Tax residence in Hungary for Indian taxpayers

Hungary decides residence in a fixed order: Hungarian citizenship, a long-term residence right, an only permanent home in Hungary, the centre of vital interests, then 183 days in the calendar year. India counts days over 1 April – 31 March. If both countries claim you, Art. 4(2) of the India–Hungary DTAA decides; Hungary relieves Indian-taxed income mainly by exemption (Art. 23).

Check your status: India and Hungary

Free, no sign-up, about 3 minutes. Conclusion under Indian income-tax law, compared with the law of Hungary and the tax treaty.

When Hungary treats you as a tax resident

Hungary treats its citizens as residents by citizenship alone; a dual citizen only if he or she has a registered Hungarian address. For others: long-term residence right, permanent home, centre of vital interests or 183 days.

Hungarian law asks whether your only permanent home is in Hungary; a home in India (or elsewhere) sends you to the centre-of-vital-interests test.

You are a Hungarian citizen with a registered address in Hungary — under the Szja tv. you are a Hungarian resident by citizenship alone, regardless of days or home.
You hold only Hungarian citizenship — under the Szja tv. you are a Hungarian resident by citizenship alone, regardless of days or home.
You hold a long-term (permanent) residence right in Hungary — under the Szja tv. you are a Hungarian resident.
Your only permanent home is in Hungary — you are a Hungarian resident.
Your centre of vital interests is in Hungary — you are a Hungarian resident.
Your centre of vital interests cannot be determined and you spent 183 days or more in Hungary in the calendar year — that is a habitual abode, so you are a Hungarian resident.

When you are a nonresident

Under Hungarian law you are not a Hungarian resident. Hungarian-source income (including pay for work physically done in Hungary) is still taxed there, unless India is your treaty residence and the 183-day rule of Art. 15(2) of the India–Hungary DTAA exempts it.

Where the rules of Hungary clash with Indian tax rules

Resident of both countries: Art. 4(2) of the India–Hungary DTAA decides. Hungary and India both treat you as resident under their own law. Art. 4(2) of the India–Hungary DTAA decides: permanent home; with a home in both countries, centre of vital interests; if that cannot be determined, or you have a permanent home in neither, habitual abode; then nationality; then mutual agreement. Hungarian status grounds such as citizenship or a long-term residence right do not count in the tie-breaker until the nationality step.
Collision: Hungarian citizenship and a Hungarian address. If you hold Hungarian citizenship and a registered Hungarian address (address card), Hungary treats you as resident by citizenship alone — even if you live in India. If India also treats you as resident, the DTAA tie-breaker applies and starts with the permanent home; citizenship matters only if habitual abode does not decide. Deregistering the Hungarian address removes the citizenship-based residence for a dual citizen (the other tests still apply).
Collision: Hungarian long-term residence right. With a long-term residence right Hungary treats you as resident automatically, whatever your home or centre of vital interests (Kúria, Kfv.I.35.493/2019/7). If you are also resident in India, the residence permit itself plays no role in Art. 4(2) of the DTAA: permanent home, centre of vital interests and habitual abode decide.
Collision: centre of vital interests in Hungary. If your centre of vital interests is in Hungary, Hungary treats you as resident even if you keep a home in India. The Kúria weighs family and economic ties, in particular where you use your bank accounts and cards day to day. If India also treats you as resident under its day tests, Art. 4(2) of the DTAA decides — with a home in both countries, the same centre-of-vital-interests question.

What else to know

Different tax years — and a rolling 12-month period for salary. India counts your days over its tax year (1 April – 31 March); Hungary decides residence for the calendar year in a fixed order: Hungarian citizenship, a long-term residence right, an only permanent home in Hungary, the centre of vital interests, and finally 183 days as habitual abode. The 183-day test for salary in Art. 15(2)(a) of the DTAA counts days in any twelve-month period commencing or ending in the fiscal year concerned (for India the financial year beginning on 1 April, for Hungary the calendar year — Art. 3(1)(j)).
Working in Hungary while resident in India: 183 days in any 12 months (Art. 15(2)). Work physically performed in Hungary — including remote work for an Indian employer — is Hungarian-source income. If India is your treaty residence, Hungary does not tax that pay only if all three conditions of Art. 15(2) are met: not more than 183 days in Hungary in any twelve-month period commencing or ending in the fiscal year concerned, an employer who is not resident in Hungary, and pay not borne by a permanent establishment or fixed base the employer has in Hungary. Otherwise Hungary taxes the pay for Hungarian work days and India gives credit under Art. 23(2).
How India and Hungary relieve double taxation. If India is your state of residence, India deducts from Indian tax the Hungarian income tax paid, up to the Indian tax attributable to the income Hungary may tax (Art. 23(2)); claim it with Form No. 44 (rule 76 of the Income-tax Rules, 2026). If Hungary is your state of residence, it exempts income that India may tax under the DTAA, such as salary for work in India (Art. 23(1)(a)), and credits the Indian tax only on dividends, interest, royalties and fees for technical services (Art. 23(1)(b)).
Social security: India–Hungary agreement (from 1 April 2013). The India–Hungary social security agreement has been effective since 1 April 2013. An employee posted from India for up to 60 months (5 years) can keep contributing in India with a certificate of coverage from EPFO and avoid Hungarian contributions for that period. Apply for the certificate before the posting starts.

