Hungary: New security transaction levy - Update
Note: This announcement, originally published on 24 June 2022 and updated on 29 July 2022, has been updated to provide customers with further information on the security transaction levy. Changes are highlighted.
A security transaction levy has to be paid on the purchase of securities with an ISIN issued by the Hungarian Central Securities Depository (KELER Zrt.) since
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).
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 purchase on behalf of private persons with a value up to HUF 20,000 shall be exempt from the levy.
The basis of the levy is the value (purchase price) of the financial instrument credited to the securities account (both dealing on own account or client accounts). The rate of the levy is 0.3%, with a maximum of HUF 10,000 per purchase.
This levy is applicable on the purchase of securities from 1 August 2022 and the first reporting is due by 20 September 2022 for the purchase of securities in August 2022.
Cross-border investment 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.
Role of Clearstream Banking
Clearstream Banking, acting as a global custodian in Hungary, presently has no reporting and payment obligations with regard to the new security transaction levy. Furthermore, Clearstream Banking does not provide customers with service or assistance in relation to the Hungarian FTT.
Some modalities and practical application details of this transaction levy are still not fully known to the market. Clearstream Banking is working with the market participants to obtain the necessary clarifications and may reconsider its role in the future.
Disclaimer
This page is provided for information purposes only and does not aim to give any professional (legal, tax or otherwise) advice and should not be relied upon as such.
Clearstream Banking strongly recommends that customers independently assess whether and how their business is impacted by the new security transaction levy in Hungary before taking any action based on or raising from the information included in this page and shall in no event be expected to any liability for the consequences arising, whether directly or indirectly, out of such actions.
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.