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How can you determine the recipient of 1+1 percent of your taxes?

25 April 2019

 

Private individuals continue to have the option of giving instructions on how 1+1% of their personal income tax paid on the overall tax base will be spent.

The recipients can be selected from two groups; but only one from each group, meaning that the entire amount cannot be paid to a single recipient.

One of the groups includes registered non-governmental organisations. A list of these NGOs, together with their tax number, is available on the tax authority’s website:

https://www.nav.gov.hu/nav/szja1_1/regisztralt_civil_kedvezmenyezettek_2019

The other group includes 31 churches that have a tax identification number, plus an earmarked fund. The funding objectives of the earmarked fund are determined by the Parliament in the budget act pertaining to the relevant year. In a departure from previous practices, taxpayers have been able to offer 1% of their taxes to only one earmarked fund, known as the National Talent Programme since 2011. The relevant tax identifier numbers are also available on the tax authority’s website:

http://nav.gov.hu/nav/szja1_1/technikai_szamos_kedv

You are not required to offer your taxes to both groups and you can choose to give directions on the payment of only 1% of your tax.

If you choose two recipients from the same group, your offer will be invalid and neither will receive the money.

You can offer the 1+1% when you submit your tax return, but you can also do it separately. If you have an account with the online government portal known as Ügyfélkapu (or Client Gate), the simplest solution is to submit your declaration electronically with the help of:

  • an online personal income tax application on the tax authority’s website (where the tax authority’s draft version of your tax return is also available)
  • the tax authority’s tax return software (ÁNYK), by filing out the form entitled EGYSZA, or
  • the tax return software, by filing out the form entitled 18EGYSZA.

In a hard-copy form, the declaration can be submitted by post, or at the tax authority’s client service centres personally or through an authorised representative in a sealed envelope:

  • together with the personal income tax return, by filling out the EGYSZA form
  • in a declaration filled out on tax authority’s online application and then printed out,
  • in the 18EGYSZA form or in a declaration that includes the same information, or,
  • if your employer agrees to collect the declarations, by giving the declaration to your employer in a sealed envelope on or before 10 May 2019. (You will have to sign the envelope across the seal flap and the bottom flap).

It is important to note that the 20 May 2019 deadline is preclusive. This means that if you give instructions about the 1+1% of your personal income tax after this deadline, the instruction will be invalid and you cannot request an extension of the deadline. Your instruction will only be valid if you pay your personal income tax.

Starting from 2018, the 1% offered to a church in a year will be automatically treated by the tax authority as being offered again in the following year. So as long as you do not want to change your decision, you do not have to submit your declaration about the offer to the same church every year. In other words, a valid declaration in which the 1% was offered to a registered church with reference to its tax identifier number will be taken into account by the tax authority until you state another recipient with an identifier number or you revoke your declaration. If you do not want to take advantage of this option, you can choose to submit your declaration about your offer to a church in each year.

This automatic solution does not work in the case of NGOs or the earmarked fund. The offer must be made for the benefit of NGOs and the earmarked fund every year, as the tax authority can take it into account only once, in the year in which it is made.

You can also note your decision in your 1+1% declaration that the tax authority should inform the recipient NGO about your name and contact details. Your consent to the processing and disclosure of your data is voluntary and is not required for your declaration to be valid.

Andrea Erős |