Double taxation conventions

This part provides information only on the special rules in effect in Hungary regarding double taxation.

Kulcsszavak: artist athlete trainer simplified social contribution EKHO

The double taxation conventions concluded by Hungary impose taxes on various income types, similar to the rules of conventions concluded by other EU Member States.

 

Hungary applies more advantageous taxation rules to private persons who conduct artistic or sports activities.

 

Special rules in Hungary applicable to the taxation of artists

 

1.) Simplified returns for and payment of personal income tax and social contribution tax

 

If performing artists (musician, singer, actor, puppeteer, dancer, circus or similar performer, extra, or a foreign crew member in a film) resident abroad carry out activities in Hungary as a result of which they obtain income from a foreign paying agent that may be taxed in Hungary under a double taxation convention, they may decide to fulfil the tax obligations for their income under the special rules in force in Hungary, if the applicable conditions are met.

Conditions for selection:

 

2.) Simplified social contribution

 

In the case of certain artistic activities (e.g. authors, journalists, performing artists, composers, musicians, singers, dancers, choreographers, actors, directors, cameramen, and producers), citizens of the Member States of the European Economic Area may decide to fulfil their tax payment obligations in Hungary under the rules of the simplified social contribution.

Conditions for selection:

 

The rules of simplified social contribution (EKHO) may be applied if

 

The basis of the simplified social contribution

The basis of EKHO is the income derived during the course of the specified activity. If the private person is obligated to pay value added tax, the amount thereof shall be deducted from the income.

 

Special rules in Hungary applicable to the taxation of athletes

 

Citizens of the Member States of the European Economic Area may decide to fulfil their tax payment obligations in Hungary under the rules of the simplified social contribution if they conduct any of the following activities:

 

Conditions for selection:

 

The rules of simplified social contribution may be applied if

the private person notifies the paying agent in writing of choosing the EKHO method of taxation.

A penalty of no more than HUF 200 000 may be imposed on a private person who defaults on the submission of the tax return.

A late penalty shall be payable for the late payment of the tax.

The calculator on the NTCA website can be used to calculate the penalty:

https://www.nav.gov.hu/nav/szolgaltatasok/kalkulatorok

Simplified returns for and payment of personal income tax and social contribution tax in the case of artists

The ’53INT return has to be used for personal income tax and social contribution tax:

The taxes have to be paid by this same time limit.

 

Simplified social contribution

Private persons have to submit an annual personal income tax return.

The deadline for submitting the return is 20 May of the year following the tax year.

Simplified returns for and payment of personal income tax and social contribution tax in the case of artists

The ’53INT return has to be used for personal income tax and social contribution tax.

 

Simplified social contribution

In their annual personal tax returns, private persons have to report the income that forms the basis of the EKHO and the amount of EKHO deducted. The reporting obligation can also be fulfilled by accepting the draft tax return compiled by the NTCA based on the data reported by the paying agent, or by submitting an ’SZJA return prepared by the private person.

Simplified returns for and payment of personal income tax and social contribution tax in the case of artists

The amount of income has to be determined without deducting any costs from revenue. However, the reimbursement paid for travel expenses and accommodation in connection with the performance of the activity shall not form part of income, thus also including the cost of travel and accommodation provided to the private person. The amount of income does not have to be calculated on the basis of revenue if the latter does not exceed HUF 200 thousand in any 12-month period.

 

Simplified social contribution

A person insured in an EEA Member State shall pay a 9.5 % social contribution tax for the income that forms the basis of the EKHO, and the paying agent shall be exempt from the EKHO payment obligation.

The paying agent is responsible for establishing and deducting the EKHO payable by the private person.

The EKHO paid substitutes personal income tax, which the private person will thus not be required to pay.

National Tax and Customs Administration

The list of double taxation conventions concluded by Hungary is available at the following link:

https://www.nav.gov.hu/nav/ado/szja -

Information for taxpayers on the double taxation conventions in force in Hungary from 1 January 2021

https://en.nav.gov.hu/taxation/double_taxation_treaties

NTCA hotline

+36 (1) 250-9500

 

 

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