According to the Civil Code, the management of the company is performed by the executive officer, who can do so under a mandate or employment relationship according to the agreement with the company; that is, the executive officer can perform their duties either as an employee or under a mandate. If a member of the company performs executive tasks under a mandate, that member is considered a self-employed person.
If the member carries out executive tasks either in an employment relationship or as a self-employed person, they will be deemed insured and will theoretically have to pay public charges based on the relationship.
If insurance relationships exist simultaneously in two countries, then according to Regulation 883/2004/EC of the European Parliament and Council, insurance coverage will only be established in one member state.
In the case of parallel employment activities, the A1 certificate issued by the health insurance provider specifies in which member state the insurance relationship is created. If the A1 certificate indicates that the insurance relationship exists abroad, then it does not need to be reported in Hungary on form T1041, and no contributions or social contribution taxes need to be paid in relation to the Hungarian employment. In this case, the social security contributions must be paid abroad.
In summary, if the executive is insured in another EU member state, they do not have to pay social security contributions in Hungary.
Please note that insurance relationships outside the EU are subject to different evaluations. If you have any questions regarding the above, please feel free to contact our colleagues.