National Tax and Customs Administration of Hungary - Guidelines, summaries on taxation

Guidelines, summaries on taxation

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<title>Information Note - How to fulfil social security contribution and social contribution tax payment obligations from 1 January 2020 for foreign businesses (undertakings) not required to register under Hungarian law</title>
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INFORMATION NOTE

How to fulfil social security contribution and social contribution tax payment 
obligations from 1 January 2020 for foreign businesses (undertakings) not required 
to register under Hungarian law?

This information note is for foreign businesses (employers) not required to register 
under Hungarian law which have employees

<ul>

<li>within the framework of a legal relationship subject to insurance obligation 
in the territory of Hungary or </li>

<li>outside the territory of Hungary who are subject to Act LXXX of 1997
<link anchor="_ftn1">
<text>[1]</text>
</link>
 on the basis of the regulation of the European Community on the coordination 
of social security systems or of a bilateral agreement on social security concluded 
by Hungary.</li>
</ul>

In the social insurance system natural persons shall also qualify as insured 
persons who perform their work for a foreign employer outside the territory of 
Hungary and are subject to the Hungarian social insurance system based on the 
regulation of the European Community on the coordination of social security systems 
or of a bilateral agreement on social security concluded by Hungary.

Foreign businesses not required to register under Hungarian law (hereinafter 
referred to as foreign businesses) shall perform any reporting, social contribution payment, social contribution tax payment 
and filing obligations related to a legal relationship involving an insurance 
obligation through a financial representative or a tax agent (hereinafter commonly 
referred to as representative), or in the lack of any representative, directly themselves.

If the foreign business concerned does not have a representative and has an employer 
who is ensured under Hungarian law, they shall, prior to the insurance period 
and the commencement of the employment, contact the National Tax and Customs Administration 
of Hungary (hereinafter: authority or NTCA) and request its registration by the 
authority as an employer.

I. Registration with NTCA

The foreign business shall meet its registration obligation by requesting a tax 
number by filling in and submitting form 20T201INT. The form may be found through 
a search function on the following page: http://www.nav.gov.hu " Nyomtatványkitöltő programok " Nyomtatványkitöltő programok " <a href="https://www.nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok">Egyszerű keresés/Összetett keresés</a>.

Via this form, the foreign business concerned can also inform the authority of 
the data of the person authorised to perform electronic administration on behalf 
of the foreign business.

If the foreign business employing an ensured person does not have a representative 
for meeting the tax and contribution obligations and, in addition, fails to register 
as an employer, it is the natural person employed by this foreign business who 
shall perform the reporting, social contribution payment, social contribution 
tax payment and filing obligations related to his/her insured status.

Whether or not the foreign business has registered with the authority as an employer 
can be enquired under the menu item “Databases, taxpayer query, other organisations” 
on the following link: <a href="http://nav.gov.hu/nav/adatbazisok/adatbleker/egyebszerv/egyeb_szervezetek_egyszeru">http://nav.gov.hu/nav/adatbazisok/adatbleker/egyebszerv/egyeb_szervezetek_egyszeru</a>

The employee is required to have a tax identification number which is necessary 
for – among others – the compliance with the obligations burdening the employer. 
Natural persons can request a tax identification number by submitting to the authority 
a form no. 20T34, prior to the registration of the employment or the performance 
of the contribution payment obligation. The form is available through the following 
link: <a href="http://nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok">http://nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok</a>.

II. Reporting ensured persons employed by foreign businesses with the authority

The commencement of the employee’s insurance obligation must be reported on the 
first day of the insurance period at the latest; the termination of the insurance 
or periods without work performance obligation or income subject to social security 
must be reported within 8 days. Form 20T1041INT, through which first reporting 
or change reporting can be made, may be downloaded from the following link:

<a href="http://nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok">http://nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok</a>.

III. Fulfilment of contribution payment obligation

Income belonging to the contribution base that is paid to an employee performing 
work for a foreign business within the framework of a legal relationship subject 
to insurance obligation, shall be subject to the payment of a pension contribution 
of 10 percentage, and a health insurance and labour market contribution of 8,5 
percentage, both to be assessed and withheld by the employer
<link anchor="_ftn2">
<text>[2]</text>
</link>
.

Pursuant to PIT
<link anchor="_ftn3">
<text>[3]</text>
</link>
, the following, among others, shall qualify as income belonging to the contribution 
base: the part of the income from employment or self-employment constituting the 
consolidated tax base considered for calculating the tax advance base or, lacking 
that, i.e. if the income is non-taxable in Hungary, the base salary specified 
in the employment contract or if the work is performed in the framework of another 
legal relationship established for labour, or on the basis of an employment contract 
under the effect of a foreign jurisdiction, the monthly fee specified in the contract.

It is thus 18.5% of the income belonging to the contribution base that is to 
be paid to cover pension, health insurance and unemployment benefits.

IV. Social contribution tax payment obligation

On the basis of Act LII of 2018 on Social Contribution Tax (hereinafter referred 
to as SCT) payers shall have, in accordance with their obligation to contribute 
to the financing of common societal needs, social contribution tax payment obligation.

Persons without a permanent residence, habitual residence or a seat in Hungary 
shall also qualify as payers (taxpayers) (hereinafter referred to as: foreign 
payers) if natural persons having a tax payment relationship with these payers, 
who are under rules and regulations pertaining to Hungarian social security legislation 
perform their work in Hungary or on the territory of any other Member State subject 
to the regulation of the European Community on the coordination of social security 
systems or of any other state subject to a bilateral agreement on social security 
concluded by Hungary.

If the foreign payer fails to meet their legal obligations, it is the natural 
persons having a legal relationship with the foreign payer that generates tax 
payment obligation who shall meet the related tax obligations.

