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A magántőkealapok előnyei Magyarországon

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A magántőkealapok hazánkban kevésbé ismert vagyongazdálkodási formák, amelyeknek elsődleges célja, hogy a rájuk bízott vagyonból vállalkozásokba fektessenek, nem ritkán fel is vásárolva azokat. Magánszemélyek és intézményi befektetők is használják befektetői céljaik megvalósítására, de a megoldás egyik legnagyobb előnye a tulajdonosokat elrejtő teljes diszkréció. Cikkünkben bemutatjuk a magántőkealapok nyújtotta lehetőségeket Magyarországon.

Mi a magántőkealap?

A tőkealapoknak két fő típusát ismerjük: a kockázati és a magántőkealapokat. Ez utóbbi megértéséhez érdemes onnan közelíteni, hogy miért is szükséges egyáltalán egy tőkealap létrehozása. A cikkünkben később részletesen is foglalkozunk azzal, hogy milyen okokból érdemes magántőkealapot létrehozni, de a fő cél egyértelműen az, hogy a pénzeszköz elkülönítve, egyfajta önálló jogi személyként jelenjen meg egy invesztíciós folyamatban.

Jogosan merül fel a kérdés, hogy ennek mi értelme, hiszen magánszemélyként vagy cégként is befektethetünk. Igen, megtehetjük, sőt sokszor ez az egyszerűbb és könnyebben járható út. Ugyanakkor lehetnek olyan érvek a befektetés, amely esetünkben üzletrészvásárlást jelent, elkülönítése mellett, amelyek értelmet adnak a tőkealapoknak – adózás, transzparencia, vagy éppen az adott tranzakció körüli diszkréció megteremtése.

A tőkealapok között egyértelműen a kockázati típus az ismertebb (főként a Magyarországon is méltán virágzó startup-kultúra miatt), melyet elsősorban több, kisebb összeg befektetésére hoznak létre. A magántőkealapot ezzel szemben közepes vagy nagyméretű társaságok részben vagy egészében való felvásárlására szokás létrehozni, azzal az egyértelmű előnnyel, hogy annak tulajdonosait nem kötelező nyilvánosságra hozni.

Ki hozhat létre magántőkealapot? Mikor érdemes ezt alkalmazni?

Az USA-ban, ahol már a 80-as évektől kezdve igen népszerű volt ez a befektetési forma, jellemzően csak akkreditált befektetők hozhatnak létre magántőkealapot. Hazánkban az Európai Unió által kijelölt megnevezés az irányadó: magántőkealapot csak alternatív befektetési alapkezelők, azaz ABAK-ok hozhatnak létre. A létrehozáskor az alapkezelő befektetési jegyeket bocsát ki, amelyet a magántőkealap befektetői vesznek át.

Ahogy a fentiekben említettük, a magántőkealap alkalmazásának legfőbb előnye a titoktartás, emellett adózási előnyöket is biztosít.

Mit kell tudni a magántőkealapok működéséről?

A magántőkealap egy alternatív befektetési alap, amely önálló jogi személyiséggel rendelkezik. Létrehozásának elsődleges célja, hogy az értékpapírjait birtokló befektetők céljainak megfelelő befektetést tegyenek – vállalatrészek megszerzése vagy teljes felvásárlás formájában.

Az alapot csak alternatív befektetési alapkezelők (ABAK-ok) hozhatják létre, értékpapírjait pedig jellemzően zárt körben értékesítik. A befektetési jegyeket jellemzően 180.000 eurótól szokás értékesíteni, a teljes alap létrehozásához szükséges minimum tőke pedig 700.000 euró (a cikk írásának napján ez nagyságrendileg 250 millió forintot jelent).

Milyen előnyei vannak a magántőkealapoknak?

Ezt a kérdést két oldalról is érdemes megvizsgálni, hiszen egyrészt izgalmas kérdés, hogy magánbefektetőként milyen előnyöket élvezhetünk, de hasonlóan felmerül, hogy miért érheti meg egy-egy cégnek, hogy magántőkealapokon keresztül fektessen be.

A cégek számára különösebb jogismeret nélkül látható előnyöket kínál egy magántőkealap befektetése:

  • Egy tőkealap-jellegű befektetést nem kell visszafizetni, mint egy bankhitelt, így nem terheli meg a céges cash flowt.
  • A magántőkealap befektetése egyértelműen a cég erősítésére irányul, hiszen a befektető csak úgy “jöhet ki jól” az ügyletből, ha növeli a profittermelő képességet vagy a cégértéket (ez a kettő jellemzően azért kéz a kézben szokott járni).

