As an update to our previous Newsflash released on 8 July 2022 (Introduction of Securities Transactional Tax and Extension of Financial Transaction Tax | Custody | UniCredit Group) we would like to inform our clients that the Hungarian Government amended the Government Decree no. 197/2022 (4.VI) on Extra Profit Taxes ( the “Government Decree”) with regards to the applicability of the Securities Transaction Tax.
The obligation to pay STT has been extended to cross-border investment service providers providing investment services in Hungary. Provision of cross-border services shall mean the supply of investment services or ancillary services in a country other than the country where the seat, place of business, head office, or branch of the service provider is located, and the place of business or permanent residence of the customer using the services are not in the country in which the service provider has its seat, place of business, head office, or branch.
Cross-border service providers are obliged to register with the State Tax Authority by 1 September 2022 if they become liable to pay STT between 1 August and 31 August 2022. If they will be liable to pay STT after 1 September 2022, then they are obliged to register with the State Tax Authority by the 1st day of the month following the day when tax liability has arisen.
In addition, based on the amendments made to the Government Decree, the purchase of a financial instrument shall be exempt from the obligation under the regulation if it is made for the benefit of a private individual (except in his capacity as a sole proprietor) in a value not exceeding HUF 20,000 per purchase.
Impact on investors: As of 1 August 2022 certain investment service providers are obliged to pay transaction tax on the purchase of financial instruments (STT). The tax payment obligation has now been extended to cross-border investment service providers.
Disclaimer: The content of this Newsflash was prepared only for information purposes and based on information which is either publicly available or obtained from sources which may or may not be reliable and UniCredit Hungary Zrt. accepts no responsibility for its veracity, accuracy or completeness. Information of this Newsflash solely reflects the viewpoint of the authors and are not intended and shall not be interpreted as legal advice.