Hungary is an increasingly attractive destination for entrepreneurs, startups, and expatriates looking to tap into the heart of Central Europe. Whether you’re setting up a business or relocating for work, understanding the financial and legal framework—especially accounting in Hungary—is crucial for smooth operations and compliance.
In this guide, we’ll cover everything you need to know about accounting in Hungary, from regulatory standards to choosing an accountant, helping both businesses and expats navigate the system with confidence.
Why Understanding Accounting in Hungary Matters
Hungary has a robust legal and financial system governed by national and EU regulations. The accounting Hungary landscape is regulated by the Hungarian Accounting Act, which is aligned with the International Financial Reporting Standards (IFRS) for certain entities. Failure to comply with accounting laws can result in penalties, business restrictions, or even legal complications.
Key Features of the Hungarian Accounting System
1. Hungarian Accounting Act
Hungarian accounting is governed by the Act C of 2000 on Accounting, which outlines requirements for bookkeeping, financial statements, and audit obligations. It is applicable to all Hungarian-registered companies and also influences how foreign companies operate locally.
2. Currency and Language
All financial records must be maintained in Hungarian Forint (HUF) and the Hungarian language. This makes working with a local accountant essential for businesses and expats unfamiliar with local standards.
3. Double-Entry Bookkeeping
Businesses in Hungary must use double-entry bookkeeping, with mandatory ledgers such as the general ledger, cash book, and inventory records.
Financial Reporting and Taxation
1. Annual Financial Statements
Companies must submit annual financial statements, including:
Larger companies or those with significant public interest may also need to prepare consolidated financial statements under IFRS.
2. Taxation in Hungary
Understanding taxes is central to accounting. Key taxes include:
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Corporate Tax: 9% (one of the lowest in Europe)
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VAT: Standard rate is 27%
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Personal Income Tax: Flat rate of 15%
Timely and accurate reporting is crucial to avoid fines or audits.
Accounting Services for Expats and Foreign Businesses
Many expatriates and foreign investors rely on professional accounting Hungary services to manage their financial obligations. Services commonly include:
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Company formation and registration
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Monthly bookkeeping
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Payroll administration
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Tax advisory and compliance
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Annual financial reporting
Working with a bilingual or English-speaking accountant is highly recommended for non-Hungarian speakers.
Choosing the Right Accountant in Hungary
Here are some tips for selecting a qualified accounting partner:
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Certified Expertise: Ensure the accountant or firm is certified and recognized by the Hungarian Chamber of Auditors.
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Experience with International Clients: Look for professionals who understand cross-border taxation and foreign-owned company structures.
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Digital Tools: Consider firms that offer modern accounting software compatible with Hungarian tax authorities’ digital reporting requirements (like NAV).
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Language Support: Especially for expats, choosing a service provider that offers English support is invaluable.
Common Challenges and How to Overcome Them
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Language Barriers: All official documents must be in Hungarian. Solution: Work with bilingual professionals.
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Complex Tax Rules: Hungary has strict and frequently updated tax regulations. Solution: Stay up to date with the help of a tax advisor.
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Cultural Differences: Business etiquette and regulatory expectations can differ. Solution: Engage with local consultants to bridge gaps.
Conclusion
Whether you’re running a business or living in Hungary as an expatriate, understanding the local financial system is key to long-term success. With its favorable tax rates and EU-friendly regulations, Hungary offers ample opportunities—but only if you’re on top of your accounting Hungary responsibilities.
Partnering with a qualified local accountant not only ensures compliance but also gives you peace of mind, so you can focus on growth and opportunity.
