anyone here with experience running a company in Hungary?
- Thread starter thedirtyteller
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I have the opportunity to work with several accounting companies of Budapest.
At work, I found hungarian people unreliable, slow, unproductive compared to Croatian and Romanian.
Then, I discovered there were no Uber and no Glovo. Hungary is a soviet country in the middle of Europe. Their legal framework is more complicated than any other central European country.
One of my Italian Friends created a company in Hungary. He stayed there 2 years and came back to Milano. He told me he was enough waiting for Hungarian workers chatting while they should be at work.
So, if you send them an email, maybe they will︀ answer in a week, maybe they will never answer. If you order them to do︁ something, maybe they will deliver two weeks late (this happened to me).
Budapest is one︂ of the most beautiful european cities but beautiful walls can't help us to be financially︃ successful
At work, I found hungarian people unreliable, slow, unproductive compared to Croatian and Romanian.
Then, I discovered there were no Uber and no Glovo. Hungary is a soviet country in the middle of Europe. Their legal framework is more complicated than any other central European country.
One of my Italian Friends created a company in Hungary. He stayed there 2 years and came back to Milano. He told me he was enough waiting for Hungarian workers chatting while they should be at work.
So, if you send them an email, maybe they will︀ answer in a week, maybe they will never answer. If you order them to do︁ something, maybe they will deliver two weeks late (this happened to me).
Budapest is one︂ of the most beautiful european cities but beautiful walls can't help us to be financially︃ successful
Hungary is OVERESTIMATED:
I forgot to mention that I know a man who was a self employed in Hungary, and he received a letter from the tax authority asking him to pay more social contribution for the past 4 years. Self employed individuals pay less social contribution than employees. If the Hungarian tax authority sees that you get your money from one source, you are considered to be an employee.
Now, self employed individuals (under KATA regime) also have been banned from working for companies.
https://xpatloop.com/channels/2022/...rough-in-hungary-despite-street-protests.html
I also didn't︎ talk about the problem of corruption in Hungary.
https://www.france24.com/en/live-ne...ry-risks-eu-funding-cut-over-corruption-fears
Viktor Orban isn't a good nationalist️ who cares about his people. He is just a clown in economy just like Putin
I forgot to mention that I know a man who was a self employed in Hungary, and he received a letter from the tax authority asking him to pay more social contribution for the past 4 years. Self employed individuals pay less social contribution than employees. If the Hungarian tax authority sees that you get your money from one source, you are considered to be an employee.
Now, self employed individuals (under KATA regime) also have been banned from working for companies.
https://xpatloop.com/channels/2022/...rough-in-hungary-despite-street-protests.html
I also didn't︎ talk about the problem of corruption in Hungary.
https://www.france24.com/en/live-ne...ry-risks-eu-funding-cut-over-corruption-fears
Viktor Orban isn't a good nationalist️ who cares about his people. He is just a clown in economy just like Putin
Same thing has been done/implemented in Croatia. It's the equivalent of UK's IR35 rules.
https://en.wikipedia.org/wiki/False_self-employment
https://en.wikipedia.org/wiki/False_self-employment
Orban:
- Hungarians did not want to become "peoples of mixed race"
- Orban has spoken about maintaining "ethnic homogeneity" in Hungary
- in contrast to Western Europe's "mixed-race world" where people mixed with arriving non-Europeans, Hungary was not a mixed race country
- "I am the only politician in the EU who stands for an openly anti-immigration policy,"
PS: I know, we are all expats, not immigrants 😉
https://www.reuters.com/world/europ...-not-rooted-racism-after-backlash-2022-07-28/
- Hungarians did not want to become "peoples of mixed race"
- Orban has spoken about maintaining "ethnic homogeneity" in Hungary
- in contrast to Western Europe's "mixed-race world" where people mixed with arriving non-Europeans, Hungary was not a mixed race country
- "I am the only politician in the EU who stands for an openly anti-immigration policy,"
PS: I know, we are all expats, not immigrants 😉
https://www.reuters.com/world/europ...-not-rooted-racism-after-backlash-2022-07-28/
Taxation of dividends
In the 2022 tax year, income from dividends paid to individuals is subject to a 15 percent personal income tax. According to the main rule, the payer must determine the tax charged on the dividend at the time of payment, deduct it, and pay it by the 12th of the month following the payment and provide data in return 08.The tax on dividends earned in a foreign currency must be determined in the same foreign currency, deducted and converted at the exchange rate valid at the time the income was earned, and paid in forints.
In the absence of a payer,︀ the private individual must determine the tax on the dividend and dividend advance himself, and the individual must pay the tax by the 12th day of the first month of︁ the quarter following the payment [Article 66 (3) of the Szja Act].
Taxation of dividend︂ advances
The payer must deduct 15% personal income tax from the dividend advance paid to︃ private owners , which the private individual can calculate as a tax advance against the︄ tax determined after the final dividend. The dividend advance must be indicated in the return︅ for the year of payment only as information (if a dividend advance was paid in︆ 2021, then on line 56 of sheet 21SZJA-B), i.e. it is not declared as separately︇ taxable income.Declaration of dividend advance as actual dividend
If the previously paid dividend actually turns into a dividend in 2021, in that case, the income from the dividend must︈ be declared on line 167 of sheet 21SZJA-04 based on the data according to the︉ report . The tax previously paid on the dividend advance is shown on line 66︊ of sheet 21SZJA-C , but the individual no longer has to pay the tax on︋ the declared dividend as his own obligation.Social contribution tax liability
After the dividend payment,︌ in addition to the personal income tax burden of 15 percent, it is also necessary︍ to pay social contribution tax, the rate of which is 13 percent . The social︎ contribution tax must be paid until the sum of all incomes subject to the social️ contribution tax obligation reaches 24 times the minimum wage , i.e. HUF 4,800,000 in 2022. In the case of calculating the social contribution payment ceiling, the total amount of all income that falls under the obligation to pay social contribution, such as wages, membership income, income from property rental, dividends, can be taken into account.It is important to note that social contribution tax does not have to be paid on the dividend advance , it is only necessary if the dividend advance is converted into a dividend.
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So if you want to get paid via dividencds from a Hungarian company while living in Hungary, you will pay CIT 15% + Dividend tax 15% = 30% and then, you will have to pay social contribution which is maximum 13% of HUF 4,800,000 = 614000︀ HUF = 9820 euros
That's what I hate when a︃ country might have low corporate tax or something else, but then there is that catch︄ that no one tells you about till the very end.
Before you take that step you want to find a legal & tax advisor to help you clarify your personal situation. They may tell you if it is a good move to do for you or not.
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