How dual residence is resolved

If both countries treat you as a resident, Art. 4(2) of the treaty applies: Agreement for avoidance of double taxation and prevention of fiscal evasion between India and Hungary — Convention and Protocol done at New Delhi on 3 November 2003. The tests are applied in order — permanent home, centre of vital interests, habitual abode, nationality, and finally mutual agreement between the tax authorities.

Terms you will come across in Hungary

belföldi illetőségű magánszemély: Hungarian resident individual, taxable on worldwide income
Szja tv.: Act CXVII of 1995 on Personal Income Tax
lakcímkártya: address card — proof of a registered Hungarian address
létérdekek központja: centre of vital interests
szokásos tartózkodási hely: habitual abode — 183 days or more in the calendar year
NAV: the Hungarian National Tax and Customs Administration

Questions

Does a Hungarian long-term residence permit make me resident there?

Yes — under Hungarian law it makes you resident automatically. If India also treats you as resident, the permit plays no role in Art. 4(2) of the India–Hungary DTAA: permanent home, centre of vital interests and habitual abode decide.

How does Hungary relieve tax on my Indian income?

If Hungary is your state of residence, it exempts income India may tax under the DTAA (Art. 23(1)(a)) and credits Indian tax only on dividends, interest, royalties and fees for technical services (Art. 23(1)(b)).

Is there an India–Hungary social security agreement?

Yes, effective since 1 April 2013: an employee posted from India for up to 60 months can keep contributing in India with an EPFO certificate of coverage.

