Реферат: Country Study, Hungary

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100,001 - 150,000

20

150,001 - 220,000

25

220,001 - 380,000

35

380,001 - 550,000

40

Over 550,000

44

Source 1996 Deloitte & Touche LLP

The Hungarian Personal Income Tax (PIT) has several interesting features. The first feature that is unique is that all Hungarians are taxed separately. In other words, unlike the American Tax system where a family can jointly file the Hungarians prefer (for ideological reasons) to file individually. However, this system is not with out it's flaws. The problem that tax administers run into is when one spouse stays at home to look after the children. The reason for this difficulty is the one wage earner is subject to heavier taxation than two wage earners making the same total. Tax administrators however are reluctant to change the current system because of the administrative simplicity.

A second feature of the Hungarian Personal Income Tax (PIT) that draws attention to itself is the fact that any income earned through deposits and securities are tax free if the interest rates are lower than that of the National Bank of Hungary. According to D&T the National Bank of Hungary's interest rate in January was 25%. This means that all bank deposits that pay lower than 25% are tax free. However, If an individual were to make 28% on investment he/she would be subject to a 20% tax on the additional 3% (as shown in figure 1.2).

fig. 1.2

Initial Investment 100,000 HUF

Interest Paid on Investment

in Bank X (28%) 128,000 HUF

Interest Paid on Investment

National Bank (25%) 125,000 HUF

Taxable Interest Income 3,000 HUF

Taxes Due 600 HUF

This aspect of this tax allows for fair treatment to those who would otherwise lose their money putting it in accounts that could not stay up with the tremendous inflation that several countries in eastern Europe face due to their recent transition to a market economy (Newbery, 6).

As was true with the Value Added Taxes (VAT) the Personal Income Tax (PIT) also has exemptions. The following is a list of examples of items exempt from tax (Okno 2).

· Social Security allowances

· Gains of up to HUF 100,000 from the non commercial sale of moveable

property

· Retirement gifts of up to HUF 10,000

· Compensation of defined working clothes