This year, the National Tax and Customs Administration (NAV) has prepared the personal income tax (SZJA) return draft for all taxpayers, but in several cases, it may be necessary to supplement this document.
The 2022 tax declaration draft is available on the eSZJA portal, and the deadline for submitting the form is May 22. Until this date, the document can be finalized. Often, it is not enough for simply accept the draft because we need to modify it first. The tax authority does not have a complete overview of all our transactions, thus we have collected the most common income types, deductions, and other relevant information which should be included.
INCOMES
It is not uncommon for individuals to have other sources of income in addition to their wages, which are likely not part of the draft version of the SZJA declaration.
Sole entrepreneurship
With the exception of those who choose KATA taxation, all sole entrepreneurs are required to declare the income from their business activities during the annual SZJA declaration.
Note: The entrepreneurs must re-select their taxation which will be valid for the whole year. Therefore, it is crucial that the document is submitted by a qualified expert.
Renting out real-estate
Renting out real estate is a taxable activity, and the income is typically calculated using a cost ratio of 10%. Therefore, 90% of the revenue is considered income, and 15% personal income tax must be paid on it.
Selling real-estate
When selling real estate that has been owned for less than five years, the seller is required to pay personal income tax. This must also be declared in the tax return.
Income from abroad
Certain transactions are subject to taxation in Hungary, even if the income is earned abroad. This special tax rule typically applies to dividend payments.
Further details can be found in the double tax agreement between the two countries.
Crypto transactions
If a private individual had income from cryptocurrency transactions in 2022, it must be declared in the personal income tax return. 15% personal income tax must be paid on the profits earned during the tax year. When calculating the taxes, the total revenue from cryptocurrency transactions can be deducted by all verified expenses incurred in acquiring the cryptocurrency during the tax year. For further information, please visit the website of NAV.
TAX DEDUCTIONS
In all cases, we should check whether we have been eligible for any tax credit during the year and, if so, whether we have already claimed it. It may be necessary to retroactively activate the deduction when filing the personal income tax return, thereby reclaiming tens of thousands of forints from our tax payments.
Family deduction
Family tax credit can be claimed for dependent children according to the rules specified in the law. The amount of tax savings is:
- For one child: HUF 10,000/person/month
- For two children: HUF 20,000/person/month
- For three children: HUF 33,000/person/month
Discount for mothers with four or more children
Mothers raising four or more children are entitled to a tax credit and do not have to pay personal income tax in relation to the income specified in the SZJA law.
Discount for individuals under 25 and mothers under 30
Individuals under 25 and mothers under 30 do not have to pay personal income tax up to the monthly amount of the tax credit specified in the law for their income. The monthly amount is HUF 499,952, which means a tax saving of HUF 65,055. The tax credit does not apply to income from renting out property.
Deduction for first married couples
The first married couples’ tax credit can be claimed by the couple where at least one spouse gets married for the first time, and it can be claimed for up to 24 months. With this credit, we can save HUF 5,000 in taxes each month.
Personal deduction
The discount provided for people with serious health problems or disabilities. Many people are not aware that this includes lactose intolerance or gluten sensitivity, which also entitle to a personal discount.
Other deductions
Tax credits are also available for individuals who are members of health savings accounts or retirement savings plans, up to a certain limit specified by law (20% of the amount paid in). Unlike the other tax credits listed above, this credit is not credited directly to our bank account. The tax refund will be transferred to the voluntary savings account that qualifies for the credit, as declared in the tax return. For more information, please visit the website of NAV.
1+1% DONATION
We also have the opportunity this year to offer 1% of our tax to a civil organization that is important to us, by indicating the tax number of the organization we want to support.
In addition, it is also possible to support churches and religious denominations with an additional 1% of personal income tax, so don’t forget about this option if you have a preference.
Would you like to know that your business is in safe hands?
Do you need support in accounting?
Preparing and submitting the tax returns from 9,900 Ft
Contact us in email – info@digitalconto.hu
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