Sources

Legislation and official guidance

§ 3 point 2(a) of Act CXVII of 1995 on Personal Income Tax (Szja tv.) — Every Hungarian citizen is resident, except a dual citizen who has no residence or habitual abode (registered address) in Hungary.
NAV booklet 04 «Magánszemélyek külföldről származó jövedelme» (20 Feb 2026) — Hungarian citizens remain resident even when living abroad for years (except dual citizens without a Hungarian address); categories of residents are listed as in § 3 point 2 Szja tv.
§ 3 point 2(c) Szja tv. — Resident: a third-country national holding a long-term residence right in Hungary, and a stateless person.
§ 3 point 2(d) Szja tv. — Other individuals are resident if (da) their only permanent home is in Hungary; (db) their centre of vital interests is in Hungary, if they have no permanent home in Hungary or also have one abroad; (dc) their habitual abode is in Hungary, if neither of the above settles it.
§ 7 point 44 of Act CL of 2017 on the Rules of Taxation (Art.) — Habitual abode in Hungary: at least 183 days of stay in a calendar year; days of arrival and departure count as full days.
§ 3 point 4(d) Szja tv. — Employment income is sourced where the work is normally performed: work done physically in Hungary (including remote work for a foreign employer) is Hungarian-source income.
Income-tax Act, 2025, s. 6(1)–(2) — Residential status is determined for each tax year. An individual is resident in India in a tax year if in India for 182 days or more in that year, or for 60 days or more in that year and 365 days or more in the four years preceding it.
Art. 15(2) India–Hungary DTAA; Art. 3(1)(j) («fiscal year») — Pay of a resident of one State for employment exercised in the other State is taxable only in the State of residence if (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned, (b) the employer is not a resident of the other State, and (c) the pay is not borne by a permanent establishment or a fixed base which the employer has in the other State. «Fiscal year»: for India, the financial year beginning on 1 April; for Hungary, the calendar year.
Art. 4(2) India–Hungary DTAA (2003) — Dual-resident individual: (a) resident of the State in which he has a permanent home available to him; if he has a permanent home in both States, of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, of the State in which he has an habitual abode; (c) habitual abode in both States or in neither — the State of which he is a national; (d) national of both or neither — the competent authorities settle the question by mutual agreement.
Income-tax Act, 2025, s. 159 — The Central Government may enter into agreements for relief from double taxation and avoidance of double taxation; where an agreement applies, the Act applies only to the extent more beneficial to the assessee (s. 159(4)). A non-resident may claim treaty relief only with a certificate of residence from the other country's government and the prescribed documents and information (s. 159(8)).
Art. 23 India–Hungary DTAA — Hungary (para. 1): (a) exempts from tax income that India may tax under the Convention, subject to (b); (b) for income under Arts. 10, 11 and 12 (dividends, interest, royalties and fees for technical services) allows a deduction equal to the Indian tax paid, capped at the Hungarian tax attributable to that income. India (para. 2): deduction from Indian tax of an amount equal to the Hungarian income tax paid, directly or by deduction at source, capped at the Indian tax attributable to the income that may be taxed in Hungary. Para. 3: exempt income may be taken into account in calculating tax on the remaining income.
Income-tax Rules, 2026, rule 76; Forms No. 44 and 45 — A resident gets credit for foreign tax in the tax year in which the income is taxed in India; credit is the lower of the Indian tax on that income and the foreign tax, per source and per country; not against interest, fees or penalties; disputed foreign tax only after settlement (Form No. 45, within 6 months of the month of settlement). Form No. 44 with a certificate of income and tax and proof of payment, within 12 months from the end of the tax year if the return was filed on time; accountant verification if foreign tax is ₹1,00,000 or more. Conversion at the TT buying rate.
§ 32(1) Szja tv. — Where a resident's consolidated tax base includes foreign-source income taxed in the source state, the Hungarian tax is reduced — unless a treaty provides otherwise — by 90% of the foreign tax paid, but not more than the Hungarian tax on that income. Without a treaty, foreign tax cannot be credited against tax on Hungarian-source income; refundable foreign tax does not count.
EPFO — Operating SSA: Hungary — India–Hungary social security agreement effective from 1 April 2013; employees posted by either country continue to contribute in the home country for postings of up to 60 months.
EPFO — Brochure on International Workers (17.08.2022), table of operational SSAs — Effective dates and maximum detachment periods: Hungary — 01.04.2013, 5 years; Czech Republic — 01.09.2014, 5 years. Italy, Spain and Poland are not in the table.
Ministry of External Affairs — Social Security Agreements (status list) — Agreements listed as active include Hungary and the Czech Republic; the agreement with Poland is listed as «Signed and Yet to enter into force». Italy and Spain are not listed.
Art. 4(2)(a) India–Hungary DTAA (2003) — Resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, resident of the State with which his personal and economic relations are closer (centre of vital interests).
Art. 4(2)(b) India–Hungary DTAA (2003) — If the centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, the individual is deemed a resident of the State in which he has an habitual abode.
Art. 4(2)(c)–(d) India–Hungary DTAA (2003) — Habitual abode in both States or in neither — resident of the State of which he is a national; national of both States or of neither — the competent authorities settle the question by mutual agreement.

Case law

Kúria (Supreme Court of Hungary), Kfv.I.35.493/2019/7, 30/04/2020 — A Vietnamese national with permanent-residence (letelepedett) status who had lived in Hungary with his family since 1989 was a Hungarian resident under § 3 point 2(c) Szja tv.; his family and economic ties confirmed this, so his reliance on Vietnamese residence under Art. 4 of the treaty was rejected (income tax case following an expenditure-vs-income audit).
Kúria (Supreme Court of Hungary), Kfv.I.35.013/2016/10, 16/06/2016 — A Georgian national living in Budapest since 2006 was held a Hungarian resident: the centre of vital interests is determined comprehensively by the closest family and economic ties (home, companies, employment contract, bank accounts and card use).
Kúria (Supreme Court of Hungary), Kfv.I.35.118/2020/4, 09/04/2020 — A person who claimed to live in Germany was held a Hungarian resident: closer economic ties are decisive for the centre of vital interests, above all where the person regularly uses bank accounts and cards.
Kúria (Supreme Court of Hungary), Kfv.VI.35.085/2017/12, 24/01/2018 — A foreign national with an immigration permit, a registered home in Budapest, and family, companies and accounts in Hungary was a resident with unlimited tax liability, because his closest personal, family and economic ties led to Hungary.

Updated 04/11/2026. The result is for information only and is not tax or legal advice. Tax authorities and courts may interpret the rules differently, including because of circumstances not covered here, and the law changes. Consult a qualified adviser before making decisions.

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