Finance Minister Mihaly Varga revealed in a Facebook video that Hungary would lower the rate of tax on cryptocurrency earnings by 50%. This move would lower the tax on earnings to 15% from 30% and place cryptocurrency tax at the same rate as stocks.
Varga’s comments in the video outlined the plans for Hungary’s economic recovery, which included the updating of taxation regulation. Varga commented on the proposed plans, stating that it “could bring in billions of Hungarian forints to the budget”.
The decision to lower tax on cryptocurrency earnings is a significant move by the country, and a statement from the Hungarian government that positively targets cryptocurrency traders and investors.
While other countries scramble to create appropriate cryptocurrency regulation, Hungary has been relatively crypto-friendly as part of a wider effort to boost its covid-hit economy. Until last year, Hungary had no specific regulation on the taxation of cryptocurrency income. As it currently stands, the buying and selling of digital assets is classified as “other income” from a taxation standpoint.
In terms of the popularity of cryptocurrency in Hungary, the nation has relatively modest trading activity. However following the recent news from the Hungarian Government, it is likely that the levels of cryptocurrency activity will experience a sharp uptick as traders and investors stand to benefit from the favourable tax rate.
As the majority of major economies around the world start to prepare central bank digital currencies, Hungary has also begun to discuss the potential rollout of their own CBDC. They recently joined a number of countries at a roundtable discussion to outline the future of CBDCs.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.