Hungary Import Tax

Hungary, a landlocked Central European country and a member of the European Union (EU), operates within the EU’s Common Customs Tariff (CCT) framework. This means that Hungary applies the same external tariff rates as all other EU member states for goods imported from non-EU countries. As a member of the EU Customs Union, Hungary benefits from duty-free trade within the EU and adopts harmonized tariff schedules for imports from non-EU countries. Hungary’s import tariffs are designed to regulate trade, protect domestic industries, ensure revenue generation, and provide a balance between local production and global market competition.

Custom Tariff Structure in Hungary

General Tariff Policy in Hungary

As an EU member state, Hungary follows the EU’s Common External Tariff (CET) for goods imported from non-EU countries. The CET is a system of tariffs applied uniformly across the EU, ensuring that products entering Hungary from non-EU countries are taxed similarly to other EU nations. Key aspects of Hungary’s tariff structure include:

• Zero tariffs for intra-EU trade: No customs duties are levied on goods traded between EU member states.
• Ad valorem tariffs: These are the most commonly applied tariffs, calculated as a percentage of the value of the goods.
• Preferential tariffs: Under the EU’s free trade agreements, goods from certain countries enjoy reduced or zero tariffs when imported into Hungary.
• Special import duties: Hungary, as part of the EU, may impose additional duties on products from specific countries to counteract unfair trade practices such as dumping or subsidies.

Preferential Tariff Agreements

Hungary benefits from several preferential trade agreements as part of the EU, which reduce or eliminate tariffs for goods imported from partner countries. These include:

• European Free Trade Association (EFTA): Reduced tariffs for goods traded between the EU and EFTA members (Iceland, Norway, Switzerland, and Liechtenstein).
• EU Free Trade Agreements: Hungary applies reduced or zero tariffs on imports from countries such as Canada (under CETA), Japan (under the EU-Japan Economic Partnership Agreement), and South Korea (under the EU-Korea FTA).
• Generalized Scheme of Preferences (GSP): Hungary offers preferential tariffs to certain developing countries under the GSP scheme, which includes reduced tariffs for agricultural products, textiles, and raw materials.
• Everything But Arms (EBA): As an EU member, Hungary grants duty-free access to all products (except arms and ammunition) from Least Developed Countries (LDCs).

Special Import Duties and Restrictions

In addition to the standard tariff rates, Hungary may impose special import duties on certain products imported from non-EU countries. These include:

• Antidumping duties: Applied to goods imported at below-market prices to prevent unfair competition with local products.
• Countervailing duties: Imposed to counteract subsidies provided by exporting countries that distort market competition.
• Environmental levies: Hungary, in line with EU policies, may impose additional taxes or restrictions on products deemed harmful to the environment, such as plastics or goods with high carbon emissions.

Product Categories and Corresponding Tariff Rates

Agricultural Products

1. Dairy Products

Dairy products are an essential part of Hungary’s import landscape, with a strong domestic dairy sector that the government seeks to protect.

• General tariff: Dairy products, including milk, cheese, and butter, are typically subject to tariffs of 10% to 20% when imported from non-EU countries.
• Preferential tariffs: Under free trade agreements with countries such as Canada and South Korea, dairy products may benefit from reduced or zero tariffs.
• Special duties: Antidumping duties may be applied to dairy products imported from countries where subsidies create unfair competition for local producers.

2. Meat and Poultry

Hungary imports various meat and poultry products, but the country maintains tariffs to protect local farmers and ensure food security.

• General tariff: Meat products, such as beef, pork, and poultry, face tariffs ranging from 12% to 30% when imported from non-EU countries. Higher tariffs are generally applied to processed meats.
• Preferential tariffs: Reduced or zero tariffs are available for meat imports from countries with which the EU has trade agreements, including Canada and Japan.
• Special duties: Hungary may apply import quotas and additional duties on specific meat products, particularly poultry, to protect domestic producers from unfair competition.

3. Fruits and Vegetables

Hungary is both a producer and importer of fruits and vegetables. Tariffs vary depending on the seasonality and type of produce.

