With the transformation of the international labor market, it has become increasingly common for employees to work not in the country of their employer’s registered seat, but from another state – for example, Hungary – in the form of remote work or home office.

This raises numerous tax, corporate law, and labor law questions both for the foreign employer and the employee working in Hungary.

Our experts provide comprehensive tax, legal, labor law, and payroll support to foreign companies with one or more employees working partly of fully in Hungary.

Our Services for Foreign Employers

Permanent Establishment and Registration Requirements

  • We assess whether the employee’s activities in Hungary create a permanent establishment for the foreign company.
  • In the case of a permanent establishment, we evaluate corporate income tax and local business tax obligations as well as registration requirements.
  • We assist in selecting the appropriate form of business presence (e.g., branch office, subsidiary), and our legal experts provide full administrative support. Following this, we offer complex tax advisory, payroll, and accounting services.
  • If no permanent establishment is created, we provide advice on amending employment contracts and job descriptions.

Labor Law Support

  • Our labor law experts prepare or review employment contracts to ensure compliance with domestic and international regulators.

Managing Tax and Social Security Obligations

  • Based on international and domestic legal provisions, we determine the tax and social security obligations of both the employer and the employee in Hungary.

If the employer has no registration obligation in Hungary

  • We register the foreign company as an employer in Hungary to enable fulfillment of tax and social security obligations.
  • We handle all necessary employment-related notifications to the authorities.
  • We prepare monthly tax and contribution calculations and provide detailed guidance on fulfilling payment obligations
  • We prepare and, with authorization, submit the monthly tax returns on behalf of the foreign employer.
  • To avoid risks, we regularly check the foreign company’s tax account to ensure successful filing and payment.
  • We obtain A1 certificates where necessary.

Employee support

  • We provide assistance in preparing annual personal income tax returns.
  • We support employees in obtaining necessary certificates (e.g., tax residency certificate, income certificate) to avoid double taxation.

Why Choose RSM’s Services for Foreign Employers

  • Comprehensive solutions: Tax, labor law, and legal advisory from a single source.
  • Risk management: Ensuring full compliance of the foreign company with all Hungarian regulations.
  • Practical support: We not only provide advice but also take over complete administration and dealings with authorities.