Expat Taxes in Hungary

[!WARNING] The KATA regime was heavily restricted in 2022. It is no longer the easy loophole it once was.

The 183-Day Rule

If you spend more than 183 days in Hungary within a calendar year, you become a tax resident subject to global taxation.

• Income Tax: Hungary operates on a flat personal income tax rate of 15%. This is one of the lowest headline rates in the EU.
• Social Contributions: While the income tax is low, the social contribution tax (13%) and social security contributions (18.5%) can push your total tax burden much higher if you are integrated into the local system.

The Death of KATA for B2B

For years, expats used the "KATA" (Small Taxpayers Itemized Lump Sum Tax) system, paying a flat fee of around €150/month for complete tax coverage.

• The 2022 Reform: The government effectively destroyed this for most expats. Now, you can only use KATA if you sell goods or services exclusively to private individuals (B2C). If you issue an invoice to a company (B2B)—which almost all digital nomads do—you are disqualified from KATA.