Specific Taxes in Hungary
Beyond corporate and personal income taxes, Hungary imposes a diverse range of specific taxes that contribute to its fiscal landscape. These taxes encompass various aspects of economic activity and individual wealth, serving specific purposes and policy objectives.
Value-Added Tax (VAT)
VAT is a consumption tax levied on the sale of goods and services. It is a comprehensive tax that applies to most business transactions, with a standard rate of 27%. Reduced rates of 18% and 5% apply to certain essential goods and services, such as food, beverages, and transportation.
Excise Duties
Excise duties are levied on specific goods, such as alcohol, tobacco, and fuel. These taxes aim to discourage consumption of harmful substances and generate revenue for the government. The rates vary depending on the type and quantity of the goods.
Property Tax
Property tax is an annual tax levied on real estate owned by individuals or entities. The tax is based on the property's value and location. Residential properties are subject to a lower tax rate than commercial properties.
Inheritance and Gift Tax
Inheritance and gift tax is levied on the transfer of property or assets from one person to another. The tax rates vary depending on the relationship between the parties involved and the value of the inheritance or gift.
Environmental Taxes
Hungary imposes environmental taxes on activities that have a negative impact on the environment. These taxes include a carbon tax on greenhouse gas emissions, a waste tax on the disposal of waste, and a water pollution tax on the discharge of wastewater.
Stamp Duty
Stamp duty is a tax levied on various legal documents and transactions, such as property transfers, share transfers, and contracts. The tax rates vary depending on the type of document or transaction.
Vehicle Tax
Vehicle tax is an annual tax levied on the ownership of motor vehicles. The tax is based on the vehicle's engine size and emissions.
Taxpayers Subject to Specific Taxes
The taxpayers subject to specific taxes vary depending on the nature of the tax.
- VAT: Businesses engaged in the supply of goods and services are liable for VAT.
- Excise Duties: Manufacturers, importers, and distributors of excisable goods are liable for excise duties.
- Property Tax: Property owners, including individuals, companies, and trusts, are liable for property tax.
- Inheritance and Gift Tax: Beneficiaries of inheritances or gifts are liable for inheritance and gift tax.
- Environmental Taxes: Companies and individuals engaged in activities with environmental impacts are liable for environmental taxes.
- Stamp Duty: Parties involved in transactions subject to stamp duty, such as property buyers, shareholders, and parties to contracts, are liable for stamp duty.
- Vehicle Tax: Owners of motor vehicles are liable for vehicle tax.
Purpose and Rationale
The specific taxes imposed in Hungary serve various purposes and policy objectives.
- VAT: VAT generates a significant portion of government revenue and is used to fund public services and infrastructure.
- Excise Duties: Excise duties aim to discourage consumption of harmful substances and generate revenue for the government.
- Property Tax: Property tax contributes to local government budgets and helps regulate property ownership.
- Inheritance and Gift Tax: Inheritance and gift tax aims to redistribute wealth and generate revenue for the government.
- Environmental Taxes: Environmental taxes aim to internalize the costs of environmental damage and encourage sustainable practices.
- Stamp Duty: Stamp duty generates revenue for the government and helps regulate legal transactions.
- Vehicle Tax: Vehicle tax contributes to road maintenance and infrastructure development.
Legal Framework
The specific taxes in Hungary are established by various legal statutes and regulations. These include:
- VAT Act (Act CXXVII of 2007)
- Excise Duty Act (Act LXXVIII of 2016)
- Property Tax Act (Act CXXXI of 1990)
- Inheritance and Gift Tax Act (Act LXXIII of 1990)
- Environmental Protection Act (Act LIII of 1995)
- Stamp Duty Act (Act XCIII of 1990)
- Vehicle Tax Act (Act LXXXII of 1991)
These legal texts outline the obligations, rates, and procedures for the collection and enforcement of specific taxes in Hungary.
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