| STEP DIRECTORY – HUNGARY | professional licensed trustee | ad-hoc trustee |
| Type of trust | Revocable, testamentary or inter vivos, discretionary or non-discretionary, private or charity | Revocable, testamentary or inter vivos, discretionary or non-discretionary, private or charity |
| Who can be settlor | Anyone (corporate or private, local or foreign) | Anyone (corporate or private, local or foreign) |
| Limitation of the trustee | No | The ad-hoc trustee is able to manage only one contract |
| Who can be a beneficiary | Anyone (corporate or private, local or foreign) | Anyone (corporate or private, local or foreign) |
| Number of trustees (min.) | One | One |
| Co-trustees | Yes | Yes |
| Citizenship/registration/form of trustee | European Economic Area only, company limited by shares may be a professional trustee | Any nationality or registration, any form, may be individual or corporation |
| Registration of the trust | The trust managed by a professional trustee is not registered by the Central Bank of Hungary, but has a unique tax number. | The trust managed by a private (ad-hoc) trustee is registered by the Central Bank of Hungry and has a unique tax number. The Central Bank must inform the tax office about the registration of the trust. |
| Corporate trustee | Only corporate trustee may be professionally licensed by the Central Bank of Hungary. | The corporate ad-hoc trustee should be:
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| Professional responsibility insurance | Yes, up to EUR4 million (HUF1.5 billion). | No |
| Type of the transferable trust asset | Any (cash, portfolio investment, intangible or tangible asset, rights or claims) | Any (cash, portfolio investment, intangible or tangible asset, rights or claims) |
| Asset separation | Yes | Yes |
| Time limitation | 50 years | 50 years |
| Protector | May be applicable | May be applicable |
| Registered seat | Must be maintained in Hungary | Must be maintained in Hungary |
| Public accessible records | No | No |
| Annual return filing | Yes, with the Inland Revenue Service | Yes, with the Inland Revenue Service |
| Public accessible annual returns | No | No |
| Bookkeeping | In HUF or EUR | In HUF or EUR |
| Audit requirements | No | No |
| VAT number | Not subject of VAT | Not subject of VAT |
| Taxation of the trust income | The trust is a corporate taxpayer. It is subject to 9% CIT, certain (active) income is subject to 2% local business tax. | The trust is a corporate taxpayer. It is subject to 9% CIT, certain (active) income subject to 2% local business tax. |
| Taxation of transfer of assets from the settlor to the trust | According to the Personal Income Tax Act, a transfer of assets is considered as a sale. This means that the settlor must pay tax on the difference between the contract value of the assets transferred and the amount spent on their acquisition. | According to the Personal Income Tax Act, a transfer of assets is considered as a sale. This means that the settlor must pay tax on the difference between the contract value of the assets transferred and the amount spent on their acquisition. |
| Taxation of the capital distribution from the trust to private individuals | Capital distribution is tax free for Hungarian tax resident individuals. In the case of a foreign tax resident individual, the tax rules of beneficiary’s residence are applicable. No WHT on capital distribution in Hungary. | Capital distribution is tax free for Hungarian tax residents. In the case of a foreign tax resident individual, the tax rules of beneficiary’s residence are applicable. No WHT on capital distribution in Hungary. |
| Taxation of the trust’s income distribution from the trust to private individuals | Trust income distribution is treated as dividend and it is taxed with 15% PIT in the case of Hungarian tax resident individual. If the beneficiary is a foreign tax resident individual, WHT may be applicable but the Hungarian DTT network may reduce it to zero. The individual may receive tax credit or tax exemption in the place of her/his residence. | Trust income distribution is treated as dividend and it is taxed with 15% PIT in the case of a Hungarian tax resident individual. If the beneficiary is a foreign tax resident individual, WHT may be applicable but the Hungarian DTT network may reduce it to zero. The individual may receive tax credit or tax exemption in the place of her/his residence. |
| Taxation of the capital distribution from the trust to corporate entities | Hungarian tax resident companies may pay CIT on capital distribution. In the case of foreign entity, there is no WHT on capital distribution in Hungary. | Hungarian tax resident companies may pay CIT on capital distribution. In the case of foreign entity, there is no WHT on capital distribution in Hungary. |
| Taxation of the trust’s income distribution from the trust to corporate entities | Hungarian tax resident companies receive the income distribution tax free. If the beneficiary is a foreign corporation, there is no WHT in Hungary. | Hungarian tax resident companies receive the income distribution tax free. If the beneficiary is a foreign corporation, there is no WHT in Hungary. |