Meeting the tax payment obligation

As a main rule, payers shall pay 17,5%, social contribution tax for the tax base 
but are granted the opportunity by the law to reduce the amount of the tax payable 
by the amount of the tax incentives they are entitled to.

The base of social contribution tax

Part of the revenue shall be qualified as the base of the social contribution 
tax, that is taxable under the PIT Act, from self-employment or employment relationship, 
allotted or paid by the payer to the natural person having a legal relationship 
with the payer that generates a taxation obligation, and that is considered under 
the provisions of the PIT Act for the calculation of the tax advance base.

In the lack of such remuneration (allotted income), i.e. if the income is not 
taxable in Hungary, the base of the social contribution tax shall be the base 
salary or other payment specified in an employment contract or other contract 
governing the employment relationship or other legal relationship that results 
in the obligation to pay tax.

The income that is paid (allotted) with respect to a period in which an insurance 
relation exists on the basis of the SSC irrespective of the time of payment (allotment) 
shall also be part of the tax base
<link anchor="_ftn4">
<text>[4]</text>
</link>
.

V. Filing a return (declaration) and payment

The declaration and data reporting obligation related to the insurance, contribution 
payment and social contribution tax payment obligations shall be performed electronically 
on a monthly basis, by the 12th day of the month following the subject month.

Form 2008INT to be used for filing declarations (returns) can be downloaded from 
the following link:

<a href="http://nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok">http://nav.gov.hu/nav/letoltesek/nyomtatvanykitolto_programok</a>.

When a foreign enterprise realizes a tax incentive deductible from social contribution 
tax, the tax return form 2008 is to be submitted instead of the 2008INT and all 
obligations related to the employee are to be indicated on that form. That is 
to say, besides the social contribution tax and the realizable tax incentive, 
the pension contribution, health insurance and labour market contribution to be 
deducted from the employee are also to be declared on the tax return form 2008.

Contribution payment shall be made in one lump sum to the account of NTCA called 
“Külföldi vállalkozásnál biztosítási kötelezettséggel járó jogviszonyban foglalkoztatott 
utáni járulék befizetések beszedési számla” (“For contributions for employees employed by foreign businesses in a legal relationship 
involving insurance obligation”) No. 10032000-06056456, while the social contribution tax shall be paid to the 
NTCA account “Szociális hozzájárulási adó beszedési számla” (“Social contribution tax account”) No. 10032000-06055912, on a monthly basis, by the 12th day of the month following 
the subject month, by transfer or bill payment. If the foreign enterprise realizes 
a tax incentive from the amount of the social contribution tax, the payment is 
not made in one single amount, but separately for each tax type in accordance 
with the contents of the return form 2008. For example, the pension contribution 
will be declared under the tax type code 291 on the return form 2008; and therefore, 
the payment must be made to the NTCA account “Nyugdíjbiztosítási Alapot megillető 
bevételek magánszemélyt, őstermelőt, egyéni vállalkozót, kifizetőt terhelő kötelezettség 
beszedési számla” (“For revenues due to the Pension Insurance Fund collected from private individuals, 
primary producers, private entrepreneurs and payers”).

If payment is made by bank transfer, please enter the tax identification number 
that you received when registering under the section “Notes to beneficiary” of 
the transfer order. This is necessary so as to ensure that the payment be duly 
credited to the account.

VI. Electronic administration

The declaration and data provision obligations related to the contribution and 
social contribution tax payment obligation shall be performed on the Government 
Portal (http://www.magyarorszag.hu/szuf).

So that you can file your declaration or provide data electronically you need 
to have prior registration. Registration must be performed by the private individual who will submit the declarations and the data to be provided to the authority. 
This private individual shall personally visit the organ entitled to carry out 
Client Gate registration, where, after presenting their personal identification 
document, filling in a Registration Data Sheet and providing a user name and an 
existing e-mail address, they shall be given an activation code for a single use.

Registration may be initiated personally be opened at any Metropolitan or County 
office of the Government Office (One Stop Shop of Government), county and Budapest 
districts at document offices, at the customer services of the Hungarian National 
Tax and Customs Administration, at the customer services of Magyar Posta Zrt. 
(Hungarian Post) as well as at the diplomatic and consular missions of Hungary, 
whereas in an electronic way, Client Gate may be opened only in the possession 
of a valid identity card issued after 1 January 2016.

National Tax and Customs Administration

<a name="_ftn1"></a>[1] Act LXXX of 1997 on the Eligibility for Social Security Benefits and Private 
Pensions and the Funding for These Services (SSC).

<a name="_ftn2"></a>[2] Subsection 1 of Section 56/A of SSC.

<a name="_ftn3"></a>[3] Act CXVII of 1995 on Personal Income Tax (hereinafter referred to as PIT).

<a name="_ftn4"></a>[4] Under special rules, allotments not directly related to employment (e.g. 
dividends) may also be regarded as the base of social contribution tax. In case 
of such a payment (allotment), please consult the authority for information on 
your exact liabilities.

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<article contentid="1835354">
<title>Tax exemption for the foreign traveller</title>
<url>taxation/taxinfo/VAT_foreign_traveller.html</url>
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VAT exemption on products sold to foreign travellers

Within the framework of export tax exemptions, the VAT Act, in line with the 
provisions of the VAT Directive
<link anchor="_ftn1">
<text>[1]</text>
</link>
, contains special rules for the exemption of the supply of goods, in relation 
to which a foreign traveller buys a product, which is transported from the territory 
of the European Community (hereinafter: Community)
<link anchor="_ftn2">
<text>[2]</text>
</link>
 as part of the personal luggage of the foreign traveller (Section 99 of the 
VAT Act lays down additional conditions relating to the applicability of the exemption 
set out under Subsection 1 of Section 98).