Intézményi és magánszemély befektetők számára a magántőkealapok a következő előnyöket kínálják:

  • A magántőkealap struktúrája, tagjai és kedvezményezettjei teljes mértékben a befektetők igényei szerint alakíthatóak ki.
  • Hosszútávú befektetési lehetőség: a törvény legalább 6 éves működési időt ír elő, amelynek azonban felső korlátja nincsen.
  • A magántőkealapok számára az Európai Unió harmonizálta a jogi környezetet, így minden tagországban hasonló szabályok szerint létesíthető ilyen struktúra.
  • A magántőkealap önálló jogi személy, csak az alapkezelő tartozik teljes felelősséggel a működéséért. Ő természetesen érthető okkal, hiszen a jogalkotó arra szeretné ösztönözni, hogy a jogi háttér is támogassa ezt a valóban bizalmi pozíciót.

Milyen adózási előnyei vannak a magántőkealapoknak?

A magántőkealapok által kínált adózási előny a legegyszerűbben úgy írható le, hogy addig nem szükséges adót fizetni, amíg pozitív hozamot nem realizál a befektető. Az első és legfontosabb, hogy a magántőkealapba való befizetés teljesen adó- és járulékmentes, ha nem értünk el vele kimutatható nyereséget, akkor a megszüntetéskor a kifizetés is az.

A magántőkealapok sem TAO-t, sem pedig helyi adót nem fizetnek.

A magántőkealapok pozitív hozama osztaléknak minősül, amely után a világszinten alacsonynak számító 15%-os személyi jövedelemadót kell megfizetni (felső korlát nélkül), illetve egy 18,5%-os mértékű szociális hozzájárulási adót (felső korlátja a mindenkori minimálbér 24-szerese, a cikk írásakor ez 4.800.000 forint).

A magántőkealapok akkor kínálnak igazi adóelőnyöket, ha hozamunkat újra és újra befektetjük, kihasználva a struktúra hosszútávú lehetőségeit.

Kérdések

  1. Mi a magántőkealap? A magántőkealap egy olyan alternatív befektetési alap, amely önálló jogi személyként hozható létre. A befektetési jegyeket jellemzően zárt körnek kínálják.
  2. Hogyan biztosítja a magántőkealap a diszkréciót? A magántőkealap Magyarországon nem része a tényleges tulajdonosi regiszternek, azaz a tényleges tulajdonost nem kötelező bejelenteni az alapításkor és a működés kapcsán.
  3. Milyen adózási előnyöket kínál a magántőkealap? A magántőkealapokba irányuló befizetések teljesen adómentesek, pozitív hozam kivétele esetén a magánszemélyek osztalékként adóznak (15% személyi jövedelemadó és 18,5% szocho megfizetésével).

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1. The concept of the trust in the new Hungarian Civil Code

Twenty-five years after the collapse of the socialist system in Hungary and joining the market economy system again, both the legislature power and experts agreed that Hungary must provide a legal solution in helping long-term family wealth preservation and estate planning in Hungary. Earlier, during the soviet occupation, the importance of the private wealth was marginal but from 1989 privatization created a dramatic change in private wealth. Nevertheless, neither the legislature power, nor professionals realized in time that the lack of local estate planning solutions would create a massive capital outward flow from Hungary. This tendency resulted in the ‘90’s offshore spree and created an unhealthy environment where the focus was on the agressive tax planning.

The Civil Code regulates the trust (in Hungarian: ‘bizalmi vagyonkezelési szerződés’) among the mandate-type contracts. The concept of this new type of legal instrument was drawn up on the basis of the English trust model. Although the Hungarian law is influenced by the German law, this legal framework is far from the rules of the German Treuhand but very English. Strong, current demand in the economy was postulated the introduction of trust on a legislative level . Since the transition, Hungarian investors have chosen legal regimes of other countries because the institution of the trust provided them with a better legal and economic solution. The Chief Codification Committee of the Civil Code implemented the trust into the contract law chapter emphasising; however, the decisive element of the instrument is the transfer of ownership, which is based on the trust-like model. Under the rules of the Civil Code, the trust is an in personam legal instrument that implicitly carries substantial in rem effects. The framework’s general concept is that the trust is a contractual arrangement between the settlor and the trustee and its validity is bound to a written contract or statement. It derives from this concept that the central figures of the trust are the settlor and the trustee and this conceptual emphasis goes through the supplementary rules, as well. The supplementary rules including several details of the licensed trustee activity are regulated in two separate pieces of legislation. Such details are regulated in Act XV of 2014 on Trustees and the Regulation of Their Activity , and in Government Decree No 87/2014 (III. 20.) on certain rules concerning the financial security of trustees’ undertakings.

