Debt securities - rates, eligibility, availability of relief etc. - Hungary
From 1 January 2016, the standard rate of withholding tax on interest from Hungarian debt securities is 15%. Before that date, the standard withholding tax rate on Hungarian debt securities was 16%.
Hungarian law does not currently recognise the nominee concept for interest payments made on debt securities. Clearstream Banking, as account holder, is recognised as being the registered owner of debt securities. As a result, interest payments made on Hungarian debt securities safekept for Clearstream will be exempt from withholding tax (as legal entities are not subject to this tax).
No action is required by the customer to ensure that exemption at source is applied on interest payments. However, it remains the responsibility of the final investors to fulfil their tax declaration and payment obligations. Clearstream Banking has no direct or indirect liability towards the respective tax authorities, including those of Hungary, if this obligation is not respected by the individual beneficial owners.