The following is a summary of the most important information regarding the VAT 
exemption of products sold to a foreign traveller.

<ul>

<li>Who is considered to be a foreign traveller?</li>

<li>What are the conditions for making a purchase?</li>

<li>What do you need to know about the tax refund application form?</li>

<li>For how long and how should the products concerned be exported from the territory 
of the Community?</li>

<li>What are the other conditions for tax exemption?</li>

<li>What do you need to know about personal and travel luggage?</li>

<li>How to claim tax exemption?</li>

<li>How to apply tax exemption in the framework of tax refund?</li>
</ul>

1. Who is considered to be a foreign traveller?

For the purposes of the VAT Act, foreign traveller
<link anchor="_ftn3">
<text>[3]</text>
</link>
 shall mean a natural person who is

<ul>

<li>

not a citizen of any Member State of the Community, and has no right of permanent 
residence in any Member State of the Community, furthermore, who 
</li>

<li>

a citizen of any Member State of the Community though, his/her permanent address 
is outside the territory of the Community. 
</li>
</ul>

With regard to the permanent address of the natural person, Point 11) of Section 
259 of the VAT Act and Articles 12-13 of the Implementing Regulation
<link anchor="_ftn4">
<text>[4]</text>
</link>
 must also be applied.

Point 11) of Section 259 of the VAT Act states that permanent residence shall 
mean the place of abode used for permanent habitation and with which the natural 
person has closer personal and economic ties (centre of vital interests), except 
if otherwise provided for by any binding legislation of the European Union.

Articles 12 and 13 of the Implementing Regulation provide as follows with respect 
to the permanent address and the habitual residence (where one usually resides):

“Article 12

For the application of Directive 2006/112/EC, the ‘permanent address’ of a natural 
person, whether or not a taxable person, shall be the address entered in the population 
or similar register, or the address indicated by that person to the relevant tax 
authorities, unless there is evidence that this address does not reflect reality.

Article 13

The place where a natural person ‘usually resides’, whether or not a taxable 
person, as referred to in Directive 2006/112/EC shall be the place where that 
natural person usually lives as a result of personal and occupational ties.

Where the occupational ties are in a country different from that of the personal 
ties, or where no occupational ties exist, the place of usual residence shall 
be determined by personal ties which show close links between the natural person 
and a place where he is living.”

2. What are the conditions for making a purchase?

<ul>

<li>

The total value of the consideration, including VAT, must be more than 175 euro 
or the equivalent in national currency.
<link anchor="_ftn5">
<text>[5]</text>
</link>
 The price of each product does not need to be higher than that amount, if the 
total price of the goods, stated on the same invoice is higher than EUR 175. In 
2020 the HUF amount of the limit expressed in EUR is calculated at the official 
HUF/EUR exchange rate published by the National Bank of Hungary (hereinafter NBH) 
on the first working day of October 2019, i.e. 1 October 2019, and the amount 
resulting from the conversion must be rounded to HUF 1000.
<link anchor="_ftn6">
<text>[6]</text>
</link>
 Consequently, in 2020 the limit in HUF is 59,000 Hungarian Forints.
</li>

<li>

The foreign traveller must be able to verify his legal status by producing a 
valid travel document or some other form of identification in the form of a document 
recognized by Hungary (hereinafter referred to collectively as “travel document”).
<link anchor="_ftn7">
<text>[7]</text>
</link>


</li>

<li>

The foreign traveller must ask for an invoice reflecting the supply of goods. 
The data of the identification of the foreign travellers on the invoice (and simplified 
invoice) and the VAT refund application form must be the same as the data contained 
in the travel documents of the foreign traveller.
<link anchor="_ftn8">
<text>[8]</text>
</link>


</li>

<li>

With a view to the implementation of exemption, the supplier of the goods fills 
out the VAT refund application form when so requested by the foreign traveller, 
of which two copies shall be handed to the foreign traveller, (the third shall 
be retained by the vendor).
<link anchor="_ftn9">
<text>[9]</text>
</link>


</li>
</ul>

3. What do you need to know about the tax refund application form?

The VAT refund application form must contain the following information:
<link anchor="_ftn10">
<text>[10]</text>
</link>

<ul>

<li>

name, address and tax number of the vendor; 
</li>

<li>

name and address of the foreign traveller (purchaser) and the number of his/her 
travel document (completed on the basis of the data contained therein);
</li>

<li>

number of the invoice made out on the supply of goods; 
</li>

<li>

total invoiced amount on the supply of goods, inclusive of VAT; 
</li>

<li>

a place where it can be signed and sealed in proof of exportation endorsed by 
the customs office of exit from the territory of the Community. 
</li>
</ul>

The VAT refund application form shall be printed in at least Hungarian, English, 
German, French and Russian languages, and shall be filled out in Hungarian, English, 
German or French languages.
<link anchor="_ftn11">
<text>[11]</text>
</link>
 A VAT refund application form is completed by the supplier of the goods, based 
on the data of the invoice or simplified invoice that certifies the purchase. 
One VAT refund application form may contain the data of one invoice only.
<link anchor="_ftn12">
<text>[12]</text>
</link>

A regular form provided or a form approved by the tax authority may be used as 
the VAT refund application form. The ‘VAT refund application form for foreign 
travellers’, introduced by the tax authority (i.e. VAT refund application form) 
and its completion guide may be obtained in large post offices and may be ordered 
to be delivered to any post office. If the vendor intends to use a VAT refund 
application form other than the form introduced by the tax authority, the form 
may be used, if it has previously been approved by the tax authority.
<link anchor="_ftn13">
<text>[13]</text>
</link>
 The VAT refund application form, used regularly by the vendor and approved by 
the tax authority must be available at the vendor.