2. General rules of the trust

Pursuant to Section 6:310(1) of the Civil Code, under the trust the trustee must manage the assets transferred into the trustee’s ownership by the settlor for the benefit of the beneficiary, for which the settlor is obliged to pay a fee. The trust assets may be tangible or intangible assets, rights and claims as well. From this general definition derives three determinative elements of the trust: for the creation of trust it is necessary to transfer the ownership of the asset from the settlor to the trustee; the trustee acts for the benefit of the beneficiary; therefore, the framework requires at least one beneficiary; nevertheless, the settlor remains the contracting party, consequently, the rights to modify or terminate the relationship remains in the settlor.

It must be noted first of all that the Trust Section’s rules are mainly dispositive; therefore, the settlor may differ from the rules with the exception of a few obligatory rules (any deviation is null and void). The obligatory rules are:

  • The trust arrangement must be in writing;
  • The trustee can’t be the sole beneficiary;
  • The trust assets must be separated from the trustee’s own assets and other trust assets;
  • The settlor and the beneficiary can’t instruct the trustee;
  • The trust period cannot last longer than 50 years.

The above mentioned rules mean as well that the settlor has large extend of freedom to specify the content of the trust relationship, apply protector or other advisors, like investment board.

It is allowed to create several types of trust including testamentary or inter vivos, discretionary or non-discretionary. The purpose trust is not regulated as a typical legal arrangement, but with using appropriate schemes, a legal arrangement that resembles the English private or charity trust may also be achieved. The general concept of the trust framework is the revocable trust. It is controversial, whether it is possible to create an irrevocable trust, as the settlor may terminate the trust arrangement and this right may be limited but not excluded.

If the settlor and the trustee are one and the same person, the trust must be established by an irrevocable unilateral declaration of the settlor in a public instrument. A legal relationship of the trust settled by last will and testament is valid if the trustee accepts of his appointment to such position, under the terms set out in the testament. In the case of creating a trust by unilateral legal statement, which must be done in a public instrument, the same rules must be applied as mentioned above.

3. Rights of the settlor

The rights of the settlor extend to the appointment of the trustee, the determination of the transferred assets, the designation of the beneficiary, and the condition or time to become beneficiary. These rules are very similar to the three certainties principle in the Anglo-Saxon law. This, however, is a bilateral legal act, as it also requires the acceptance of the appointed trustee. Although the settlor defines the trust’s character, in practice the creation of the trust requires the involvement of the appointed trustee and its consent. Without clear determination of the asset management rules in the trust deed, the Civil Code’s general rule applicable that the trustee must act for the utmost benefit of the beneficiary. This rule is the governing element of the whole relationship and all and every condition of the trust deed must be examined and fulfil for the utmost benefit of the beneficiary. The settlor may determine other conditions of the trust as well, such as its duration, which is maximum 50 years, terms, the right of unilateral termination, remuneration of the trustee, appointment of additional trustees, regulation of the delegation of other contributors (for example a protector) and the beneficiary’s right for distribution. The settlor may reserve the right to remove the trustee, appoint a new trustee, replace the beneficiary, modify given parts of the settlor’s declaration and to determine or modify the duration of the trust. Although, the settlor has no rights to instruct the trustee, the settlor may specify the asset management guidelines in the trust deed. These guidelines provide the legal framework of the asset management.

The settlor may monitor the activity of the trustee but the expenses of such monitoring shall be borne by the settlor. It derives from the concept of asset separation that it is not allowed to the settlor to instruct the trustee. This rule provides independence for the trustee and higher responsibility, as well. The final legal instrument of the settlor to control the trustee’s activity is that settlor may remove the trustee at any time simultaneously appointing another trustee. This rule may seem simple; nevertheless, it carries an extra transfer of ownership as the current trustee holds the legal title of asset ownership; therefore, appointment of a new trustee must be in that legal form which fulfils the legal requirements of the transfer and registration of ownership.

