Foreign enterprises, employees in Hungary

Foreign enterprises, employees in Hungary

In the event that an employee is employed in Hungary by an employer with registered offices in another country, such employee shall, as a general rule, become insured in Hungary.

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Don't hesitate to contact us!

József Vizer, RSM Hungary, Tax manager, Tax expert

József Vizer

Director, Tax services


Who is our offer addressed to?

Our offer is addressed to foreign enterprises not obligated to be registered under Hungarian law which employ private individuals in Hungary in the framework of a relationship involving an insurance obligation.

What tax obligations are imposed on employees of foreign enterprises employed in Hungary?

The foreign employer shall be obligated to assess and deduct 10% pension contribution, and 8.5% health insurance and labour market contribution (collectively: “social insurance contribution”) after the income taxable in Hungary paid to the employee, and to pay it to the state tax authority together with the 19,5 % social contribution tax encumbered on it (hereinafter: “social contribution tax”).

Obligations of registration, payment, and submission of returns as related to employment

Obligations of registration, social contribution payment, and social contribution tax payment as related to the legal relationship entailing an insurance obligation, as well as the obligation to submit returns must be performed

  • by the Hungarian branch of the foreign enterprise; in the absence thereof,
  • by it’s financial representative, or
  • directly by itself.

In the event that a foreign enterprise meets its obligations directly by itself, it is obligated to register with the tax authority before the commencement of such insurance. In the event of any omission of such employer registration, the obligations of registration, social contribution payment, and social contribution tax payment – as well as of the submission of returns – related to the insurance of the natural person employed shall be borne by the employee, together with any legal consequences following from any failure to meet such obligations.

The electronic returns submission, data disclosure, and payment obligations related to social insurance contribution and social contribution tax must be met on a monthly basis, by the 12th day of the month following the current month, while personal income tax payments must be made on a quarterly basis, by the 12th day of the month following the relevant quarter.

Why is it worthwhile to turn to us?

  • Our properly prepared specialists help assess whether any - and if so, what type of - tax liabilities are generated in connection with the income of private individuals employed in Hungary by a foreign enterprise.
  • As a financial representative, we can meet all the Hungarian tax obligations of a foreign enterprise.
  • Should a foreign enterprise wish to settle its domestic tax liabilities itself, or if tax obligations fall on the employed, then:
  • we can provide assistance in registration in Hungary,  
  • we produce calculations of monthly and quarterly tax and contribution payment obligations,
  • we complete the required returns and submit them electronically pursuant to an authorization,
  • we provide detailed guidelines on a monthly basis for the transfer of tax and contribution payment obligations, or if requested, we effect such transfers within the scope of our administrative services in lieu of the foreign enterprise, 
  •  in order to avoid any risks, we verify the successful submission of returns and completion of transfers on the tax account of the foreign enterprise and the employed on a regular basis.

If you have any question, please don't hesitate to contact our experts!

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