4. For how long and how should the products concerned be exported from the territory 
of the Community?

The exemption may be applied to the supply of products or goods pursuant to Section 
99 of the VAT Act only if the customer exits the goods purchased in Hungary from 
the territory of the country, with the simultaneous presentation of the original 
copy of the invoice (or simplified invoice) to the customs authority, within 90 
days from purchase in his/her personal or travel luggage, and the customs office 
of exit from the Community certifies the exit by affixing its seal and endorsement 
on the VAT refund application.
<link anchor="_ftn14">
<text>[14]</text>
</link>
 The customs authority endorses the VAT refund application form only when the 
goods are transported to a country outside the European Union. Subsequent certification 
of exit on the tax refund application form may not take place. More than one VAT 
refund application forms may be endorsed in the course of one single customs procedure. 
(The customs authority shall withhold the second copy of the VAT refund application 
form, sealed and endorsed, from the foreign traveller.
<link anchor="_ftn15">
<text>[15]</text>
</link>
)

The VAT Act sets out as an additional condition for tax exemption with respect 
to the product that within the time limit of 90 days the goods supplied may not 
be used or consumed with the exception of sampling and trial production.
<link anchor="_ftn16">
<text>[16] </text>
</link>

5. What are the other conditions for tax exemption?

Even if other statutory conditions prevail, the supply of goods may be exempt 
from the tax pursuant to Section 99 of the VAT Act, only if the first copy of 
the VAT refund application form, certifying the exportation of the goods within 
the deadline, endorsed and sealed by the customs authority, is available at the 
vendor. In order to receive the tax refund, the foreign traveller (or his/her 
proxy) must return also his own copy of the invoice (or simplified invoice) to 
the vendor.
<link anchor="_ftn17">
<text>[17]</text>
</link>

6. What do you need to know about personal and travel luggage?

Given that the VAT Act does not define the concept of personal or travel luggage, 
nor is it defined in the VAT Directive or in the Implementing Regulation, the 
meaning of this term shall be construed in the light of its ordinary meaning. 
For the purposes of the ordinary meaning of the word, part of the luggage shall 
be considered to be a product which is supplied/exported on an occasional basis 
and which – due to the nature and quantity – is considered to be for private and/or 
personal use or for family purposes or for gift. In addition to this, it is also 
important that the procurement is of an occasional (ad hoc) nature and not of 
a commercial one.

The purpose of the tax exemption scheme for the supply of goods to a foreign 
traveller is to exempt goods carried (exported) in the course of passenger travel out of the Community and not, as a general rule, to exempt goods exported outside 
the Community. In Hungary, regarding export traffic, neither quantitative nor 
value thresholds/limits have been introduced in respect of goods exported by a 
foreign traveller, but based on the nature of the product and the overall circumstances 
of the case (e.g. regularity of the purchase, sequential delivery) certain cases 
may be excluded – according to the everyday interpretation of the meaning of personal 
or travel luggage – from the application of VAT exemption on the basis of Section 
99 of the VAT Act. Thus, no VAT exemption on the basis of Section 99 of the VAT 
Act may be granted, for example, in the case of a person – whose status is otherwise 
regarded as a foreign traveller – exporting a passenger car from Hungary outside 
the territory of the Community, given that the concept of personal and travel 
luggage and does not include a passenger car.

The following is important to be noted: the fact that tax exemption under Point 
b) of Subsection 1 of Section 98 and Section 99 of the VAT Act does not always 
apply to the export of goods during passenger traffic does not mean that the VAT 
exemption under Point a) of Subsection 1 of Section 98, that is to say, exports 
of goods in the classic sense, is not applicable.

This is true even if the buyer/purchaser is a non-taxable natural person who 
does not have a tax identification number (TIN), given that the buyer is not required 
to have a TIN to be exempt from tax on his/her sales outside the Community. However, 
in the majority of cases in the country of destination, that is to say, the country 
to which the product is shipped, this may result in the buyer having to pay import 
taxes or other public charges on the product in the country of destination. Thus, 
the supply of goods by a domestic taxable person is exempt from VAT but, depending 
on the rules of the country of destination, the customer/purchaser may be liable 
for payment of taxes or other charges.

The VAT Act states that tax exemption based on Subsection 1 of Section 98 shall 
not apply (thus such sales to a foreign traveller/passenger are not exempt either) 
in connection with goods transported by the customer himself/herself for the equipping, 
fuelling and provisioning of pleasure boats and private aircraft or any other 
means of transport for private use.
<link anchor="_ftn18">
<text>[18]</text>
</link>
 Under the meaning of that provision, for example, the sale of tires, other equipment 
and accessories purchased for a private car is also not exempt from VAT.

The Implementing Regulation sets out another important rule when it is stated 
that ‘Means of transport for private use’ as referred to in point (b) of Article 
146(1) of Directive 2006/112/EC [this is the provision on which Point b) of Subsection 
1 of Section 98 and Subsection 4 of Section 98 are based] shall include means 
of transport used for non-business purposes by persons other than natural persons, 
such as bodies governed by public law within the meaning of Article 13 of that 
Directive and associations.
<link anchor="_ftn19">
<text>[19]</text>
</link>

7. How to claim tax exemption?
<link anchor="_ftn20">
<text>
[20]
</text>
</link>

<ul>

<li>

The exemption may be applied indirectly, i.e. through the subsequent refund of 
the VAT charged to the foreign traveller. Foreign travellers may request the refund 
of the tax paid in relation to the supply of the goods from the vendor after the 
exportation of the goods, by submitting the documents required for the tax refund 
and supporting the lawfulness of the exemption. The vendor reports the VAT charged 
to the foreign travellers in the supply of goods as payable tax in the declaration 
for the tax assessment period that contains also the date of the supply of goods. 
The vendor may deduct the tax, refunded to the foreign traveller in his declaration 
prepared for the tax assessment period, during which the tax was refunded to the 
foreign traveller.
<link anchor="_ftn21">
<text>[21]</text>
</link>


