Country overview

Hungary is a medium size country on the East of Europe. In the country, only one percent of the population owns cryptocurrency. However, there is a basic EU crypto regulation there. Also the country has relatively low tax rates.

  Hungary has a moderate danger security level according to our rating. Jurisdiction has 66.2 points (from 100) for safety level in Numbeo crime rating (1). The homicide level (2) is 0.9 per 100,000 inhabitants a year. Level of firearm-related death (3) 0.02 per 100,000 inhabitants a year.  

  Currently, there are no laws that specifically regulate crypto payments in Hungary, nor is any (4) cryptocurrency recognized as a legal tender.  

Paying salaries in cryptocurrencies still has no regulation in the country.

There are two main regulators: the Central Bank of Hungary and the Local Tax Authority (NAV).

The Central Bank of Hungary has a conservative (5) approach to crypto assets according to the governor’s statement:

“I perfectly agree with the proposal and also support the senior EU financial regulator’s point that the EU should ban the mining method used to produce most new bitcoin. It is clear-cut that cryptocurrencies could service illegal activities and tend to build up financial pyramids.”

From a tax perspective, in 2021, the Hungarian Parliament adopted (6) Act No. LXIX. of 2021 on the amendment of certain tax laws, which, inter alia, legalize the personal incomes derived from executing transactions using cryptocurrencies.

As part of the legislative harmonization procedure, the Hungarian Parliament amended Article 6 of Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and on the Regulations Governing their Activities, clarifying that regularly conducted business activities regarding DLT financial instruments shall be deemed as investment services activities and therefore such activities can only be conducted after obtaining the necessary license issued by the CBH.

  The headline PIT rate is 15% based on PWC (7). Headline CIT rate is 9%. CGT tax rate is the same as PIT. As of January 1, 2022, the income of individuals from crypto asset transactions will be considered separately taxable income (8). This means that a tax of 15 percent must be paid on the income, the certified costs of the current year can be accounted for, and tax equalization can also be applied. The tax must be declared and paid annually in the tax return.      

1)👉🏻Crime Index by Country 2023 Mid-Year

2)👉🏻List of countries by intentional homicide rate

3)👉🏻List of countries by firearm-related death rate

4)👉🏻Cryptocurrency Regulations In Hungary. Article

5 and 8)👉🏻Cryptocurrency transactions are taxed based on new rules. Article

Global Legal Insights. Hungary

7)👉🏻PWC Tax Summaries. Hungary