The settlor must determine the identity of the beneficiary and the conditions of the commencements and termination of entitlement of beneficiary. The beneficiary may be described by the reference to the scope of the beneficiaries, providing power to the trustee to define the proportion of the beneficiaries creating a possibility to set up discretionary trust as well. The validity test of this rule is that the trustee always must be able to identify a beneficiary. Although the settlor transfers the right to select the beneficiary to the trustee using this opportunity; nevertheless, this does not mean that the trustee has unlimited rights to determine anyone as beneficiary. First, the settlor must determine the possible scope of beneficiaries and must provide guidelines how to select the beneficiary among options. Second, the settlor may delegate this power to its representative as well, appointing a protector, who is the settlor’s representative in the trust relationship; therefore, may practice the settlor’s rights.

The settlor may appoint the beneficiary or the scope of beneficiaries and dispose of the conditions of the managed assets’ distribution. The settlor may dispose that the managed assets must be transferred back to the settlor or to the settlor’s heirs or to a third person, wholly or partially by the occurrence of any specified conditions or after a specified period of time. The appointment of the trustee as sole beneficiary is null and void. However, the settlor and the trustee may be the same person but in this case the trust must be created in a public document by irrevocable statement of the settlor.

4. Rights and obligations of the trustee

The trust framework of the Civil Code is very liberal and does not limit the scope of persons who may act as a trustee. The general rule is that every person – legal or natural – having its ability to act may be a trustee. Nevertheless, the Trustees Act provides further rules in this area and distinguishes the licenced and non-licensed trustee activity. The Trustees Act completes the Civil Code’s relatively shortly list of the trustee’s rights and obligation; nevertheless the Code itself contains the most important one, an ancient Roman law rule – bonus et diligens pater familias. This rule has been implemented to the framework extending the trustee’s obligation, as the trustee is obliged to protect the trust assets from the predictable immediate risks in compliance with commercial rationality. Moreover, in accordance with the fiduciary requirements of the trust, the trustee must act primary for the benefit of the beneficiary’s interests.

On the other hand to fulfill this obligation, the trustee has the right to claim the registration of ownership and the possession of the trust asset after the conclusion of the trust deed. The trustee may force this right against anyone, including the settlor, as well.

Requirements towards and duties of the trustee

The framework provides broad rights to the trustee disposing the trust assets, as the trustee has the rights to exercise the trust assets’ ownership to a large extent; however, the trustee is obliged to dispose of the trust assets according to the conditions and restrictions of the trust deed. Balancing between the trustee’s rights and the settlor and beneficiary’s interest, there are rules to protect the former two’s interest against the trustee’s breach of obligations.

The Trustees Act provides further obligations for the activities of the licensed trustees. This act distinguishes licensed (professional) and non-licensed (ad hoc) trustees. If a trustee concludes at least two trust contracts annually or if the trustee’s fee excess of one per cent of the value of the trust asset, the service is classified business-like and such an activity may be carried out only with a licence issued by the National Bank of Hungary, prior to the start of such activity. Licensed trustee may be only a limited liability company or limited company by shares registered in Hungary or the branch – registered in Hungary – of an undertaking based in another contracting state of the Agreement on the European Economic Area.

The trust company may not carry out any other activity than trust asset management and its related services and its name must make reference to trust asset management. The trust company must fulfil strict human resource and infrastructure requirements to receive and maintain the licence of the National Bank of Hungary. The human resource conditions are the followings: the company must employ at least one person having master degree legal qualification and bar exam, one person having master degree economic qualification; moreover it must hire a statutory auditor, as well. The infrastructure requirements of a trust company are the followings: at least HUF seventy million registered capital, financial security which is equal to twenty per cent of the trust assets but minimum HUF seventy million and maximum 1500 million, office, website, internal Rules for accounting policy and accounting software, which fulfils the requirements of the separated trust asset accounting.

The trust company must duly perform its trust contracts in accordance with statutory requirements for the utmost benefit of the beneficiary, in particular. The trust company is obliged to inform the settlor about the risks of the contract defined by law, prior to the conclusion of the trust contract. In addition, the trust company must provide information in writing, on a monthly basis. If no changes are made to the original information, it is sufficient to make reference to such fact in subsequent information. The trust company is required to maintain records of the trust relationships to support the traceability of trust, administrative controls and administrative assessments of assets.

The trust relationship and the activity is essentially built on trust, particularly in relation to the selection of the trustee, that is, beyond their business relationship. The trust relationship between the settlor and the trustee is governed predominantly by aspects of the trust contract and underlining rules of the mandate contract and less by the general contracting rules of the Civil Code.

In important obligation that the trustee must avoid conflicts of interest, therefore it is not allowed to conclude contract for his or her own benefits. Moreover, one of the trustee’s main obligations is to manage the trust assets separately from his own and other trust assets.