</li>
</ul>

<ul>

<li>

Contrary to the above, the vendor may also decide, at his own risk, to sell the 
goods to the foreign traveller free of VAT (i.e. not to charge tax to the foreign 
traveller in the invoice issued for the supply of goods). Even in such cases the 
foreign traveller must present to the vendor the first copy of the VAT refund 
application form, endorsed and sealed by the customs authority. If, e.g., the 
vendor is unable to support the lawfulness of the exemption pursuant to Section 
99 of the VAT Act, and the transaction cannot be exempt of tax pursuant to the 
other requirements of the VAT Act either, it is advisable for the vendor to declare 
and pay the tax on the supply of goods in a self-revision of the tax assessment 
period, which includes also the date of the supply of goods. (The vendor may not 
apply exemption to any transaction pursuant to Section 99 of the VAT Act, if the 
VAT refund application form, endorsed and sealed by the customs authority is not 
available, or if the goods are exported over a period of 90 days.) 
</li>
</ul>

8. How to apply tax exemption in the framework of tax refund?

The foreign traveller may apply for VAT refund to the taxable person from whom 
the goods were purchased. In order to receive VAT refund, the first copy of the 
original VAT refund application form, endorsed by the competent customs authority, 
and the invoice issued by the vendor must be submitted to the supplier.
<link anchor="_ftn22">
<text>[22]</text>
</link>

Refund of VAT may be requested by a person acting in the name and behalf of the 
foreign traveller who presents a power of attorney made out in his/her name in 
writing by the foreign traveller. The proxy or representative of the foreign traveller 
shall hand over to the vendor power of attorney made out in his/her name in writing.
<link anchor="_ftn23">
<text>[23]</text>
</link>

The refund shall be paid to the foreign traveller in forints, in cash. However, 
the currency and the terms of payment may be altered subject to mutual consent 
by the vendor and the foreign traveller.
<link anchor="_ftn24">
<text>[24]</text>
</link>

It is the vendor’s responsibility to ensure, simultaneously with the tax refund, 
that the invoice (simplified invoice) made out on the supply of goods cannot be 
used for claiming any additional refund by affixing “VAT refunded” (“ÁFA elszámolva”) 
on the original copy of the invoice.
<link anchor="_ftn25">
<text>[25]</text>
</link>
 The supplier must make a photocopy of the document, which is no longer suitable 
for additional VAT refund prior to the return of the invoice (simplified invoice) 
to the foreign traveller, and shall keep that photocopy in his records.

The customs and other rules applicable to passenger traffic are available in 
details in Hungarian in the “Information for travellers” under the menu point 
“Publications” on the homepage of the National Tax and Customs Administration 
(<a href="http://www.nav.gov.hu">www.nav.gov.hu</a>).

National Tax and Customs Administration

<a name="_ftn1"></a>[1] Article 147 of Council Directive 2006/112/EC on the Common System of Value 
Added Tax.

<a name="_ftn2"></a>[2] Subsection 2 of Section 4, Point b) of Subsection 1 of Section 98 and Section 
99 of Act CXXVII of 2007 on Value Added Tax (hereinafter referred to as VAT Act).

<a name="_ftn3"></a>[3] Point 10) of Section 259 of the VAT Act.

<a name="_ftn4"></a>[4] Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying 
down implementing measures for Directive 2006/112/EC on the common system of value 
added tax.

<a name="_ftn5"></a>[5] Point a) of Subsection 1 of Section 99 of the VAT Act.

<a name="_ftn6"></a>[6] Subsections (1)-(2) of Section 256 of the VAT Act.

<a name="_ftn7"></a>[7] Point b) of Subsection 1 and Subsection 2 of 99 of the VAT Act.

<a name="_ftn8"></a>[8] Subsection 2 of 99 of the VAT Act.

<a name="_ftn9"></a>[9] Subsection 2 of 99 of the VAT Act.

<a name="_ftn10"></a>[10] Subsection 10 of Section 99 of the VAT Act.

<a name="_ftn11"></a>[11] Subsection 11 of Section 99 of the VAT Act.

<a name="_ftn12"></a>[12] Subsection 2 of Section 99 of the VAT Act.

<a name="_ftn13"></a>[13] [11] The approval of the form to be applied falls within the scope of competence 
of the Central Management of the National Tax and Customs Administration, Department 
of Matters of Specific Competence.

<a name="_ftn14"></a>[14] Point c) of Subsection 1 of Section 99 and Point a) of Subsection 2 of Section 
98 of the VAT Act.

<a name="_ftn15"></a>[15] Subsection 3 of Section 99 of the VAT Act.

<a name="_ftn16"></a>[16] Point b) of Subsection 2 of Section 98 of the VAT Act.

<a name="_ftn17"></a>[17] Subsection 6 of Section 99 of the VAT Act.

<a name="_ftn18"></a>[18] Subsection 4 of Section 98 of the VAT Act.

<a name="_ftn19"></a>[19] Article 47 of the Implementing Regulation.

<a name="_ftn20"></a>[20] Point b) of Subsection 4 of Section 99 of the VAT Act.

<a name="_ftn21"></a>[21] Subsection 9 of Section 99 of the VAT Act.

<a name="_ftn22"></a>[22] Subsection 6 of Section 99 of the VAT Act.

<a name="_ftn23"></a>[23] Point b) of Subsection 5 of Section 99 of the VAT Act.

<a name="_ftn24"></a>[24] Subsection 7 of Section 99 of the VAT Act.

<a name="_ftn25"></a>[25] Subsection 8 of Section 99 of the VAT Act.

