Accounts, insurance, cryptoassets and precious metals – based on the draft

Different assets would require different measures

Section 21 would not impose one market-valuation method on every financial asset. Cash would use face value, accounts closing balances, insurance surrender value, and cryptoassets a qualifying platform price or substantiated market value. Classification would therefore precede quantification: a source acceptable for one asset would not automatically govern another merely because both were financial. The general market-value rule in section 10 would fill gaps only where no specific provision applied.

Valuation would not itself extend personal or territorial tax scope. Under section 4, residents would potentially include domestic and foreign assets, whereas non-residents would include only the specified property, related rights and corporate interests. The existence of an account or cryptoasset valuation rule would therefore not mean every non-resident owner had to include that asset in Hungary.

Cash, account balances and the valuation date

Under section 21(1), cash would be valued at face value. Payment accounts, deposit accounts and similar accounts would use their closing balance on the last day of the tax year. The measure would not be an annual average, the highest balance during the year, or the amount available when filing. Movements during the year would not themselves replace the specified closing-date figure.

The asset position under section 5 and the account rule in section 21(1) would thus share a reference date. Section 25(7)–(8) would require identification of included assets, their calculated values and valuation data, together with retention of supporting records. A foreign-currency account would involve two distinct stages: determining the closing balance and converting it under section 11, rather than selecting an unrelated exchange rate.

Positive values of open derivative positions

Section 21(7) would value an open derivative position at the positive market value reported by the investment service provider, financial institution or clearing house recording it. That figure would have to relate to the final day of the tax year. The focus would therefore be the existing position’s value, not merely the nominal amount of underlying assets or the contract’s description. Positive market value would be the specified calculated value.

Without that institutional figure, section 21(7) would use the amount receivable by the taxpayer on closing the transaction at year-end market conditions. This would not itself authorise automatic deduction of every negative position. Sections 23(8)–(10) would separately address an option obligor, with enforceability, irrevocability and, in some cases, reporting conditions. These provisions could not therefore be read as unrestricted general netting.

Insurance: whose assets would include surrender value?

Section 21(8) would generally attribute rights under insurance contracts possessing a surrender value to the policyholder. Their calculated value would be the insurer’s year-end surrender value. Neither total premiums paid nor a possible future insurance benefit would directly determine that value. The existence of a surrender value would be an express element of this rule.

By exception, section 21(9) would attribute qualifying pension-insurance rights to the insured person, using the same valuation basis. The draft would refer to the Personal Income Tax Act’s definition without reproducing it. Under subsection (10), the insurer would certify the value and currency within thirty days of a request by the relevant person. Under subsection (11), an event-dependent benefit entitlement would not constitute an additional separate asset before the insured event occurred.

Cryptoassets and investment precious metals

Section 21(12) would multiply year-end cryptoasset holdings by that day’s publicly published closing price from a platform on which independent persons regularly traded the asset. Not every published internet price would qualify. Without an appropriate quotation, the taxpayer’s credibly substantiated year-end market value would apply. Section 2, point 21, would refer to the Personal Income Tax Act for the cryptoasset definition without supplying further external rules.

Section 21(13) would value investment precious metals in standardised bars, ingots, plates or wafers by fine-metal content and an internationally accepted reference price published for year-end. Other investment precious metals would use market value. Section 2, point 2, would cover gold, silver, platinum and palladium meeting its substantive conditions. Coins could qualify as investment metal, but would not automatically fall within the multiplication method specified for standardised bars and wafers.

Currency conversion and entry into the tax base

Section 11 would convert foreign-currency amounts using the Hungarian National Bank’s official rate published for the final day of the tax year. Without a publication for that day, the latest preceding published official rate would apply. For currencies absent from its official exchange-rate sheet, conversion would use the Bank’s euro-denominated rate. If several official rates appeared for the same date, the last published would govern.

Under section 6, these asset values would not receive separate tax-free allowances: aggregate assets after deductible debts would form the tax base only above HUF 1 billion. Separately, section 9(1) would apply 1% and 1.5% rates across the HUF 100 billion tax-base band. A treaty departure under section 8 would require a treaty covering wealth tax; an asset’s foreign location alone would not create a general exemption.

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