If the trustee is authorised to designate the beneficiary under the trust deed, the trustee may have the right to determine the share of the beneficiary as well.

Due to the high degree of professional requirements arising from the fiduciary nature of the trust relationship, the trustee must act for the utmost benefit of the beneficiary. The trustee must protect the trust property against foreseeable risks in a commercially reasonable manner.

The management of the trust asset includes the exercise of rights arising from ownership, other rights and claims transferred to the trustee and the fulfilment of obligations arising therefrom. The trustee may dispose of the assets belonging to the trust assets under the conditions and within the limits sets out in the trust deed. If the trustee breaches his obligations and illicitly alienates trust asset to a third party, the settlor and beneficiary have the right to reclaim the alienated asset for the benefit of the trust assets, if the third party did not purchase the asset in good faith or for consideration. This rule is applicable as well, in the case of illicit encumbrance of the trust asset.

The trustee must keep confidential all facts, information and other data he or she becomes aware of during his or her office as trustee or in relation thereto. Such obligation is without prejudice to the establishment of the trusteeship and remains in effect after the termination of the trust. The settlor and his or her successors may grant exemption from the confidentiality obligation.

One of the basic obligations of the trustee is that the trustee must inform the settlor or the beneficiary about the actual situation of the trust assets upon their request. This obligation is independent whether the trustee is licenced professional or non-licensed trustee; nevertheless in the case of licensed trustee the information providing obligation is more regulated. Such information must cover in particular, the actual and foreseeable increase in the trust assets, the particular assets of the trust, their value and commitments charged to the trust assets. Upon request, the trustee must account for the trust assets and settle accounts with the settlor and beneficiary. Expenses incurred in connection with the provision of information and the payments of invoices are borne by the settlor and beneficiary.

The rights of the trustee are governed by the Civil Code and rules specified in the trust deed. The rights of use and disposition are also conferred on the trustee in the case of trust, that is, the trustee has the right to

  • use and operate the trust asset,
  • possess the managed asset, resort to protection of possession under the appropriate title,
  • enjoy, that is, utilise the trust asset either by himself, or with the collaboration of a subcontractor or agent, if he is authorised to employ such third parties under the trust deed. This right in practice is limited in the trust deed.
  • right of alienation (e.g. in the case of portfolio-type trust asset),
  • right of encumbrance (establishment of e.g. lien on assets belonging to the asset),
  • right of destruction, or rather, right of processing and use (e.g. en entire plant is entrusted, together with its raw materials, and these are processed in the regular manufacturing process)
  • right to exercise membership or shareholder rights.

The due care and diligence trust management is generally applicable to trust relationship. If during the process of utilising the trust relationship, the parties do not specify yield rate but only the due care and diligence fulfilment of the trustee, the trustee is required to manage the trust asset with due care to ensure the satisfactory performance of the trust. If however, the trust deed specifies annual yield rate and profit, the trustee must fulfil them; therefore it is a higher risk for the trustee. In both cases the trustee’s remuneration may be linked to the annual yield performance of the trust. Due to the general prohibition of the instruction, the trustee may not be instructed how to fulfil its obligations. Nevertheless, the trust deed may provide guideline for the asset management or general prohibition of alienation of the trust assets or certain trust asset. In this case currently it is difficult to determine how the trustee can fulfil its obligation to ensure that the trust asset preserves its value in the case of changing circumstances. The authors believe that the general rule of the due care and diligence trust management is applicable in changing circumstances as well, even though there is a prohibition of alienation in the trust deed. In this case the trustee must measure the different consequences and make a decision keeping in mind the utmost benefit of the beneficiary. In complex cases an investment advisory board, having its part the beneficiary or some of them, may help this decision making process.

Last but not least, there are rules securing the trustees’ remuneration, providing that first of all the settlor must pay the contracted remuneration to the trustee; nevertheless, the trustee is entitled to satisfy the claims for remuneration or justified costs directly from the trust assets, if neither the settlor nor the beneficiary settle the trustee’s remuneration. The trustee may claim reasonable remuneration and costs as well, if the trustee carries out its activity free of charge. The remuneration of the trustee may be implemented under different scheme; therefore the contracting parties are free to determine the remuneration for the service.

5. Liability of the trustee

The trustee is liable toward the settlor and beneficiary for the breach of his obligations in accordance with general rules of liability for damages. If the trustee carries out his duties without consideration, rules of liability for damages are applicable to his breach of gratuitous contracts. The settlor and beneficiary may claim the management of any financial gain as part of the trust asset, which was realised through the trustee’s breach of his obligations arising from the trust.

