Country overview

#67

Hungary

Country stats

Rating Points

155

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

1.3%

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

126 100

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

Legally allowed

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

No regulation

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Moderate danger

The overall level of security in a given country based on open data.

Crypto Salaries

No info

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

No info

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

None

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

Crypto-to-crypto

This license type allows VASP to provide legal exchange from one cryptocurrency to another.

Crypto-to-fiat

This type of license regulates the exchange from cryptocurrency to fiat.

Wallet/Custody

This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.

Good

Medium

Bad

intro

Hungary is a medium size country on the East of Europe. In the country, only one percent of the population owns cryptocurrency. However, there is a basic EU crypto regulation there. Also the country has relatively low tax rates.

Security level

Hungary has a moderate danger security level according to our rating. Jurisdiction has 66.2 points (from 100) for safety level in Numbeo crime rating (1). The homicide level (2) is 0.9 per 100,000 inhabitants a year. Level of firearm-related death (3) 0.02 per 100,000 inhabitants a year.

Crypto Payments

Currently, there are no laws that specifically regulate crypto payments in Hungary, nor is any (4) cryptocurrency recognized as a legal tender.

Crypto Salaries

Paying salaries in cryptocurrencies still has no regulation in the country.

Legal

There are two main regulators: the Central Bank of Hungary and the Local Tax Authority (NAV).

The Central Bank of Hungary has a conservative (5) approach to crypto assets according to the governor’s statement:

“I perfectly agree with the proposal and also support the senior EU financial regulator’s point that the EU should ban the mining method used to produce most new bitcoin. It is clear-cut that cryptocurrencies could service illegal activities and tend to build up financial pyramids.”

From a tax perspective, in 2021, the Hungarian Parliament adopted (6) Act No. LXIX. of 2021 on the amendment of certain tax laws, which, inter alia, legalize the personal incomes derived from executing transactions using cryptocurrencies.

As part of the legislative harmonization procedure, the Hungarian Parliament amended Article 6 of Act CXXXVIII of 2007 on Investment Firms and Commodity Dealers, and on the Regulations Governing their Activities, clarifying that regularly conducted business activities regarding DLT financial instruments shall be deemed as investment services activities and therefore such activities can only be conducted after obtaining the necessary license issued by the CBH.

Taxation

The headline PIT rate is 15% based on PWC (7). Headline CIT rate is 9%. CGT tax rate is the same as PIT. As of January 1, 2022, the income of individuals from crypto asset transactions will be considered separately taxable income (8). This means that a tax of 15 percent must be paid on the income, the certified costs of the current year can be accounted for, and tax equalization can also be applied. The tax must be declared and paid annually in the tax return.

Links

1)👉🏻Crime Index by Country 2023 Mid-Year

2)👉🏻List of countries by intentional homicide rate

3)👉🏻List of countries by firearm-related death rate

4)👉🏻Cryptocurrency Regulations In Hungary. Article

5 and 8)👉🏻Cryptocurrency transactions are taxed based on new rules. Article

Global Legal Insights. Hungary

7)👉🏻PWC Tax Summaries. Hungary

Articles

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