Double taxation - UK and Hungary

lanchutt

Hello everybody,

I would love some advice from anybody here regarding tax.

I am moving to Hungary in the new year but will be working online for a UK company and will not be earning income from a Hungarian employer. I will be a resident for tax purposes and will need to submit a self-assessment to the tax office. I can also have one set of tax offset against another.

What I am confused about is how the UK and Hungarian governments decide who much tax I will pay and to whom.

The tax rate in Hungary is much higher and I will be in the 36% income tax bracket which ia considerably higher than the bracket I would be in the UK. Or does anybody know if there is a different calculation rate? Obviously i would prefer to pay the UK rate but rhat decision is not up to me.

Many thanks for any advice it really would be appreciated as I called the tax office and the guy in the call centre didn't have a clue!

fengirl_2

Where will you be resident for tax purposes? If you are UK resident, then I dont think the Hungarian authorities will be interested and you will pay tax in the UK. If you are resident in Hungary, you wont be liable to UK tax on incoem arising there.

lanchutt

Hi fengirl,

Thanks for the reply. I will be a resident eventually, as I would like to buy an apartment out there. I am guessing I will have to pay Hungarian tax then?

jennifernil

If it works the same way in Hungary as here, then this may help.....

OH is resident here, he is working from home mainly doing paperwork for a Norwegian company. He is paid directly from Norway (with whom UK has a double taxation treaty), and has to pay tax in UK on all his earnings.

Against this he can set any tax he has to pay in Norway, but only up to what the equivalent tax here would have been. He is only taxed in Norway on work actually done in Norway, so luckily not a huge part of his income.

He submitted his return here in October, still waiting for a reply!

So in your case you substitute Hungary for UK, and UK for Norway.

This would mean you are stuck with paying Tax in Hungary.

ebyard

Having dealt with Hungarians for many years, one thing I can tell you is the level of corruption is mindboggling. Hardly any of my Hungarian pals pay any tax. A lot of people are paid in cash or just don't pay tax full stop, some channel it out in companies, there are many ways around it.

If you are working for a UK company, personally I would keep resident status in the UK and pay UK tax. It will make life MUCH eaiser - unless you speak fluent Hungarian?

When you buy an place out there, you will have to pay their taxes (unless you give your agent/government official a backhander and then they all magically disappear). I cannot emphasise enough the level of corruption from the bottom to the top over there.

It truly is astonishing. I don't support or partake in any of it, mind you!

lanchutt

Wow thanks for the advice. My boyfriend is Hungarian so I would be spending more than 183 days there a year and he can do any translations for me. I wonder if there is anyway I can get round this, but as I am not corrupt I would prefer it to be legal!I guess leaving the country once every 6 months will not help as I would want to go back again.

I can afford to buy apartment there in cash with savings etc and I like it in Budapest but I guess I will have to weigh up to pro's and cons.

jennifernil

If you do not need to have all your wages sent to Hungary, as a UK citizen it may be possible to be paid here and just get what you need sent over to Hungary.

Here this is called the "remittance basis" and you are taxed on what you bring in. Maybe Hungary operates something similar.

It does make things pretty complicated however. OH is Norwegian and still domiciled in Norway, so he could probably do that, but we prefer to have the money here!