Hungary: new bank levy 

24 August 2008

Financial institutions face a special tax on their 2010 income as part of a mid-year tax package.

The tax applies to all financial institutions (including branches) with at least one set of annual financial statements prepared by 1 July 2010, including banks, insurance companies, stock exchanges and other financial sector businesses.

Their 2010 tax returns for the bank levy should be filed by 30 September 2010 and the tax paid in two equal instalments by 30 September 2010 and 10 December 2010.

The tax base and rate varies according to the type of institution:
  • Banks and other credit institutions must pay 0.15% of their adjusted balance sheet total up to HUF 50 billion (c. €179 million) and 0.5% of any excess. 
  • Insurance companies must pay 6.2% of their adjusted premium income
The tax is so far unique in Europe as regards its scope, rate, variable bases and limit to 2010 income. A further HUF 200 billion is to be collected by bank levy in 2011 but its scope, rate and base will be determined by future legislation.

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