The deadline for submitting the 2021 tax returns in Hungary is creeping closer: 20 May 2022. Don’t worry, it’s not much work: just review the prefilled version prepared by the Tax Authority. If all looks good, hit the submit button, and you are done. Oh, and while you are at it, don’t forget to donate your 1+1%.
For a detailed description on tax returns in Hungary, read our article here. For a crash course and recent news, read on – you can still go back to the details later.
Crash course on tax returns in Hungary
In Hungary, you normally pay taxes not in one bulk at the end of the year, but continually, throughout the year – with every salary. When an employee receives their monthly salary, they receive their net salary, after their employer has already paid the taxes on their behalf to the Tax Authority (considering tax allowances as well, like the family tax benefit, the tax benefit of the mother of four, or the tax benefit of those under 25).
In line with this, you do not have to fill in your tax returns on your own. By the time the tax returns season arrives, the Tax Authority should have every information, and they prefill your tax returns form for you; you just have to review and accept it (or correct it as necessary). The prefilled version is available online.
Latest changes to personal income tax
In October 2021, it was decided that families raising children should receive a refund for their personal income tax paid throughout 2021. You are eligible if you were eligible for the family tax benefit for at least one day in 2021 – even if you did not receive the benefit (because usually only one parent or guardian receives it). The refund should have been automatic, but there are many factors affecting the procedure. If you did not receive the refund automatically, there is a chance your tax returns form needs to be adjusted.
When you are reviewing your prefilled tax returns, indicate your eligibility for the tax refund, which you will receive after your returns are filed.
Don’t forget to donate your 1+1%
In Hungary, you have the chance to donate 1+1% of your personal income tax to churches and NGOs. This is not a donation in the sense that it does not cost you money. Instead, the Tax Authority will relay 1+1% of your personal income tax to a church and an NGO of your choice. The donation form is available on the same platform where you find your prefilled tax returns. If you skip the donation, all your taxes will stay with the Hungarian state.
Do you need suggestions where to donate your 1+1%? Check out the NGOs the Helpers Team supports, or consider donating to Menedék Association or the Hungarian Helsinki Committee, which provide practical and legal aid to people fleeing Ukraine because of the war.
Ask for help from an expert
If you are not sure how to proceed, or how to support your foreign employees with filling their tax returns in Hungary, ask you accountant for guidance. Helpers Finance offers financial assistance to foreigners in Hungary, and we hope our articles linked above can make your life easier in a foreign environment.
Are you looking for accountancy for your Hungarian company? We would be happy to assist with that too, since accountancy for small and mid-size companies is our area of special expertise. Contact us today, and let’s see how we can help you the best!