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Hungary - Digital Services Tax

Are there rules for taxing digital services

No (The European Commission's decision finding Hungarian advertisement tax incompatible with EU State aid rules has resulted in the rate of the advertisement tax of 0% between 1 July 2019 and 31 December 2022).

Applicable date

15/08/2014

Nature of tax

Indirect Tax.

Tax rate

The applicable tax rate is generally 7.5%. From the 1st of July 2019, the tax rate is 0%, which basically means that advertisers have no tax return filing, tax paying or statement providing obligation in Hungary. The tax rate of 0% is applicable until 31 December 2022)
An advertiser who ordered publication of the advertisement (excluding private individuals not recognized as private entrepreneurs under the personal income tax act) may instead be liable to tax at 5%. This is applicable only in special cases.

Affected business models/in-scope activities

(1) The following are liable to tax at the 7.5% rate, irrespective of their place of establishment:

a) media content providers established in Hungary according to the Media Act;

b) media service providers not covered by Paragraph a), who broadcast media content in Hungarian, accessible in the territory of Hungary, covering at least half of its daily transmission time;

c) publishers of press products not covered by Paragraph a);

d) any person or organization managing outdoor advertising media, and any means of transport, printed matter or real estate property designated for the dissemination of advertisements;

e) the publisher of advertising accessible on the internet (person or body having the right to control advertising space

(2) Advertisers (wherever established) who order publication of the advertisement (excluding private individuals not recognized as private entrepreneurs under the personal income tax act) may be subject to tax at a reduced rate of 5%. This is applicable only in special cases.

Revenue stream in scope

Tax on advertising (including online advertising).

In scope of tax treaties?

No.

Thresholds / de-minimis

HUF 100 million exemption for those subject to tax at 7.5%.

HUF 2.5 million non-taxable expenses for those subject to tax at 5%.

Deduction or credit for recipient (DST only)

N/A.

Exemptions

N/A.

Revenue or profits based tax

Revenue.

Revenue in scope

Revenues from sales / services to local businesses.

Revenues from sales/services to local consumers/users.

Revenues from sales / services to foreign businesses.

Revenue from sales / services to foreign consumers / users.
 

Who do these rules apply to

Resident individuals and companies.

Non-resident companies with or without a local PE.

Reporting / Compliance obligations

Through the advertisement tax return (called '94 return), registration may be required for non-resident taxpayers.

OECD membership

Yes.

As at

12/01/2020

BDO local resources BDO in Hungary

 

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