Mária Lakatos

Taxation in General: Hungarian Tax System

V. Chapter. Certain defined benefits, fringe benefits (cafeteria), separate taxable income

Fringe benefits can be cash benefits and other forms of revenue - related benefits, vouchers, discounted purchases, etc. The Hungarian system is familiar with both types of benefits. The regulation has become more and more strict over the years, and it also shows certain features not found elsewhere. (For a long time, this was the only type of income where even social security contributions had to be paid after the tax paid by the employer, so the tax supplement was also realized.)

This benefit is always income that an individual receives as income without consideration.

The term fringe benefit does not mean the form in which the remuneration appears, but its purpose. Remuneration in kind and wages and salaries in kind are therefore not counted as fringe benefits or certain defined benefits. Although these incomes appear in kind, the item on the basis of which they were paid is wages.

The amount of the fringe benefit or certain defined benefit is fixed in the employment contract. Its value is the amount specified in the employment contract, failing the normal market value.

After the fringe benefit or after certain defined benefits, the taxpayer is liable to pay the tax, thus specifically extending the subjective scope of the Szja (Personal Income Tax Act).

First group: tax-free fringe benefits

This group includes nursery care service, kindergarten care, service up to the cost. Furthermore, any non-redeemable tickets for a sporting event, Zoo entrance tickets and tickets for cultural events may be covered up to the annual minimum wage.

Second group: taxation of non-wage benefits

For fringe benefits, only the employer pays social contribution (szocho) and tax. The maximum amount of HUF 450,000 per year for the accommodation sub-account, for the catering voucher sub-account, and for the leisure time benefit are considered to be fringe benefits as a general rule.

Thus, the employer will pay the 13 % social contribution (szocho) and the employer pays. 15% personal income tax (szja) after 01.

As of January 1, 2025, a new sub-account under the name Active Hungarians war created in the framework of second group, and employer can give an additional HUF 120,000 to the employee for sports purposes. In addition, for employees under the age of 35, HUF 150,000 per month and a maximum of HUF 1,800,000 per year can be paid for covering rental costs. In addition, half of the HUF 450,000 per year limit can also be used for home renovation.

Third group: certain defined benefits (Benefits among the taxes paid by payers)

This group includes revenues received in the former group that exceeds the value limit set there. From 2019, certain defined benefits include, for example, business meals for business travel, private use of a business mobile phone, a business policy gift and representation, a business gift or a small gift given once a year, or any benefit that although fringe, the benefit exceeds the maximum amount that can be given. However, we multiply the tax base by 1.18! After the amount thus multiplied, the employer must also pay the social contribution (szocho 13 %) and, of course, the 15 % personal income tax (szja). All together the effective rate is 33,04 after 1 January 2022.

We present the groups in summary, but the list is not exhaustive.

3. Table. Benefits in kind

I.	Tax-free fringe benefits	Limit	2022
1.	Tickets for a sporting event Tickets for a cultural event Tickets for Zoo	Up to the minimum wage	–
	Nursery care & service, kindergarten care & service	Up to the costs

II.	Non-wage benefits (paying 15 % effective personal income tax and 13 % effective social security tax)	General rule Amount available max HUF 200,000 / year / person Except for a Szechenyi leisure card (SZÉP kártya) maximum 450,000 HUF / person / year	28
1.	Szechenyi leisure card, including: Accommodation Catering vouchers Leisure services Active Hungarians For rental costs under 35 year old employees	450,000 HUF/year 120,000 HUF/year 1.800.000 HUF/year	28
III.	Certain defined benefits (Benefits with 17.7 % effective (szj)a PIT and 15,34 % effective social contribution tax (szocho)	no limit

3.	Use of business telephone for private purposes		15 (17,7) +13(15,34)
4.	Excess sum over limit limit of non-wage benefits	–	15 (17,7) +13(15,34)
5.	A gift of little value	up to 10 % of minimum wage	15 (17,7) +13(15,34)
6.	Representation, business gift	up to 25 % of minimum wage	15 (17,7) +13(15,34)

Source: NAV calculator and own calculations

Taxation in General: Hungarian Tax System

Tartalomjegyzék

Kiadó: Akadémiai Kiadó

Online megjelenés éve: 2022

ISBN: 978 963 664 137 5

Taxation is a scheme for the state to provide revenue. The so collected money could then cover the public spending of the government. These are the so-called allocative and redistributive functions of the state budget. Although, taxation theory discusses the various tax types and analyses the various taxation tools very extensively, there is no absolute answer to the question, when and what type of taxation system would be optimal. Thus this introductory book on taxation deals with the three basic types of taxes - the income tax, the VAT and the corporation tax - in a very pragmatic way. There are legal texts and cases from both the international and also from the relevant Hungarian practice.

This book is recommended not only for students of economics but also for law students and practitioners beside anyone who is interested in the basic regulations of taxation.

Hivatkozás: https://mersz.hu/lakatos-taxation-in-general-hungarian-tax-system//

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