From 1 January 2011, Hungary will have a flat rate personal income tax system with a 16 percent flat-rate personal income tax.

The change is aimed at improving the competitiveness of the Hungarian tax system, and is a crucial step towards the creation of a new economic system in the country. However, the new personal income tax system is not only new because it applies a flat tax: it will also create family-friendly taxation with tax credits for each child, reducing the tax liabilities of families with children. The new system also makes taxation much less complicated. We are witnessing the creation of the simplest tax system in the European Union and its acceptance will be yet another Hungarian speciality, a ‘new Hungaricum’.

You can find more details in the attached document.