Taxation of foreign income in Hungary in 2026

Everything hinges on this: tax residency

Before you start crunching any numbers, one question has to be settled: where are you tax resident? This is not the same as where you work, and not necessarily where you live either. Residency expresses which state you have the closest tax connection with – and that decides who may tax you.

The logic of the Hungarian rule is simple, but its consequence surprises many. A resident individual is taxed here on their entire income, so a salary earned abroad enters the view of the Hungarian tax authority. A non-resident, by contrast, is taxed here only on income sourced from Hungary.

Residency is decided not by one factor but by a ranking, and it is worth keeping this in mind, because this is exactly where conclusions tend to go wrong:

1. permanent home – where your home is, permanently available to you;
2. centre of vital interests – where your family lives, where you make your living, your economic centre of gravity;
3. habitual abode – this is where the notorious 183-day rule sits;
4. citizenship – if the above do not decide.

On top of this, the Hungarian PIT Act generally treats a Hungarian citizen as a resident, even if they spend a year abroad. In other words, merely moving out to work does not automatically end your Hungarian tax liability.

The 183 days almost everyone gets wrong

If there is one myth that stubbornly persists, it is this: "if I spend more than 183 days abroad, I pay tax there, end of story." Reality is more nuanced.

The 183 days do matter, but not in deciding residency – rather in determining the place of taxation of a specific income, typically salary. The main rule for salary is that it is taxed where the work is done. An exception applies only if all three conditions are true at once:

• you spend fewer than 183 days in the other state within a 12-month period;
• your pay is not borne by an employer there;
• your pay is not deducted as a cost by a permanent establishment there.

If all three hold, the salary can stay in Hungarian taxation. If any one fails – say, your pay comes from a German company – then typically the country of work steps in. You can see the 183 days alone are not enough to decide: they are just one cog in the system.

The two methods that protect you from double tax

Suppose you are a Hungarian resident and your salary is also taxable abroad. In principle you would be taxed twice on the same thing. This is exactly what a double taxation treaty prevents – Hungary has more than 80 in force. They use two solutions, and these two are all you really need to remember.

Exemption – the most common

Most Hungarian treaties (Germany, Austria and typically much of the EU) work this way: salary already taxed abroad is exempted from Hungarian tax. In principle it would be counted to set the Hungarian rate, but since we have a flat 15% PIT, this has no practical effect. The result: no extra tax arises here on that salary. You still have to declare it, though.

Credit – the USA, for example

Some treaties (the best known being the US one) solve it differently: the Hungarian tax is computed, but the tax paid abroad is deducted from it. You pay the difference here. If the foreign tax was higher than the Hungarian 15%, nothing remains here; if lower, you pay the gap.

And if there is no treaty?

This is the rarer, but not negligible case. With a few countries we have no treaty, and then the PIT Act's own rule applies: 90% of the tax paid abroad is creditable, but the Hungarian tax cannot fall below 5% of the income. In plain terms, without a treaty some Hungarian tax almost certainly remains.

These three scenarios – exemption, credit, no treaty – are exactly why I built them into the Foreign income calculator. Enter your foreign gross salary, the tax paid abroad, pick the treaty type, and it shows how much Hungarian PIT remains. This calculator exists because there are plenty of articles on the topic but hardly any working calculator – yet the calculation is precisely where most people get stuck.

Let's be concrete: an Austrian salary

Take a common situation. You are a Hungarian resident, you worked in Vienna, and you earned the equivalent of HUF 12 million gross, on which Austria already withheld local tax.

Because the Hungary–Austria treaty uses exemption, this salary is exempt from Hungarian tax. In principle it would be counted to set the rate, but the flat rate makes that irrelevant. So on that HUF 12 million, zero extra PIT arises here – but it must go into the return.

Now swap Austria for the USA, where credit applies. The Hungarian 15% is HUF 1.8 million. From this you deduct the tax paid in America. If you paid HUF 2 million there, nothing remains here. If only HUF 1 million, then the difference – HUF 800,000 – is your Hungarian tax. Same salary, two treaties, two entirely different results – which is why you cannot answer "how much do I owe" off the top of your head.

Contributions are not the same as tax

This is where most of the confusion arises. Tax and social security contributions are two separate worlds with separate rules. Tax is decided by residency and the treaty; contributions, by where you actually work – and here it is not the 183 days but the social-security coordination rules that count.

Within the EU, the A1 certificate is the key: with it, a posted worker can temporarily remain in the Hungarian system and avoid paying contributions twice. If, however, you move abroad and take up work there, you generally become insured under that country's system – regardless of how your taxation works out.

Beyond salary: what else to watch

If you are a Hungarian resident, not only salary but many other foreign income types may be reportable:

• Foreign dividends and interest: dividends on foreign shares and foreign bank interest are typically capital income, often with withholding tax that can be credited.
• Platform income: YouTube, Twitch, social platforms – this is generally income from self-employed activity.
• Crypto: gains made on a foreign exchange must also be declared here; we cover this separately in the crypto tax article.
• Foreign real estate: income from renting or selling is typically taxed in the state where the property lies.

Don't forget one thing: foreign income must go into the return even if it turns out exempt. The filing obligation stands on its own – the most common mistake is precisely to skip it on a "it's exempt anyway" basis, and then comes the query from NAV.

Frequently asked questions