Hungary, Детальна інформація

Level of Taxable Income HUF

Rate Applicable to Level (%)

Up to 110,000 ---

100,001 - 150,000 20

150,001 - 220,000 25

220,001 - 380,000 35

380,001 - 550,000 40

Over 550,000 44



Source 1996 Deloitte & Touche LLP

The Hungarian Personal Income Tax (PIT) has several interesting features. The first feature that is unique is that all Hungarians are taxed separately. In other words, unlike the American Tax system where a family can jointly file the Hungarians prefer (for ideological reasons) to file individually. However, this system is not with out it's flaws. The problem that tax administers run into is when one spouse stays at home to look after the children. The reason for this difficulty is the one wage earner is subject to heavier taxation than two wage earners making the same total. Tax administrators however are reluctant to change the current system because of the administrative simplicity.

A second feature of the Hungarian Personal Income Tax (PIT) that draws attention to itself is the fact that any income earned through deposits and securities are tax free if the interest rates are lower than that of the National Bank of Hungary. According to D&T the National Bank of Hungary's interest rate in January was 25%. This means that all bank deposits that pay lower than 25% are tax free. However, If an individual were to make 28% on investment he/she would be subject to a 20% tax on the additional 3% (as shown in figure 1.2).

fig. 1.2

Initial Investment 100,000 HUF

Interest Paid on Investment

in Bank X (28%) 128,000 HUF

Interest Paid on Investment

National Bank (25%) 125,000 HUF

Taxable Interest Income 3,000 HUF

Taxes Due 600 HUF

This aspect of this tax allows for fair treatment to those who would otherwise lose their money putting it in accounts that could not stay up with the tremendous inflation that several countries in eastern Europe face due to their recent transition to a market economy (Newbery, 6).

As was true with the Value Added Taxes (VAT) the Personal Income Tax (PIT) also has exemptions. The following is a list of examples of items exempt from tax (Okno 2).

Social Security allowances

Gains of up to HUF 100,000 from the non commercial sale of moveable

property

Retirement gifts of up to HUF 10,000

Compensation of defined working clothes



In addition as of January 1995 tax credits against taxes owed were offered in several areas such as social security contributions by the employee, for individuals making under 500,000 HUF, for installments on loans for dwellings, charitable contributions, and for special savings accounts.

Corporate Income Tax