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Rules for Private Accommodation Service in Hungary

By bencel
October 2nd at 3:13am

Private individuals providing private accommodation shall have the option to select itemized flat-rate taxation for the entire tax year provided that the private individual is the holder in title or the beneficial owner of the residential or resort property. If a private individual owns several residential suites or holiday resorts, they can opt for flat rate taxation only if private accommodation services are provided in only one of them. Private individuals providing private accommodation are individuals who provide accommodation - not in the capacity of private entrepreneurs - within the framework of other accommodation service activities in accordance with the government decree, to the same person, for less than 90 days in any tax year. Requirements of accommodation service activities are given in the Government Regulation No. 239/2009 (X.20.) on the Detailed Requirements of Pursuing Accommodation Service Activities and the Rules of Issuing Permits of Operating Accommodation. In defining the concept of accommodation service the Government Regulation cites the provisions on 16 Section 18(1) of the PIT Act 17 Subpoint c) of Point 2 of the Annex 11 Chapter II: The rules of depreciation write-off of the PIT Act 18 Section 47(2) aa) of the PIT Act 19 Section 46(4) of the PIT Act 6 definition by Act CLXIV of 2005 on Trade (henceforward: Act on Trade) according to which accommodation service is a business activity of a non-long term character which provides a place of accommodation for the purposes of stays at nights and recreation and the directly related services. Other places of accommodation – except for hotels, boarding houses, camping sites, pensions, community accommodations – are independent buildings operated not exclusively for the purpose of accommodation, or enclosures of those used also for providing accommodation services, where the number of rooms is eight and the number of beds is sixteen at most. Flat rate taxation can be applied even if the private accommodation service is financed by the payer, the employer and is not paid by the private individual (the invoice is not issued to the private individual’s name). If the number of days of the private accommodation service to same person exceeds 90 days in the same tax year, the flat rate taxation cannot be applied.20 The amount of itemized flat-rate tax is HUF 32,00021 per year for each room, which must be paid even if the private individual opting for flat rate taxation terminates the private accommodation service during the particular year. Where a private individual has legitimately transferred to itemized flat-rate taxation and, due to subsequent changes, lost this eligibility for being unable to meet either criteria, the provisions pertaining to tax liability on income from self-employment activities shall be applied with respect to his proceeds from lodging services received as of the first day of the quarter in which the change took place.22 In this case, the private individual shall pay a prorata amount of the annual itemized flat rate tax amount for quarter or quarters preceding the change.
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