Refund to non-resident private individuals of tax deducted on income not subject to return obligation

If the rate of tax deducted from a non-resident private individual is higher than the tax rate applicable under a relevant international agreement, the non-resident private person may file with the state tax authority, submitting a certificate of their residence as well as a certificate issued by payer, an application for tax refund. 

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 Large Taxpayers Tax and Customs Directorate (1077 Budapest, Dob utca 75-81.)

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). 

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.