• General tariff: Fresh fruits and vegetables imported from non-EU countries generally face tariffs ranging from 5% to 12%.
• Preferential tariffs: Countries with preferential trade agreements, such as Morocco and Tunisia, benefit from reduced tariffs for agricultural products under the Euro-Mediterranean Association Agreements.
• Special duties: Seasonal tariffs may be applied to protect local farmers during harvest periods for key crops such as apples, tomatoes, and cucumbers.

Industrial Goods

1. Automobiles and Auto Parts

Hungary has a strong automotive industry, and import tariffs on vehicles are structured to protect domestic production while promoting competition.

• General tariff: Imported vehicles from non-EU countries are subject to a 10% tariff. Auto parts face tariffs ranging from 3% to 5%.
• Preferential tariffs: Under free trade agreements with Japan and South Korea, automobiles and auto parts may benefit from reduced tariffs or duty-free access.
• Special duties: Hungary may impose additional environmental levies on high-emission vehicles to encourage the import of energy-efficient and eco-friendly cars.

2. Electronics and Consumer Goods

Consumer electronics, such as televisions, smartphones, and household appliances, are significant import categories for Hungary.

• General tariff: Electronics from non-EU countries generally face tariffs ranging from 5% to 14%, depending on the product category.
• Preferential tariffs: Reduced tariffs apply to electronics imported from countries with trade agreements, such as South Korea and Vietnam.
• Special duties: Hungary may impose environmental taxes on electronics with high energy consumption or those containing hazardous materials, aligning with EU environmental protection policies.

Textiles and Clothing

1. Apparel

Hungary imports a wide range of textiles and clothing, with tariffs applied to protect its growing textile industry.

• General tariff: Apparel from non-EU countries faces tariffs of 12% to 16%.
• Preferential tariffs: Under the GSP scheme, Hungary applies reduced tariffs on clothing imports from developing countries such as Bangladesh and Vietnam.
• Special duties: Antidumping duties may be applied to clothing imports from countries where low-cost production undermines the competitiveness of local textile manufacturers.

2. Footwear

Footwear is another key import category for Hungary, and tariffs are applied to support local production while ensuring access to affordable products for consumers.

• General tariff: Footwear imports are subject to tariffs of 10% to 17%, depending on the material and type of shoe.
• Preferential tariffs: Reduced tariffs apply to footwear imported from developing countries under the GSP scheme and countries with EU free trade agreements.
• Special duties: Additional duties may be imposed on low-cost footwear imports from countries involved in dumping or underpricing practices.

Raw Materials and Chemicals

1. Metal Products

Metal products are essential imports for Hungary’s construction and manufacturing industries. These imports face tariffs depending on the type of metal and its classification.

• General tariff: Metal products, including steel, aluminum, and copper, generally face tariffs ranging from 5% to 12%.
• Preferential tariffs: Reduced tariffs apply to metal imports from countries with which the EU has free trade agreements, such as South Korea and Canada.
• Special duties: Hungary may impose antidumping duties on metal imports from countries such as China and India where subsidies or market distortion practices harm local producers.

2. Chemical Products

Chemicals are critical imports for Hungary’s industrial and agricultural sectors, and tariffs on these products vary depending on their classification.

• General tariff: Chemical products, including fertilizers, industrial chemicals, and cleaning agents, face tariffs of 5% to 12%.
• Preferential tariffs: Reduced tariffs or duty-free access applies to chemicals imported from trade partners under free trade agreements.
• Special duties: Certain hazardous chemicals may be subject to additional restrictions or environmental levies due to their impact on public health and the environment.

Machinery and Equipment

1. Industrial Machinery

Hungary imports a variety of industrial machinery for its construction, manufacturing, and agricultural sectors. Tariffs on these products are relatively low to support economic development.

• General tariff: Industrial machinery from non-EU countries typically faces tariffs of 1% to 4%.
• Preferential tariffs: Reduced tariffs or duty-free access apply to industrial machinery imported from countries with free trade agreements, such as Japan and Canada.
• Special duties: Hungary may impose additional duties on machinery imports from countries where unfair trade practices are detected.

2. Medical Equipment

Medical equipment is crucial for Hungary’s healthcare system, and tariffs on these goods are kept low to ensure access to affordable healthcare products.

