Online seminar about Financial Transactional Tax in Hungary

Dr. Oliver von Schweinitz, Schalast Partner and Head of the Tax Practice Group, together Kántor Balázs from Lakatos, Köves and Partners and Martin Walker from ADE Tax, gave an update on Financial Transactional Tax in Hungary in an online seminar.

The Financial Transactional Tax (FTT) was introduced by Act CXVI of 2012 and effective as of 1 January 2013. The Government Decree 197/2022. (VI.4.) on Extra Profit Taxes (the “Decree”) extended the scope of the FTT Act from 1 July 2022. The Decree was amended as of 19 July. These amendments can affect foreign service providers.

Now there are 3 Decree amendments. The first is about Extension to the purchase of financial assets:

• Applies to the purchase of financial assets with a Hungarian ISIN (issued by KELER Központi Értéktár Zrt, the Hungarian central depository). The FTT applies to both purchases to client account and own account.
• Applies not only to Hungarian service providers or Hungarian branches but cross-border service providers.
• The rate is 0.3% on the purchase price, capped at HUF 10,000 (EUR 25).

Financial assets include:

• transferable securities (e.g. equities)
• money-market instruments (e.g. bonds)
• securities issued by collective investment trusts

Certain transactions are excluded (such as options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities), ADR are out of scope.

The second Decree amendment includes Extension of the general rules to cross-border provision of payment services, granting of credit and loan, money exchange, mediating money-exchange services.