An insurance tax bill has been adopted by Parliament and will come into force from 1 January 2013, subject to it being signed by the Hungarian president.
The main features of the new tax will be the following:
- It will be levied on insurance fees from comprehensive insurance, as well as most non-life insurances. Agricultural insurance, mandatory third-party liability insurance and sickness-insurance will not be covered
- The rate will be 15% on comprehensive insurance and 10% on the rest
- The tax will be payable by insurance companies but may be recharged to policyholders
- The tax will apply to risks arising in Hungary and will also be payable by insurers operating on a freedom-of-services basis. According to Hungarian case law, no relief from double taxation will be available, as the tax is unlikely to be regarded as a tax on capital or on income
- The 30% insurance tax on mandatory third-party liability insurance will remain unaffected. However, the special tax on insurance companies as well as the fire protection surcharge will be repealed.
Insurers, including those offering their services in Hungary without a physical presence, should review their pricing policies in the light of this new tax.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 12/07/2012.