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<article contentid="5393464">
<title>Information on the Immigration Surtax</title>
<url>taxation/taxinfo/Information_on_the_Im20180823.html</url>
<starttime>
<timestamp ms="1535029020000">
<year>2018</year>
<month>8</month>
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Information on the Immigration Surtax

The Act XLI of 2018 on Amending Certain Tax Laws and Other Related Laws as well as 
on Immigration Surtax (hereinafter referred to as IS Act) was published in the 117th edition of the Hungarian Official Gazette (Magyar Közlöny) on 25th July 2018, the regulations of which concerning the immigration surtax are effective 
as of 25th August 2018.

1. Object of the immigration surtax

Immigration surtax shall be paid on

<ul>

<li>
financial support of the Hungarian performance of the activity assisting the 
immigration or 
</li>

<li>
financial support of the operation of the organisation which performs activity 
assisting the immigration and having a seat in Hungary.</li>
</ul>

All program, action, activity, which directly or indirectly aims at promoting 
the immigration and takes place in the framework of

<ul>

<li>media campaigns, continuation of media seminars, and the participation in it;</li>

<li>education arrangement;</li>

<li>networking and operation of a network or</li>

<li>propaganda activity which shows the immigration in a positive light</li>
</ul>

is considered to be an activity assisting the immigration.

According to the IS Act, resettlement of people from their resident country - 
intended to be definitive - to another country is regarded as immigration.

When implementing the IS Act, cases described in Act I of 2007 on the Admission and Residence of Persons with the Right of Free 
Movement and Residence are not regarded as immigration.

According to Paragraph (1) of Section 1 of Act I of 2007, Hungary shall ensure 
the right of free movement and residence

<ul>

<li>

<a name="pr8"></a>with the exception of Hungarian citizens, to nationals of any Member State of 
the European Union and States who are parties to the Agreement on the European 
Economic Area, and to persons enjoying the same treatment as nationals of States 
who are parties to the Agreement on the European Economic Area by virtue of an 
agreement between the European Community and its Member States and a State that 
is not a party to the Agreement on the European Economic Area with respect to 
the right of free movement and residence (hereinafter referred to as "EEA nationals")

<li>to the family member of an EEA national who does not have Hungarian citizenship, 
accompanying or joining the EEA national (hereinafter referred to as "family members 
of EEA nationals")</li>

<li>

<a name="pr10"></a>to the family member of a Hungarian citizen who does not have Hungarian citizenship, 
accompanying or joining the Hungarian citizen (hereinafter referred to as "family 
members of Hungarian citizens") 
<a name="pr11"></a>
</li>

<li>to any persons accompanying or joining an EEA national or a Hungarian citizen, 
who: 
<a name="pr12"></a>
</li>

<ul>

<li>are dependants or members of the household of a Hungarian citizen for a period 
of at least one year, or who require the personal care of a Hungarian citizen 
due to serious health grounds, 
<a name="pr13"></a>
</li>

<li>had been dependants or members of the household of an EEA national in the country 
from which they are arriving, or who require the personal care of an EEA national 
due to serious health reasons,</li>
</ul>
</ul>

<a name="pr14"></a>and whose entry and residence has been authorized by the authority on grounds 
of family reunification.

2. Subject of the immigration surtax

The subject of the immigration surtax is the organisation which performs the financial support of the activity assisting the 
immigration, or the operation of an organisation carrying out an activity assisting 
the immigration and having a seat in Hungary.

The party, the party foundation, furthermore the organisation the exemption of 
which is provided by an international agreement or reciprocity is not considered 
as subject of the immigration surtax. As to whether reciprocity applies, shall 
be determined relying on the directive of the minister in charge of taxation issued 
in agreement with the minister in charge of foreign policies.

The subject of the immigration surtax is obliged to submit a declaration to the organisation carrying out an activity assisting the immigration and having 
a seat in Hungary until the 15th day of the month following the month when the financial support was provided 
about the fact that the immigration surtax was fully declared. The organisation 
carrying out an activity assisting the immigration and having a seat in Hungary 
shall submit this declaration until the 15th day of the month following the month when the declaration was received and at 
the same time the name, mailing address and other known identification data of 
the support provider as well as the amount of the support have to be communicated. 
The state tax authority issued the form “BEVKA” for the declaration, the usage 
of which is recommended for taxpayers.

If the state tax authority determines that the declaration is false, then it 
obliges in a resolution the taxable person providing the support to pay the undeclared 
tax and the tax surcharge which is 50% of it.

If organisation carrying out an activity assisting the immigration and having a 
seat in Hungary does not have the declaration until the 15th day of the month following the month when the support was used, then the subject 
of the immigration surtax – instead of the initially liable one – will be the organisation carrying out an activity assisting the immigration 
and having a seat in Hungary.

3. The base and rate of the immigration surtax

The base of the immigration surtax shall be the amount of the financial support provided for the activity assisting the immigration, or the operation of an 
organisation carrying out an activity assisting the immigration and having a seat 
in Hungary.

If the subject of the immigration surtax is the organisation itself carrying 
out an activity assisting the immigration and having a seat in Hungary, then the 
base of the immigration surtax shall be the cost incurred during the activity assisting immigration.

The rate of the immigration surtax shall be 25% of the base of the immigration surtax.

4. Rules concerning the assessment of the immigration surtax

The subject of the immigration surtax is obliged to assess – on a monthly basis 
–declare and pay the immigration surtax at the latest until the 15th day of the month following the month in which the provision of the support took 
place.

If the subject of the immigration surtax is the organisation carrying out an 
activity assisting the immigration and having a seat in Hungary, then it is obliged 
to assess – on a monthly basis – declare and pay the immigration surtax at the 
latest until the 15th day of the month following the month in which the financial support was used.

