RSM provides end-to-end advisory services on the tax and social security matters arising during international assignments and actively supports the related administrative tasks to ensure compliance.

Our experts support clients throughout the entire assignment lifecycle in relation to taxation and social security obligations—from rapid assessment of the relevant facts and circumstances and defining obligations, through calculations, returns and obtaining official certificates, to post-filing reconciliations and follow-up discussions.

International assignments – expats

In the day-to-day operations of multinational groups, it is common for employees to be assigned to Hungary or the region for the short term (typically a few weeks, months, or even 1–2 years) for projects, system implementations, knowledge transfer, or temporary capacity expansion.

In such assignments, the primary risks are typically not logistical, but rather incorrectly determined tax residency, issues of double taxation, social security coverage, and the required official certificates (e.g., A1/Certificate of Coverage, S1).

What is expat taxation and why is it critical?

For an expat (an employee working on assignment), it is always necessary to assess:

  • Where are salary and benefits subject to taxation —Hungary, the home (sending) country, or split between the two?
  • Where is the individual covered for social security purposes (A1/CoC, S1, etc.)?
  • What employer and employee obligations arise (registration, calculation, filing, payment)?
  • How can double taxation be avoided, and how should the system of certificates be managed?

The stakes are not limited to penalties: a poorly managed assignment may result in retrospective tax underpayments, social security contribution shortfalls, late payment interest/surcharges, and serious reputational/compliance issues within the group.

In which cases is this service needed?

  1. Short-term assignment to Hungary (a few weeks to a few months) for a project
  2. Regional mobility (HU–CEE) with work performed across multiple countries
  3. Executive / key employee assignments where a benefits package and tax base allocation (split) may be relevant
  4. Review of the 183-day rule and related treaty conditions when quick decisions are required (tax residency, place of work, documentation, treaty analysis, economic employer concept)
  5. Requirement to evidence social security coverage (A1/CoC, S1) to commence work or during an inspection
  6. Hungarian filing/reconciliation obligations (employee PIT, employer monthly returns, tax account reconciliation)

Key elements of RSM’s Tax and Social Security Handling Service for International Assignments (Expats)

1) Assessment of tax residency

  • Tax residency analysis based on the facts
  • Handling dual residency, applying tax treaties
  • Documentation recommendations (what HR/Finance/Tax should retain to avoid future disputes)

2) Determining the country of taxation and social security, and analysing permanent establishment (PE) risk

  • Determining where tax and social security obligations arise
  • Allocating the tax base between countries if work is performed in multiple jurisdictions
  • Handling the tax impact of benefits, cafeteria / bonus / relocation items
  • Assessing the economic employer concept
  • Preliminary review of permanent establishment risks, where relevant

3) Personal income tax and social security calculations

  • Support in designing and operating net-to-gross / hypothetical tax / shadow payroll structures (as required)
  • Review of employee and employer tax and social security liabilities
  • Scenario analyses for short-term decisions (e.g., date shifts, assignment extensions)

4) Filing support

  • Preparation of the individual’s personal income tax return 
  • Coordination of related monthly obligations, as required (aligned to group processes)

5) Review of the tax account and verification of payments

  • Tax account reconciliation to identify and filter risks
  • Support in handling overpayments/underpayments

6) Assistance in obtaining official certificates

  • Tax residency and income certificates to avoid double taxation (Certificate of Tax Residence)
  • A1 certificate (formerly E101) – evidence of applicable social security legislation (Certificate of Coverage / Portable Document)
  • S1 certificate (formerly E106, E109 or E121) – evidence of entitlement to healthcare (Certificate of Entitlement to Healthcare)
  • Certificate of insurance periods (Statement of Insurance Periods)

Why choose RSM?

  • End-to-end solution from a single provider: tax, social security and administrative support across the full international mobility lifecycle.
  • Risk reduction and compliance: solutions aligned with Hungarian and international requirements.
  • International experience in individual tax and social security matters: dedicated expert focus on expat cases.
  • Practical, decision-support approach: not only analysis, but concrete, quickly implementable recommendations—especially in time-sensitive situations (e.g., 183-day rule, extensions, project delays).
  • HR- and payroll-integrated approach: support with shadow payroll, net-to-gross calculations and benefits package administration, aligned to group-level processes.
  • Extensive experience in dealing with tax and social security authorities and administrative support: active involvement in obtaining certificates, preparing returns and reconciling tax accounts—execution, not only advice.
  • Regional and international collaboration: coordination within the RSM network for multi-country mobility cases, with a consistent professional approach.