Planning to purchase or lease a company car in Hungary? It is essential to understand the applicable tax rules before making a decision. The Hungarian regulations regarding VAT, vehicle tax and company car tax may affect the overall cost and administrative burden. Below is a summary of the key aspects to consider.
VAT Deduction – Not Always Allowed
As a general rule, VAT is not deductible on the purchase of passenger vehicles in Hungary.
Exception: If the car is used at least 90% for leasing to third parties, the VAT may be deducted. However, VAT must be charged on the lease fee in this case.
Leasing and Renting – More Favourable VAT Treatment
If the vehicle is acquired under operating lease, open-end lease or long-term rental, partial or full VAT deduction may be possible.
- 50% VAT deduction can be applied by default without keeping a trip log – a simple record of business use is sufficient.
- 100% deduction is available only with a detailed and up-to-date mileage log documenting business-related journeys.
Note: Full deduction requires strict documentation.
VAT When Selling the Vehicle
Whether VAT must be paid upon sale depends on the VAT treatment at the time of acquisition:
| VAT deducted on purchase | VAT payable on sale |
| Yes | Yes |
| No | No |
Important: If the use of the car changes within 5 years, a proportional VAT adjustment may be necessary.
Vehicle Tax – Based on Power and Year of Manufacture
Vehicle tax in Hungary is based on the engine power in kilowatts (kW). If power is indicated in horsepower (HP), convert as follows: HP / 1.36, rounded.
2025 Tax Rates (per kW):
| Year of manufacture | Tax rate (HUF/kW/year) |
| 2022–2025 | 360 HUF |
| 2018–2021 | 310 HUF |
| 2014–2017 | 240 HUF |
| 2010–2013 | 195 HUF |
| 2009 or earlier | 145 HUF |
Example: A car manufactured in 2020 with 100 kW power:
100 × 310 = HUF 31,000/year
Exemption:
Fully electric vehicles are exempt from vehicle tax.
Company Car Tax – Who Must Pay and When?
Company car tax must be paid by the person or entity operating or leasing the vehicle.
Avoiding Double Taxation
If the same entity is liable for both vehicle tax and company car tax, the company car tax can be reduced by the pro-rated vehicle tax already paid.
Deadlines for Payment:
| Tax type | Deadline |
| Vehicle tax | Once a year: 15 April |
| Company car tax | Quarterly, by the 20th of the month following the quarter |
Key Considerations Before Acquiring a Company Car in Hungary
✔ Leasing and rental options offer more flexibility for VAT deduction.
✔ Electric vehicles are exempt from both vehicle and company car tax.
✔ If the same entity pays both taxes, the company car tax may be reduced.
Please note: This summary provides general information and does not replace professional advice tailored to your individual situation.
It is strongly recommended to consult with your accountant before making a decision about acquiring a company vehicle in Hungary.
If your company is seeking a reliable accounting partner in Hungary, we would be pleased to provide a tailored service offer.
📩 Feel free to contact us for a quotation