The immigration surtax shall be declared by using the form No. 1897 and transferred 
to the revenue account 10032000-01079139 (tax code 416).

It is the state tax and customs authority which performs the tax administration 
duties related to the immigration surtax.

Revenues collected through the immigration surtax belongs to the central budget 
and serves exclusively for covering tasks related to border protection.

National Tax and Customs Administration

</formatted-text>
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</article>
<article contentid="5377292">
<title>Information regarding the obligation to pay duties related to the purchase of immovable property</title>
<url>taxation/taxinfo/DUTYOFIMMOVABLEPROPERTY.html</url>
<starttime>
<timestamp ms="1500387300000">
<year>2017</year>
<month>7</month>
<day>18</day>
<dayofweek>3</dayofweek>
<hour>16</hour>
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<sec>0</sec>
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</lead>
<body>
<formatted-text>

Information regarding the obligation to pay duties related to the purchase of 
immovable property

When shall one pay duties?

In the event that the ownership of a real property (whether land or housing / residential property) is acquired in return for a 
purchase price, the party acquiring the real property (i.e. the purchaser) shall 
– as a general rule – pay duty on the onerous transfer of property.

Duty on the onerous transfer of property shall be paid on the acquisition of 
certain rights of pecuniary value related to real property, acquisition of property through the termination of such rights and the transfer 
of the exercise of usufruct enjoyed in respect of real property. In this context, 
right of pecuniary value means leasehold, usufruct or right of use – including 
the right of use of a holiday facility and of a time share accommodation – besides 
asset management.

Duty base, rate of duty

The general rate of the duty on onerous transfer of property is 4% of the market 
value of the property acquired, including encumbrances.

In the case of exchanging the ownership of real properties, except residential property and related rights, the basis of the duty is the 
market value of the real property acquired thereby.

In case the exchange of residential property, the base of the duty is the difference between the market values of the residential 
properties – without the additional liabilities.

In case the private individual owner sells or exchanges their residential property within the period before or after 
the year of purchase of their residence, the base of the duty is the difference between the market values of the purchased 
and the sold or exchanged residential properties – without the additional liabilities 
(It follows from the above that if a private individual sell their land property 
and intend to purchase a residential property from the proceeds therefrom, the 
above rule cannot be applied: this rule can exclusively be applied to the sale 
and purchase of residential properties).

If the private individual performs the exchange of several residential property or purchases 
and sells several residential properties within a year the establishment of the value difference serving as the base of duty payment 
may take the exchange or sale with the most favourable duty conditions into account 
instead of each and every sale and purchase of identical legal titles. If the 
private individual is unable to certify another exchange or sale of residential 
property conforming to the above conditions, the duty liabilities after the exchange 
and acquisition of residential property are established along the lines of the 
general rules.

It is important to note that in case a private individual exchanges or purchases a residential property and sells another property of theirs within the preceding or following year and 
if the market value of the acquired residential property is smaller than that 
of the exchanged or sold one, no duty payment is required.

If the private individual declares at the latest imposition of duty notification of buying a residential property within one year after the residential property purchase sells and calls for the state 
tax authority to ascertain the duty on acquisition of residential property according 
to the rules of purchase replacing change, then the state tax authority determines the market value of purchased residential 
property, and suspends the process without disclosing the decision.

When the private individual demonstrates that within a year of buying a residential 
property sold to another residential property, the suspended procedure shall be 
conducted, and establishes the amount of duty payable under the difference between 
the market value of the purchased and sold residential property.

In that case, however, if the private individual declares on intention of residential 
property’s sale as described above, and requests that under the rules of purchase 
replacing change should be applied for the establishing of the duty payable, however, 
does not justify the sale of the residential property within one year, then the state tax authority imposes additional fees calculated according to the rate of double the prevailing central bank base 
rate on the basis of market value purchased residential property from the submission 
date of private individual’s declaration.

In the event that the acquisition of property is based on a contract for support, life annuity 
or inheritance, the base of the duty is the market value of the property acquired.

In the case of usufruct recorded into the property register or use established concurrently 
with an onerous transfer of property, the party acquiring ownership pays a duty on onerous transfer of property as 
per the market value, reduced by the value of usufruct or use calculated in accordance 
with certain rules, while the usufructuary or user pays a duty corresponding to 
the calculated value of usufruct or use.

Duty exemptions and allowances applicable to the purchases of real property

Acquisition of the ownership (ownership share) of land property suitable for 
the construction of a residential building and the right of pecuniary value established 
on such real property is exempt from duty on onerous transfer of property if the party acquiring the 
property builds a residential building on such real property within 4 years of 
the date of submission of the contract for dutiable purposes, and if the net floor 
space of the residential suite(s) in the building is minimally 10% of the permissible 
building space fixed in the applicable general zoning plan. The party acquiring 
the property must notify the Tax Authority regarding his intention to build a 
residential building, until the date when the order concerning payment of the 
duty becomes definitive.

The purchase of a new residential property with a market value of HUF 15 million or less, built or developed by a business entity for the purpose of resale, and the purchase of a share in such property are exempt from duty on onerous 
transfer of property. If the market value of the new residential property is over 
HUF 15 million but below HUF 30 million, and if the buyer does not provide proof 
of the sale of another property, the applicable duty must be established as follows: 
First, the amount of the duty that would otherwise be paid on the total value 
of the housing unit must be established ( 4% of the market value), then the amount 
of the duty payable on HUF 15 million, calculated in accordance with the above 
method (i.e. HUF 600,000), must be subtracted from this amount. The sum that thus 
remains is the duty payable.