The trustee is liable as well for the damages occurring in the trust assets caused by breaching the obligations towards the settlor or the beneficiary, according to the general rules of liability for damages. The framework provides rules for the liability of the trustee towards third persons, as well. First of all, the trustee is liable with the trust assets for the fulfillment of the obligations. Second, the trustee has unlimited liability with its personal assets for the fulfillment of the claims obligating the trust assets, if they are not satisfied from the trust assets and the third party could not and did not need to know the commitment of the trustee spread beyond the trust assets.

If the settlor appoints more than one trustee, the actions and decisions of the trustees are taken jointly. If the trustees are also liable with their own property for their commitments, they assume joint and several liability for joint decisions toward third parties. The co-trustees assume joint and several liability toward the settlor and beneficiary for the breach of obligations arising from the trust.

6. Legal status of the trust asset

The trust asset may be anything, which is allowed to be lawfully owned; cash, securities, intangible or tangible assets, rights or claims. Mutatis mutandis, goods which ownership or possession is prohibited cannot be part of the trust assets.

Section 6:312 of the Civil Code provides rules on the separation of the trust asset from the trustee’s own and other trust assets. The trust asset constitutes separated property from the trustee’s own assets and other trust assets managed by the same trustee. The trustee is obliged to record the trust asset separately from his own and other trust assets. The parties’ derogation from this rule is null and void. The recorded trust asset is deemed to fall within the scope of trust asset until proven otherwise. Any asset substituting the trust assets, insurance indemnities, damages or other value and profits thereon, constitutes part of the trust asset, whether recorded or not. Assets not recorded by the trustee as comprising part of the trust asset are deemed to be the private property of the trustee until proven otherwise.

The Trustees Act contains further detailed rules regarding the separation and administration. The most important among these rules that the trust is a separate and independent entity from the accounting perspective but it is not a legal person. Therefore, the trust asset must be separately accounted in HUF or EUR but these records, contrary to the corporate loss and profit statements, are not publicly accessible.

The transfer of assets from the settlor to the trust is tax-free, there is no hidden taxation or transfer duty. The trust’s income is taxed independently from the trustee’s other income. The trust is a Hungarian corporate taxpayer, whose registered seat must be maintained in Hungary. The trustee is obliged to file an annual return on behalf of the trust to the Inland Revenue Service. The trust’s annual income is taxed as corporation income with corporate income tax. Capital distribution is tax-free for Hungarian tax resident private individuals. In the case of a foreign tax resident individual beneficiary, the tax rules of beneficiary’s residence are applicable. The trust income distribution to private individuals is treated as dividend and it is taxed with 16% personal income tax in the case of a Hungarian tax resident individual. If the beneficiary is a foreign tax resident individual, withholding tax may be applicable but the Hungarian double tax treaty network may reduce it to zero. Hungarian tax resident companies may pay corporate income tax on capital distribution. In the case of a foreign entity, there is no withholding tax on capital distribution in Hungary. Hungarian tax resident companies receive the income distribution as tax-free dividend. If the beneficiary is a foreign corporation, there is no applicable withholding tax in Hungary.

The spouse, life partner, personal creditors of the trustee, and creditors of other trust assets managed by the trustee cannot lay claim to the assets of the trust asset. The trust asset does not constitute part of the trustee’s inheritance. The beneficiary and the settlor may take action against the spouse, life partner, personal creditors of the trustee, and creditors of other trust assets managed by the trustee, to secure the separation of the trust assets.

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Business taxation 1.
General notes

Dear readers, in this blog about the Hungarian business taxation I provide you a general overview about the Hungarian tax regime. This blog does not provide tax or legal advisory. The first blog deals with the basics of the tax regime.

The Hungarian tax system is similar to the level of complexity found in other OECD countries and harmonized with EU directives and provides a secure legal framework for the conduct of business. Tax acts in Hungary are enacted by the Parliament; nevertheless, local municipalities may enact local tax decrees. The tax authority provides only interpretative and administrative guidelines for these laws. Court decisions currently play an increasing role in interpreting tax laws and the European Court of Justice (ECJ) case law is also applicable.

Hungarian taxation operates under a self-assessment system. Taxpayers are required to register, determine their tax obligation, make advance payments, file tax returns on their own behalf, make corrections to the tax returns as needed, keep records and supply information as required by law. Corporations are subject to continuous assessment throughout the year. The tax authority randomly examines tax returns to enforce the self-assessment system.

