Mária Lakatos

Taxation in General: Hungarian Tax System

Non - consolidated income

Each tax system makes a distinction between income from assets and income from earnings. The distinction is applied because of the way in which the income is earned, since it is possible to obtain wage income at a very different cost than income from property. The risks are different.

Generally, non-consolidated income, especially property income, is taxed at a linear rate equal to the marginal tax rate on consolidated income, i.e., the highest tax rate.

In Hungary, separate taxable incomes have existed since the 1988 tax reform, although the classification of some incomes has changed. This group currently includes income from the sale of movable property, income from the sale of real estate or property rights, income from maintenance and annuity contracts, and capital income, such as foreign exchange gains on securities transactions, interests, dividend and income withdrawn from the enterprise.

The rules are as follows:

Sale of movable property: in the case of non-regular, business-like sales, the tax rate is generally 15 %, but no tax is payable if the income tax does not exceed HUF 30,000 or if the income does not exceed HUF 600,000 throughout the year.

The amount spent on the acquisition of movable property, the expenditure related to the sale, can be deducted from the income. If the cost of acquiring the movable property cannot be determined, then 25 % of the income shall be deemed as income with 15 % tax burden on that.

Here is an example for taxation of selling movable property.

4. Table. Example or computing tax of selling movable property

1.	Sale of movable property	800 ,000 HUF
2.	Residual value after lump sum 75% deduction	200 ,000 HUF
3.	Calculated tax (15%)	30 ,000 HUF
4.	Tax payable	0 HUF

Source: by own calculation

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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