Payment relief: deferred payment and instalment payment with reference to the 
payment of duties

Deferred payment and payment instalment (hereinafter collectively referred to 
as “payment relief”) may be granted if the person obliged to pay duty cannot pay 
it in one lump sum until the fixed date.

Thus, payment reliefs can be granted if the payment difficulty

a) cannot be attributed to the applicant or if he has taken reasonable measures 
to prevent payment difficulty in a manner that can be expected in the given situation 
and, furthermore,

b) is of a temporary nature, that is, payment of the tax at a later time is likely.

In respect of private individuals, payment reliefs may be granted despite point 
a) if the applicant foresees or is able to provide some form of evidence demonstrating 
that payment of the tax at that very time or in a lump sum would constitute unreasonable 
hardship on his family, given his income and his financial and social circumstances.

There is no statutory regulation prescribing the number of instalments for which 
an application can be lodged.

The submission of an application is free of duties for natural persons – including 
private entrepreneurs here – but economic operators are obliged to pay a procedural 
duty of 10,000 HUF. According to the Act on the Rules of Taxation the procedure 
for automatic payment in instalments initiated by the trusted taxpayer at the 
state tax authority is exempted from duty. The form required for the submission 
of such an application can be downloaded from our Hungarian site (<a href="http://www.nav.gov.hu/">www.nav.gov.hu</a>) from the menu item “Letöltések-egyéb” / “Adatlapok, igazolások, meghatalmazásminták” 
/Adatlapok fizetési könnyítésre és/vagy mérséklé and, alternatively, the same 
form is available at any Customer Service Offices of the Hungarian Tax and Customs 
Administration (NTCA).

Upon the request of a private individual, the tax authority may reduce or cancel 
payable duty debts, penalties and surcharges of the individual if payment of such 
duties would seriously endanger the livelihood of the person obliged to pay such 
duties and that of his close relatives living in the same household. The tax administration 
may make any reduction contingent upon the payment of part (or all) of the unpaid 
debt.

Notification of the acquisition of property

Acquisition (termination) of ownership rights in real property, or a right of 
pecuniary value related to such real property must be reported to the real property 
supervisory authority for dutiable purposes by way of the submission (form ‘B400 
must be used for the announcement) of the pertinent contract (document). Reporting 
for dutiable purposes shall be effected by filling out the appropriate application 
form for registration in the real property register. In the event of failure to 
fulfil the reporting obligation in connection with the property acquisition, by 
providing such report in default of the 30-day deadline defined in a separate 
statutory regulation, or by providing an incomplete report, the subject of duty 
payment obligation is liable to pay a default penalty, in excess of the duty payable, 
which amounts up to HUF 200,000 in the case of private individuals, while in the 
case of other taxpayers it is HUF 500,000.

Tax authority sends an English language informative letter together with the 
resolution establishing duty payment obligation to the party acquiring the propety.

</formatted-text>
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<article contentid="5332670">
<title>Rules of Insurance Tax</title>
<url>taxation/taxinfo/rules_of_insurance_tax.html</url>
<starttime>
<timestamp ms="1488879180000">
<year>2017</year>
<month>3</month>
<day>7</day>
<dayofweek>3</dayofweek>
<hour>10</hour>
<minute>33</minute>
<sec>0</sec>
</timestamp>
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<formatted-text></formatted-text>
</lead>
<body>
<formatted-text>

Key Rules on Insurance Tax

2017

The Insurance Tax is a tax on
turnover imposed on the insurance industrythe rules of which are given in Act
CII of 2012 (hereinafter referred to as ‘the IT Act’). The revenue generated
from the tax shall be revenue for the central budget.

1 Subjects of the tax liability, taxable persons

The
provision of insurance services – under the IT Act, comprehensive insurance as
well as property and accident insurance – shall
be subject to tax if the location of risk<a href="http://navbelso.apeh.local/cms/sites/default/js/empty#_ftn1" name="_ftnref1" title="">[1]</a>
is in Hungary (Section 2 of the IT
Act).

Compulsory vehicle liability
insurance, health insurance<a href="http://navbelso.apeh.local/cms/sites/default/js/empty#_ftn2" name="_ftnref2" title="">[2]</a>
and agricultural insurance<a href="http://navbelso.apeh.local/cms/sites/default/js/empty#_ftn3" name="_ftnref3" title="">[3]</a>
shall not be subject to insurance tax.

<tbody>

<tr>

Comprehensive
 insurance<a href="http://navbelso.apeh.local/cms/sites/default/js/empty#_ftn4" name="_ftnref4" title="">[4]</a> 

</td>
<td valign="top" width="300">

Property and
 accident insurance<a href="http://navbelso.apeh.local/cms/sites/default/js/empty#_ftn5" name="_ftnref5" title="">[5]</a> 

</td>
</tr>

Comprehensive
 road vehicle insurance

(damage caused to road
 vehicles, non-engine driven land vehicles) 

</td>
<td width="300">

Accident
 insurance

(Including work-related accidents
 and illnesses) 

</td>
</tr>

<tr>

Comprehensive
 rail vehicle insurance

(any
 and all damage or loss occurred to rail vehicles) 

</td>
<td valign="top" width="300">

Cargo insurance

(including goods, items of
 luggage and any other items of property)<a href="http://navbelso.apeh.local/cms/sites/default/js/empty#_ftn6" name="_ftnref6" title="">[6]</a> 

</td>
</tr>

<tr>

Comprehensive
 aircraft insurance

(any and all damage or loss
 occurred to aircrafts) 

</td>
<td width="300">

Insurance against
 fire and natural disasters

(all property damage caused
 by fire, explosion, thunderstorm, other natural disasters other than
 thunderstorm, nuclear energy, landslides, ground subsidence, earthquakes) 

</td>
</tr>

<tr>

Comprehensive
 watercraft (used on sea, lakes or canals) insurance