As of January 1, 2025, the regulations governing tax allowances available to foreign nationals changed. The law narrows the eligibility criteria for the First Marriage and under-25 personal income tax base allowances. These tax allowances will only be available to Hungarian citizens, as well as citizens of EEA countries and non-EEA countries bordering Hungary (Ukraine, Serbia).*
New rules for eligibility for family tax allowances:
- Family tax allowance: If a foreign individual is not eligible for family allowance under Hungary’s family support legislation but is entitled to family allowance, disability benefits, or similar support under the laws of an EEA country or a non-EEA country bordering Hungary (Ukraine, Serbia) and meets additional requirements for claiming the family tax allowance, they may qualify. It has not changed that the basic entitlement to family tax allowance depends on the family allowance (according to the Family Support Act).
- Tax benefit for mothers under 30 years old: the legislation basically determines its entitlement based on the eligibility for the family tax allowance. According to the Hungarian Tax Authority’s (NAV) guidelines, a foreign individual is eligible if they qualify for family allowance, disability benefits, or similar support under the laws of an EEA country or a non-EEA country bordering Hungary (Ukraine, Serbia) and meets the additional requirements.
To avoid double taxation, it’s important that one of the conditions for claiming the tax allowance is that the individual must not claim or have claimed the same or a similar allowance for the same period in another country.
The individual must also declare that they are entitled to claim the Family Tax Allowance in Hungary and have not claimed or will not claim an identical or similar allowance in another country on their income.
The interpretation of the changes in the legislation raises further questions, and we await the tax authority’s guidance on the above. Follow our website to stay informed about important updates.
*References: Sections 29/B(5), 29/C(7), and 29/F(6) of the Act on Personal Income Tax
