Income Tax in Hungary

If France and Hungary have a tax treaty then that treaty would apply. If there is an EU level income tax agreement, then that would apply. If not either of those exist, then Hungary reserves the right to, and will, tax the worldwide income of all permanent residents.

Hm. Just remarked this is retirement income. Retirement income *might* be exempt from tax. Best to consult a Hungarian accountant to make sure.

Many thanks Kisallee for your 2 replies and very much appreciated. I agree with you to the fact better to contact a local accountant. Best regards.

Hello,
           Be very clear about this. Hungarian law will demand that you declare all your overseas earnings if you live more than 6 months of the year in Hungary,and you have a business in Hungary,or are earning rent money from a property,and have registered for self assessment. As long as you do not have a reason to register for tax self assessment, then you will not be liable for any tax whatsoever in Hungary.

Best of Luck,
                   Laird

- Normally (!) you would be "tax-resident" in that country where you spend "183 or more days per year".

- Normally (!) income from abroad would be taxed only when it is being "re-patriated" to the country of residence.

- The technical term is "Double Taxation Agreement" (DTA), which may or may not be in place between the countries of your concern.

- EU level = 28 countries = 29 banking systems = 30 tax regimes ...

Dont be fooled by the illusion that just because you have a pension from abroad that you have to automatically declare it. You do have to declare it when, or if you have to register for tax self assessment in Hungary. However you would only need to do this if you were either starting a business here or were receiving rental income,if you were considered residential status.

jurgen_in_bp wrote:

- The technical term is "Double Taxation Agreement" (DTA), which may or may not be in place between the countries of your concern.

- EU level = 28 countries = 29 banking systems = 30 tax regimes ...

For my past sins, I know something about this.....

All the EU countries use the OECD model for taxation and the double taxation agreements.  Every reciprocal agreement is based around that.  They usually just set the rates to try and even up between states.  The question of residence for tax purposes is diabolically complicated. There's a series of tests like where you spend your time, your family ties, passport/nationality, permits in your passport,  property available for your use etc etc.  One way or the other, one would fall into one of these tests.  The way to not be resident is to simply not live in the target country, not maintain any fixed goods or assets there and to keep your family travelling with you. Not so practical.  But failing that, never spend more than 90 days in any 180 day period in the target country.  On the basis of self-certification, unless you actually tell the tax authorities or they investigate, they will not really know for certain if you are in country or not, particularly if passing a Schengen border. However, the onus is on the taxpayer to prove the negative and unfortunately the tax authorities have very wide ranging powers to obtain information from other sources.  And of course, they can be (and often are) impossible to negotiate with.  What they really want is the tax, not the prosecution or punishment. They want people to pay up.  Yet, despite coming to arrangements, many people are publicised for their "wrong doing" which supposedly serves as a disincentive for others to take the non-compliant path.  They end up doing the "perp walk". Pavarotti, Steffi Graff's father, Al Capone etc etc all good examples.

I found this http://en.nav.gov.hu/taxation/taxinfo/s … n+taxation

"2.1. Tax-exempt income

Tax-exempt benefits are listed mainly in Article 7 and Appendix 1 of PIT. Among others, such benefits include:

some forms of state support for fostering and raising a minor;
scholarships paid by non residents to students studying in a foreign educational institution or researchers working abroad;
certain services of the insurance companies;
pension. "

My husband will get a pension in few years and he has trying to figure this out. He called the tax office but the persons there could not help him with this. My English is not so good but if this is correct it looks very clear to me.

Be careful. The pensions issue is not as delicious as at first sight. UK and Hungary have a dual taxation agreement as do most other countries. UK reserve the right to tax certain Uk generated pensions in UK, and other sources besides like property rents. It is not easiest document to read, but it is accessible on the internet. It's one reason why I am still taxed in UK, postponing annuitising. + of course I don't like the idea of funding many of the scary aspects of the Fidesc party programme.

Ålesundsandra wrote:

My husband will get a pension in few years and he has trying to figure this out. He called the tax office but the persons there could not help him with this. My English is not so good but if this is correct it looks very clear to me.

Might seem clear to you BUT....I wouldn't take what it says written somewhere as the truth as it applies to your situation.  Only way for sure is to consult a tax lawyer in Hungary.

It's a general rule that tax offices (anywhere) never give definitive advice over the phone.  I would strongly recommend getting any tax office rulings or decisions about your personal situation in WRITING with the confirming rubber stamps.

I don´t know about dual tax agreement with Norway and Hungary but if Hungary will have to right to tax it will be 0%? I will ask my husband about this later on today.

Ok I will tell my husband to contact a tax consultant in Hungary.

Sorry. You will only get details of the UK / Hungary dual taxation agreement off the UK government website. BUT there will be one for Norway / Hungary. It is a matter of searching. That will be the definitive advice. My own experience with tax consultants is that they fight shy of cross border questions because they invariably need to do homework to give the accurate answer you are requiring.

davidpearce wrote:

.... My own experience with tax consultants is that they fight shy of cross border questions because they invariably need to do homework to give the accurate answer you are requiring.

Sure,  and it's all based on what the client tells them.

Of course they are only giving an opinion and they don't have to bear responsibility as tax is entirely down to the individual as the individual signs the form. 

At the end of the day, getting the rubber stamped decision closes the matter and that's one thing the tax lawyer can take care of - getting the proper answer out of the tax authorities.

fluffy2560 wrote:

I would strongly recommend getting any tax office rulings or decisions about your personal situation in WRITING with the confirming rubber stamps.

I agree.

Even it the advise they give is wrong, but in your favor, if it is writing and stamped, it is golden, and is almost impossible to reverse.

klsallee wrote:

....Even it the advice they give is wrong, but in your favour, if it is writing and stamped, it is golden, and is almost impossible to reverse.

Absolutely.  Napoleonic code.

They cannot usually contradict themselves or more specifically they do not want to appear to be wrong.