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HATC SAMPLE EDITION:
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22nd May, 2025
Hungary’s tax regime atypical in EU
Hungary’s tax regime stands out in the region with a unique model combining business-friendly corporate tax rates with extra-high levies on consumption, according to the latest tax guide by consultant Forvis Mazars, which covered 22 European and three Central Asian countries in its annual report.
Hungary has the lowest corporate tax rate in Europe at 9%, but its 27% standard VAT rate is the highest in the EU, placing a significant portion of the tax burden on consumers.
The tax wedge for single, childless workers is 41%, above the 38% average in the region, but the rate drops to 23% for families with three children, the second lowest in the region.
Hungary’s tax model, based on low corporate taxes but high levies on consumption, contrasts sharply with more balanced systems in countries such as Austria or Germany.
Hungary is ranked at the forefront of tax digitalisation in the region thanks to the launch of real-time invoice reporting (eVAT), the online cash registers and the Ekáer system, which tracks and monitors shipments within the country.
These measures helped reduce the VAT gap to one of the lowest in Europe, the study found.
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Sources regularly consulted, with abbreviations used in text: Népszabadság (N); Magyar Hírlap (MH); Világgazdaság (VG); Napi Gazdaság (NG); Magyar Nemzet (MN); Népszava (Nsz); Kossuth Rádió news (KR); nightly TV news (TV).
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