You as a non-Hungarian resident private individual or as a foreign non-Hungarian
resident person receiving dividends may file a claim for tax refund in respect
of your taxable income, if the payer has applied a tax rate higher than the one
determined on the basis of the applicable international treaty. The following
titles qualify as income from activities performed in Hungary in respect of this
article: e.g. interest, remuneration paid to entertainers, actors, artists and
sportspersons or for presentations and exhibitions, as well as royalties and dividends.
You may also file a claim if, based on a treaty on the exclusion of double taxation,
the income should not have been taxed in Hungary, and yet tax has been deducted.
The claim must be filed with the Department for Managing Refund for Foreigners,
Large Taxpayers Directorate.
There is no mandatory form prescribed for filing the claim. Nevertheless, the
number of the bank account to which the reclaimed tax is to be transferred and
the amount of tax reclaimed shall be indicated.
The following shall be attached to the claim:
- residence certificate (foreign domicile is verified by a copy of the authentic
Hungarian translation of the document issued by the relevant foreign tax authority
or by an international organization competent to verify entitlement for tax exemption),
and
- the payer’s certificate indicating the amount of the income as well as the taxes
deducted, and
- the foreign person’s statement, made prior to the date of payment − translated
into Hungarian and authenticated −, in which the foreign person declares whether
he qualifies as the beneficiary owner regarding such payment, if this condition
has any effect on his tax liability according to the pertinent treaty on the exclusion
of double taxation (in particular, in respect of interests, dividends and royalties).
Exception: Switzerland and Hungary have concluded an agreement, in respect of
Swiss resident persons, on the special rules governing the refund of dividend
tax difference. Pursuant to this agreement, the two states apply a form entitled
FORM2 in their authority proceedings. Swiss resident persons only need to attach
the payer’s certificate to this form for their refund claim to be granted.
The claim for refund must be filed by the 31st of December of the 5th year following the year of payment. Since dividend tax liability was terminated
with effect from 1 January 2006, claims for dividend tax refunds must be lodged
by 31 December 2010 the latest.
The Tax Authority transfers the tax difference to the bank account specified
by the foreign person. In the case of a bank account held abroad, the following
must be provided: the name and address of the bank, the relevant SWIFT code, the
bank account number to which the transfer is to be made, along with the IBAN code,
and the currency to which conversion is requested.
In addition to what is stipulated in the section entitled Who can represent a foreign person in front of the Tax Authority?, the non-Hungarian resident person to whom dividends are paid may be represented
at the Tax Authority in connection with any tax refund procedure by his custodian
with proper authorization, or by his proxy if the proxy is registered in the payer’s
register of shareholders at the time of the payment of the dividends. The custodian
or the proxy may give and grant further authorisation for representation to a
person with proper entitlement.
,The custodian may issue a statement to the payer, under his unlimited as well
as joint and several liability for tax, in which he declares whether the foreign
person qualifies as the beneficiary owner. This statement covers payments made
under a given contract and under a given title during the actual calendar year
until any changes in the circumstances occur.
