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Tax Allowance For Mothers Raising Four or More Children

Tax Allowance For Mothers Raising Four or More Children

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As of 1 January 2020, a new tax allowance is available under the Hungarian Personal Income Tax Act, which provides for that mothers raising four or more children might be exempted from the payment of personal income tax.

Previously, the tax base of the personal income tax could be reduced with two tax allowances: the family tax allowance and the allowance for couples in their first marriage. As of the beginning of this year, a third tax allowance has been introduced: the allowance granted to mothers raising four or more children. According to the new provisions, persons eligible for this allowance might deduct certain incomes from their tax base calculated for the payment of personal income tax. In particular, salary received under employment contract might be deducted from the tax base.

According to a governmental press conference held in the beginning of 2020, the target of the Hungarian Government is to extend the personal income tax exemption also to mothers raising three children as of 1 January 2021. Currently this proposal is still under political discussion.

By Gabriella Galik, Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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