Do I need to make a personal income tax return and when?
If you are resident in Hungary and you had income in Hungary during the year, then yes, you have to submit a tax return. The submission deadline: 20th May of next year.
What kind of incomes are taxable in Hungary?
Basically, all income is taxable you earned in Hungary during the year as a private person (there are some exceptions and limitations, but they are pretty specific).
The most common examples of incomes may occur:
- salary or wage (even the company has deducted the tax from your gross salary during the year, you have to submit your tax return together with the other income you might have and received from not a company)
- income from property rental
- income from property sale
- income from capital market operations, and securities trading
Is my income taxable in Hungary?
If your income is from Hungary, it is taxable in Hungary. Should you have any income from abroad, please contact your accountant to clarify it is taxable or not in Hungary.
Certain incomes are surely taxable in Hungary (eg. salary, income from property rental, because of the property location), but others like dividend and income from capital market operations, and securities trading depend on the double taxation treaty of the concerned countries (if there is any).
Income from property sale is always taxable in Hungary (because of the location), if you make the sale within 5 years from the purchase. You have the possibility to reduce the tax base with some expenses occurred in relation to the property, you just need to justify it with a VAT invoice. These expenses move on a large scale and can have serious effect on the tax, so it is strongly advised to contact your accountant and discuss it in order to calculate the most optimal tax.
Is it true that the Hungarian Tax Authority (NAV) prepares my tax return?
Yes, it is true. Based on the monthly payroll tax reports that companies submit during the year, the Tax Authority prepares your personal income tax return. If you had income only from a company, you do not have to do with this anything.
However, you had additional income gained during the year, you have to amend the tax return and fill out the necessary fields. The calculated tax has to be paid in the same time when you submit the tax return, or by 20th May the latest, what is the deadline to complete everything.
If you need any help preparing, amending or reviewing your personal income tax return, please do not hesitate to contact us, ProacTeam is happy to help you with this.