Employers have to meet a number of tax payment conditions in relation to the Hungarian employment of foreigners, RSM DTM BLOG reports.
RSM DTM BLOG said, if no double tax treaty is in place between Hungary and the country in question, both the residence of the individual and the Hungarian tax payment obligation have to be determined based on domestic legal regulations.
The entire income of a Hungarian resident individual is taxable in Hungary. Foreign resident individuals only have to pay tax in Hungary on their Hungarian source income.
RSM DTM blogger said: as mentioned earlier, in the absence of a double tax treaty it is possible that an individual qualifies as resident in more than one country under national rules and more than one country will tax the same income. For such situations, Hungarian law provides that if the consolidated tax base includes income on which the individual paid any tax corresponding to income tax abroad, 90 percent of the tax paid abroad but maximum the amount calculated by applying the domestic tax rate to the tax base of the foreign income shall be deducted from the tax payable.
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