, it is home to diverse sport events and concerts. 

Accomodation

Budapest ranks 227th for cost of living out of 378 global cities and a cost of living index of 45.59.

Average monthly rental price (HUF) for a 1 bedroom city centre apartment is 150,212.85 Ft and a 3 bedroom is 275,960.74. Outside the city is cheaper, with a 1 bedroom averaging at 112,660.81 and 190,960.75 for a 3 bedroom.

Schooling

Education in Hungary is predominantly public, run by the Ministry of Human resources. More information can be found here: https://www.ofi.hu/national-institute-of and here: http://www.oecd.org/education/Hungary-Profile.pdf

There are also numerous international schools for selection https://www.international-schools-database.com/in/budapest

Culture/nightlife

Budapest is a vibrant cultural hotspot, rich in history. Some notable attractions include the Hungarian state opera, Saint Stephen’s Basilica (named after the country’s first king) and the Hungarian national Gallery as well as the Danube palace.

The city also has a vibrant nightlife scene, with a significant student presence and annual influx of international visitors. A concentration of hotspots can be found in District 5, close to the administrative centre.

Article supplied by global search & selection firm: Kingpin International, thank you.