• General tariff: Medical equipment, including diagnostic tools, surgical instruments, and hospital supplies, typically faces tariffs of 0% to 5%.
• Preferential tariffs: Medical equipment from trade partners such as the United States and South Korea may benefit from reduced tariffs or duty-free access under free trade agreements.
• Special duties: Emergency tariff exemptions may be granted during health crises to ensure the availability of critical medical supplies.

Special Import Duties Based on Country of Origin

Import Duties on Products from Specific Countries

Hungary, as part of the EU, applies additional duties on products from specific countries when unfair trade practices are identified. Examples include:

• China: Hungary may impose antidumping duties on specific products from China, such as steel and electronics, if they are found to be sold at below-market prices or subsidized by the Chinese government.
• Russia: Following EU sanctions, specific imports from Russia, including energy products and luxury goods, face higher tariffs or restrictions due to political tensions.
• United States: Retaliatory tariffs may apply to certain U.S. goods in response to trade disputes between the EU and the United States, particularly in sectors such as agriculture and aerospace.

Tariff Preferences for Developing Countries

Hungary grants preferential tariffs to developing countries under several trade schemes, including:

• Generalized Scheme of Preferences (GSP): Reduced tariffs for agricultural goods, textiles, and raw materials imported from developing countries such as Bangladesh and Cambodia.
• Everything But Arms (EBA): Duty-free access to all products (except arms and ammunition) from Least Developed Countries (LDCs), including countries in Africa, Asia, and the Caribbean.

Essential Country Facts About Hungary

• Formal Name: Hungary (Magyarország)
• Capital City: Budapest
• Largest Cities:
  1. Budapest
  2. Debrecen
  3. Szeged
• Per Capita Income: USD 17,500 (as of 2023)
• Population: Approximately 9.6 million
• Official Language: Hungarian
• Currency: Hungarian Forint (HUF)
• Location: Central Europe, bordered by Austria to the west, Slovakia to the north, Ukraine to the northeast, Romania to the east, Serbia to the south, and Croatia and Slovenia to the southwest.

Geography, Economy, and Major Industries of Hungary

Geography of Hungary

Hungary is a landlocked country located in Central Europe, characterized by its flat to rolling plains, particularly the Great Hungarian Plain (Alföld) in the east. The country is bisected by the Danube River, which flows through the capital, Budapest. Hungary has a continental climate, with hot summers and cold winters, and its varied landscape includes the forested hills of the northern Uplands and fertile agricultural regions.

Economy of Hungary

Hungary has a mixed economy, with a strong industrial base, a growing services sector, and a well-established agricultural sector. The country is highly integrated into the EU’s economy and has benefited from foreign direct investment (FDI), particularly in the automotive, electronics, and manufacturing sectors. Hungary is known for its skilled workforce, favorable business environment, and strategic location within Central Europe, which makes it an important hub for trade and investment.

The Hungarian economy is export-oriented, with key trade partners in the European Union, particularly Germany, Austria, and Italy. Major export products include machinery, vehicles, pharmaceuticals, and food products. Hungary also has a significant tourism sector, attracting visitors with its historic cities, thermal spas, and natural landscapes.

Major Industries in Hungary

1. Automotive Manufacturing

The automotive industry is a cornerstone of Hungary’s economy, with major international manufacturers such as Audi, Mercedes-Benz, and Suzuki operating production plants in the country. The sector is supported by a network of local suppliers and contributes significantly to Hungary’s exports.

2. Electronics and Information Technology

Hungary is a key player in electronics manufacturing, producing components and finished products for global companies. The country also has a growing information technology sector, which includes software development and IT services.

3. Pharmaceuticals

Hungary has a well-established pharmaceutical industry, with companies such as Gedeon Richter and Egis playing significant roles in both domestic production and international exports. The sector benefits from a strong tradition of medical research and development.

4. Agriculture

Agriculture remains an important sector of Hungary’s economy, particularly in rural areas. The country produces a wide variety of crops, including wheat, corn, sunflowers, and grapes. Hungary is also known for its wine production, with regions such as Tokaj and Eger producing world-renowned wines.

5. Tourism

Tourism is a growing industry in Hungary, with visitors attracted to the country’s rich cultural heritage, historic architecture, and natural landscapes. Budapest, in particular, is a major tourist destination, known for its thermal baths, historic buildings, and vibrant nightlife.