May 20th, is the deadline in Hungary for the submission of personal income tax return
Wednesday is the deadline for the 2014th annual personal income tax return documents submission, which affects the foreign home owners as well.
We summarized the most important information below:
Do I have to pay tax in Hungary?
Personal income tax has to be paid after your income of letting your Budapest property.
Hungary has a signed agreement with 82 countries in regards of the avoidance of double taxation.
Under this agreement, the 16% income tax after the income of renting-out should only be paid in Hungary.
If the rate differs between countries, than you might have to pay the difference at your home country, but this information should be requested from the local tax office.
Unfortunately, paying the full amount in your country does not release you from the responsibility of tax liabilities in Hungary.
What can I expect from a good accountant?
Of course, if we have a good accountant in Budapest, than there is no need for worrying.
The only job we have, is to send the invoices and documents needed for preparation- if we haven’t done this by now.
The accountant will prepare the tax return documents, and inform us in regards of the amount of tax that should be paid.
The accountant is a huge help in two areas. First of all, they fill out the tax return form correctly.
Secondly, they can help minimize the payable tax- in some cases it may even be zero, however it is important that the accountant uses the right method.
The cheapest is not always the best!
Preparing a tax return can be a quick and easy task for the accountant, if they use the simplified accounting method.
In this case, the accountant does not take the real costs into consideration, the invoices are not needed, the receipts do not have to be collected, however this way, only 10% cost can be eligible, ergo, this may not be the best for the property owner.
If a professional accountant chooses the itemized accounting method, it is more likely that the charges will be minimized.
It might be worth going in this direction, even if the yearly accounting fee is higher, since overall we can save this way as well.
