Hungary: New security transaction levy - Update

29.07.2022

Note: This announcement, originally published on 24 June 2022, has been updated to provide customers with further information on the security transaction levy. Changes are highlighted.

A new security transaction levy will have to be paid by investment companies as defined in the Hungarian Investment Service Act “Bszt.” effective

1 August 2022

Impact on customers

This security transaction levy is to be paid by investment service providers and also by cross-border investment service providers as defined in the Hungarian Investment Service Act (Act CXXXVIII, “Bszt.”) and in the new Government Decree (No 257/2022. VII.18).

In addition to the extension to foreign investment service providers, another change in the new decree was that purchase on behalf of private persons with a value up to HUF 20,000 shall be exempted from the levy.

The subject of the levy is the purchase of a financial instrument with an ISIN identification code issued by KELER KSZF Zrt. (Hungarian Central Securities Depository) for the benefit of a client account or own account.

The base of the levy is the value (purchase price) of the financial instrument credited to the client account (securities account). The rate of the levy is 0.3%, but not more than HUF 10,000 per purchase.

This will be effective from 1 August 2022, applicable for the first time to the levy due until 20 September 2022.

Cross-border service providers are obliged to register with the Hungarian Tax Authority by 1 September 2022 if they become liable to pay securities financial transaction duty (SFTT) as of 1 August 2022 or by the first day of the month following the day when tax liability occurs.

Customers should note that the modalities and practical application details of this transaction levy are still not fully known on the market and are encouraged to consult their tax counsel for advice specific to their situation.

Clearstream Banking is working with the market stakeholders to get the necessary clarification and will inform customers once it knows more about the application details.

Further information

For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany, and registered in Register B of the Amtsgericht Frankfurt am Main, Germany, under number HRB 7500.