The tax year is the calendar year for individuals and the calendar year or the business year for companies. In general, tax returns must be filed annually. However, for VAT, payroll and social contribution quarterly or monthly filing is required. Generally, on the basis of the tax returns, taxpayers must pay their taxes monthly (VAT, social contribution) or quarterly (VAT) or annually. In addition, corporate taxpayers should top up their annual tax payable for the given tax year by 20th of December each year up to 90 percent of their expected annual tax liability. Corporate income tax returns for corporate taxpayers should be submitted within 150 days of the business year-end. Personal income tax returns for individual taxpayers are due by 20th of May following the calendar year-end.

Subject to the fulfillment of the general, size related conditions, companies may also choose to prepare a simplified annual report form.

The law repeals the condition that the impact of exchange rate changes upon the year-end revaluation of balance sheet items is to be recorded only if the effect is significant. A simplification is that the gain or loss is the value of participations or debt securities denominated in foreign currencies may be determined without filtering out the foreign exchange effects. Since 2010, any enterprise has been entitled to keep its books and prepare its financial statements in Euro without any restriction.

Hungary’s corporate tax rate is competitive in the EU, although the low corporate tax rate is complemented with local business tax levied by the municipalities, and high social security charges. Hungary does not impose withholding tax on dividends, interest or royalties paid to corporate entities.

Hungary has a broad network of bilateral tax treaties on double taxation and it is a signatory to DTTs with 73 countries worldwide . The DTTs usually reduce foreign withholding tax down to zero or 5 percent. Hungary also has set up a broad investment protection treaty network providing a safe and regulated environment to foreign investors. Regarding the investment protection in Hungary there are three independent layers in place within the system. These are the Treaty on the Functioning of the EU (TFEU) that protects both EU and third country investors; bilateral investment protection treaties and the Hungarian Constitution. The TFEU and international treaties override the Hungarian domestic regulations.

Business taxation 2.
Taxes, contributions and stamp duties in Hungary

Dear readers, in this blog about the Hungarian business taxation I provide you a general overview about the Hungarian tax regime. This blog does not provide tax or legal advisory. This blog deals with the Taxes, contributions and stamp duties in Hungary.

Currently, the following taxes, contributions and stamp duties are imposed in Hungary:

2.1 Central Taxes

  1. Corporate income tax (CIT) ,
  2. Simplified entrepreneurial tax (EVA )
  3. Itemized tax for small businesses (KATA )
  4. Tax for small business (KIVA )
  5. Value-added tax (VAT)
  6. Personal income tax (PIT)
  7. Simplified contribution to public revenues (EKHO )
  8. Special taxes
  9. Property taxes
  10. Registration tax
  11. Excise tax

2.2 Local Taxes

  1. Property taxes (Building tax and land tax),
  2. Local business tax
  3. Communal taxes (individual’s communal tax and tourism tax)
  4. Municipal tax

2.3 Social contributions

  • Contribution for sick payment
  • Social contribution tax
  • Health contribution (EHO)
  • Health service contribution
  • Vocational training contribution
  • Pension contribution
  • Contribution of health insurance
  • Labor market contribution

2.4 Environmental taxes

  1. Environmental protection product fee
  2. Environmental pollution fee
  3. Energy tax
  4. Mining contribution

2.5 Other taxes and fiscal obligations

  1. Vocational training contribution
  2. Rehabilitation contribution
  3. Gambling tax
  4. Innovation contribution
  5. Cultural tax
  6. Public health product tax
  7. Accident tax
  8. Insurance tax
  9. Utility lines tax
  10. Telecommunications tax
  11. Advertisement tax

2.6 Stamp duties

  1. Duties of asset acquisition
  2. Procedure duties

In this chapter we only deal with the significant taxes, contributions and stamp duties in details. Due to the complexity of the system in this paper we provide only the main characteristics of the tax system and do not elaborate the details of the taxes, contributions and stamp duties.

Business taxation 3.
Corporate Income Tax – Tax liability and taxpayer

Dear readers, in this blog about the Hungarian business taxation I provide you a general overview about the Hungarian tax regime. This blog does not provide tax or legal advisory. This blog deals with the Corporate Income Tax (Tax liability and taxpayer).

