Intra-corporate transfer (ICT): How to transfer employees to Hungary?

Some managers and experts are irreplaceable in a corporation. Their expertise may be needed when you are setting up a new entity in a foreign country, or when you are launching a new project at your foreign subsidiary. In these cases, you can send these precious employees on a temporary deputation.

Third-country employees at your Hungarian company

People who are not citizens of the EU may start working at a Hungarian company once they have received a work permit. However, there is a specific kind of work permit available to your employees if two main conditions apply:

  • There is a close connection between the Hungarian and the foreign company – for example, the Hungarian company is a subsidiary of the company outside the EU or both companies belong to the same organization. 
  • The transfer of the employee is necessary for a limited time.

In this case, the employee may apply for an Intra Corporate Transfer permit, which has certain advantages compared to the regular work permit.

What are the advantages of the Intra Corporate Transfer permit?

As opposed to a standard work permit, employees holding an ICT permit remain officially employed by the non-EU entity. They are kept on payroll and continue to be insured in their home country. In many cases this might be appealing to the posted workers as well as to the posting company. 

When it comes to taxation, if the transferee spends more than 183 days in Hungary, their income will be subject to Hungarian income tax (15%). However, the relevant Double Taxation Treaty should be examined to determine the right course of action to avoid paying taxes twice. 

What are the requirements and limitations?

  1. An employee is eligible if they have at least 3 months of employment history with the sending entity before starting the assignment in Hungary.
  2. The posted worker must prove that they are qualified to hold the position at the Hungarian organization by presenting the official translation of an appropriate certificate.
  3. The ICT permit is valid for three years at most. It cannot be extended after this period.
  4. The salary of the employee should be in line with Hungarian market salaries.
  5. Since the ICT permit is always a temporary one, the time spent in Hungary with it does not count for an application for the permanent Hungarian residence permit (which requires 3 years of continuous Hungarian residency).

Need some help?

If you already have a project in mind, let us help you asses your needs. Fill out our short survey to see if your employees are eligible for the intra corporate transfer permit, or they will need a work permit. At the end of the test you will have an option for requesting consultancy. Whatever the result, we will be happy to assist you and your employees with the application procedure.

Take the test now, or contact us through the form here.