Crypto taxation in Hungary

In Europe-wide comparison, Hungary has introduced one of the lowest tax rate on cryptocurrency incomes in 2021. The 15% flat tax rate is applicable for income from any source of cryptocurrency incurred by private individuals with Hungarian residency.

The new rule is applicable in case of trading and mining any type of cryptocurrencies and there is no set maximal threshold, for which the flat tax can be applied. However, the private person has to be resident in Hungary from tax perspective to declare the tax with the low tax rate. The new rule is applicable for incomes incurred as of 2022, however, it can be also used for incomes incurred earlier than 2022 due to the governmental purpose to whiten incomes from crypto sources.

The taxation point is the moment, when the cryptocurrency is converted into FIAT currency. Crypto to crypto changes are not subject to tax.

The tax rate applicable is only 15%, and besides of the low rate of personal income tax from cryptocurrencies, there is no social contribution or further contribution. Moreover, there is no need to establish a sole entrepreneurship to declare crypto income in accordance with the new rules.

As mentioned above, the new flat tax rate is very favorable within the EU, which might motivate many European citizens to become resident in Hungary. It must be checked from several aspects, whether a foreign private person can be identified as Hungarian resident. Once the conditions are met, and a person is considered as tax resident in Hungary, the 15% flat tax can be applied for all the income from cryptocurrencies.