Hungary: Supplemental IPT Introduced Due to Ukraine Conflict

Edit Buliczka
June 16, 2022

From 1 July 2022, a supplemental IPT will be introduced by the Hungarian Government. The government decree (197/2022) is an addition to the existing IPT Law (Act 102/ 2012) and was published on 4 June 2022. The supplemental IPT is an additional charge to be borne by insurers. It is paid on top of the existing IPT but only for a period of 18 months and will end on 1 January 2024.

When is Hungary’s supplemental IPT due?

The supplemental IPT is due on non-life and life insurance policies written by both Freedom of Establishment and Freedom of Services insurers. A similar sliding scale regime on the income collected is applicable for this new supplemental IPT as for the existing IPT.

For non-life policies

The rates are as follows for income collected between 1 July – 31 December 2022:

  • 4% up to HUF 1 billion
  • 8% between HUF 1 billion and 18 billion
  • 14% over HUF 18 billion

For income collected between 1 January – 31 December 2023:

  • 2% up to HUF 2 billion
  • 4% between HUF 2 billion and 36 billion
  • 7% over HUF 36 billion

For life policies

The rates are as follows for income collected between 1 July – 31 December 2022:

  • 2% up to HUF 1 billion
  • 3% between HUF 1 billion and 18 billion
  • 6% over HUF 18 billion

For income collected between 1 January – 31 December 2023:

  • 1% up to HUF 2 billion
  • 5% between HUF 2 billion and 36 billion
  • 3% over HUF 36 billion

When should Hungary’s supplemental IPT be paid?

July – December 2022 period: payment by 31 January 2023

January – December 2023 period: payment by 31 January 2024

A prepayment is due to be paid by 30 November 2022 and by 31 May 2023.

The corresponding declarations have yet to be published on the Hungarian Tax Office website.

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Author

Edit Buliczka

Edit Buliczka is a client manager for indirect tax at Sovos. She is a Hungarian registered tax expert and chartered accountant. Edit has worked for companies in Hungary including Deloitte and KPMG and as an indirect tax manager she worked for AIG at the Service of Excellence Centre in Budapest. She graduated with an economist degree from Budapest Business School, faculty of finance and accountancy and also she has a postgraduate diploma from ELTE Legal University in Budapest.
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