Corporate income tax is one of the most dominant central taxes in Hungary. A Hungarian corporate tax resident entity is taxed on its worldwide income. The resident corporate taxpayers are subject to unlimited tax liability, as long as nonresident corporate taxpayers are subject to limited tax liability in Hungary. If a nonresident entrepreneur or person performs business in Hungary through domestic premises, this activity triggers limited tax liability in Hungary and the person becomes corporate taxpayer in Hungary. The effective place of management in Hungary creates unlimited corporate income tax liability.

Subsidiaries of foreign companies registered in Hungary are corporate taxpayers; therefore, these are subject to corporate income tax under ordinary domestic rules. Foreign companies are deemed to be resident in Hungary, if their effective place of management is in Hungary. Registered branch offices and non-registered permanent establishments are taxed under the same regime applicable to Hungarian-registered corporate entities.

The shareholder of a company whose Hungarian real estate property exceeds 75 percent of the aggregate market value of assets shown in its financial statements is subject to Hungarian taxation when transferring the shares in the company, assuming a member of the company is resident in a country with which Hungary has not concluded a double tax treaty or if an applicable treaty allows the taxation of the capital gains in Hungary.

Business taxation 4.
Corporate Income Tax – Controlled foreign company

Dear readers, in this blog about the Hungarian business taxation I provide you a general overview about the Hungarian tax regime. This blog does not provide tax or legal advisory. This blog deals with the Corporate Income Tax (Controlled foreign company).

A company is deemed to be a controlled foreign company (CFC) if a Hungarian tax resident ultimate beneficial owner owns or controls at least ten percent participation in the foreign company or more than fifty percent of the company’s revenue derives from Hungarian source and the effective payable foreign corporate income tax of the company is less than ten percent of the gross pretax profit and the company is not registered in the EU or OECD countries or those jurisdictions that have double tax treaty with Hungary and there is no such an owner of the company that listed in recognized stock exchange and owns at least twenty five percent of the company, all over the tax year.

Business taxation 5.
Corporate Income Tax – The corporate income tax rate and tax base

Dear readers, in this blog about the Hungarian business taxation I provide you a general overview about the Hungarian tax regime. This blog does not provide tax or legal advisory. This blog deals with the Corporate Income Tax (The corporate income tax rate and Tax base).

There is only on bracket in the corporate income tax rate, that is nine percent of pretax profits.

The taxable income of resident corporate taxpayers is based on pretax profits, calculated in the profit-and-loss statement prepared in accordance with the accounting rules, with a number of corrections for the differences in deductive and nondeductible items recognized by accounting and tax law. The tax base is the pretax profit modified by the decreasing and increasing items. The pretax profit contains the operating profit, the result on financial operations, modified by the extraordinary profit. The Corporate Income Tax Act contains the requirement of minimum income that is equal to the gross revenue minus the revenue of the foreign premises; multiplied by 0,02.

Business taxation 6.
Corporate Income Tax – Main tax-deductible and non-deductible items

Dear readers, in this blog about the Hungarian business taxation I provide you a general overview about the Hungarian tax regime. This blog does not provide tax or legal advisory. This blog deals with the Corporate Income Tax (The corporate income tax rate and Tax base).

The accounting system operates two levels tax base modification system. First, there are items that increase the tax base and there are items that decrease the tax base. Second, there are several tax-deductible and non-deductible items that modify the pretax profit. The general rule is that an item decreases the tax base if it is in connection with income generating activities of the taxpayer and it increases the tax base if it is not in connection with income generating activities of the taxpayer. The main tax base decreasing items are: depreciation and amortization, materials, wage cost, taxes and other public burdens, financial expenditures, extraordinary expenses. The main tax base increasing items (no connection with income generating activities of the taxpayer) are listed in the Corporate Tax Act.

There are items that modify the stated tax-base; these are the tax-deductible and non-deductible items.

Allowable deductions include:

  • losses carried forward, maximum fifty percent of the tax-base in one accounting year;
  • recognized provisions;
  • the costs of switching to double-entry accounting and switching between accounting currencies;
  • foreign currency gains and losses;
  • gain of reported participation;
  • gain of reported intangible assets;
  • received dividend;
  • income of capital reduction;
  • gains of supported participation exchange;
  • Corporate taxpayers may deduct fifty percent of royalties but the deduction may not exceed fifty percent of the taxpayer’s total pretax profits.
  • The tax base may be reduced by research & development costs.

Non-deductible expenses include:

  • non-business related expenses;
  • loss in value accounted for in the tax year for receivables;
  • interest on loans if the thin capitalization rule is applicable;
  • fines;
  • canceled debt if the claim is not uncollectable;
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