Taxation of Cryptocurrencies in Hungary
Hungary's tax regime for cryptocurrencies is a complex and evolving landscape. The classification of cryptocurrencies, calculation of tax liabilities, and applicable tax rates are all subject to ongoing interpretation and refinement.
Classification of Cryptocurrencies
In Hungary, cryptocurrencies are not explicitly defined in tax law. However, the Hungarian Tax Authority (NAV) has issued guidance classifying cryptocurrencies as "other assets" for tax purposes. This classification means that cryptocurrencies are not considered currency or property but rather a type of intangible asset.
Taxation of Cryptocurrency Transactions
The taxation of cryptocurrency transactions in Hungary depends on the nature of the transaction.
- Buying and Selling Cryptocurrencies: Gains from the sale of cryptocurrencies are subject to a 15% personal income tax (PIT). The taxable gain is calculated as the difference between the selling price and the acquisition cost of the cryptocurrency.
- Mining Cryptocurrencies: Income from mining cryptocurrencies is considered business income and is subject to the general corporate income tax (CIT) rate of 9%.
- Trading Cryptocurrencies: Profits from trading cryptocurrencies are also subject to PIT at a rate of 15%.
Tax Rates
The tax rates applicable to cryptocurrency transactions in Hungary are as follows:
- Personal Income Tax (PIT): 15%
- Corporate Income Tax (CIT): 9%
Exemptions and Deductions
There are no specific exemptions or deductions available for cryptocurrency transactions in Hungary. However, general tax deductions and allowances may apply, such as the personal income tax allowance or the corporate tax loss carryforward.
Legal Framework
The taxation of cryptocurrencies in Hungary is governed by the following laws and regulations:
- Act on Personal Income Tax (PIT Act): Section 7(1)(a) and Section 14(1)
- Act on Corporate Income Tax (CIT Act): Section 4(1) and Section 8(1)
- NAV Guidance on the Taxation of Cryptocurrencies: NAV Communiqué No. 1/2018.
Policy Objectives
The Hungarian government's approach to cryptocurrency taxation aims to balance the need for revenue generation with the promotion of innovation and investment in the cryptocurrency sector. By classifying cryptocurrencies as "other assets" and applying standard tax rates, Hungary seeks to provide clarity and certainty to taxpayers while fostering a supportive regulatory environment for cryptocurrency-related activities.
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