Year-end assets and currency conversion – based on the draft

Once annually, but not necessarily at December’s end

Under Section 5, liability would arise once annually, on the reference year’s final day, covering wealth existing that day. Section 2, point 33, would generally define the reference year as the calendar year. Together, these provisions would normally produce a year-end snapshot, rather than an average or cumulative assessment of every successive wealth position during the year.

However, Section 2, point 33(a)–(b), would shorten the year where an individual or wealth-management taxable entity ceased to be resident and did not regain residence before calendar year-end. The reference year would run from 1 January through the day preceding cessation. Section 5’s final day could therefore not invariably be equated with the final day of December.

Termination and the scope of taxable wealth would also matter

Section 2, point 33(c), would provide another exception for termination of a wealth-management taxable entity. If the entity, underlying organisation, relationship or segregated estate terminated, or the status ended through full distribution, the reference year would end on the preceding day. This would establish a specific reference date for the wealth position associated with termination.

The date alone would not determine which assets belonged in the calculation. Section 4 would cover residents’ domestic and foreign wealth, but only listed properties, associated rights and corporate interests for non-residents. Section 6(1)–(2) would also tie debts to that same final day, while preserving the different residence-based conditions governing their deductibility.

The reference date would not require a daily market price for every asset

Section 10 would prioritise the draft’s specific valuation provisions. Market value on the final day would apply only where no particular rule determined the asset’s calculated value. Section 2, point 32, would refer to external legislation for market value, with an express exception; this explanation would not supplement the external rules absent from the supplied text.

The wealth date and the period supplying valuation data could therefore differ. Section 21(1) would use closing account balances, whereas subsection (2) would average twenty trading days’ closing prices for specified debt securities. Where some closing prices were unavailable, the available observations would be averaged. The reference-date principle would not displace those specific valuation methods.

Currency conversion would have its own timing rule

Section 11(1) would require foreign-currency amounts or values to be converted into forints using the Hungarian National Bank’s official rate published for the reference year’s final day. This would not be confined to foreign cash: the wording would generally cover foreign-currency amounts arising under the draft. Valuation and conversion would consequently be related but separately regulated steps.

Read together, Sections 10–11 would first assign the amount through the relevant asset-valuation method and then determine its forint equivalent if denominated in foreign currency. A historical acquisition date or date associated with valuation evidence would not itself replace Section 11’s exchange-rate date. A shortened reference year would likewise use its actual final day as the starting point.

Missing or repeated quotations would trigger specified alternatives

If the MNB published no official rate for the final day, Section 11(2) would require the latest official rate published for a preceding day. This would establish a backward-looking substitute, not permit free selection among nearby dates. The later date on which the return was prepared would not thereby become a new conversion reference date.

For currencies absent from the MNB’s official quotation sheet, Section 11(3) would require conversion using the MNB’s published euro-denominated rate. Subsection (4) would select the last publication in time where several official rates appeared for the same day. Missing daily data, an unlisted currency and repeated daily publication would therefore be three distinct situations.

Forint determination would be separate from rounding

Section 25(6) would require both the tax base and tax to be determined in forints. It would also require tax to be reported and paid rounded to the nearest thousand forints. This would not establish a general requirement to round every asset value to thousands during currency conversion. Currency denomination and rounding of reported tax would remain separate requirements.

Section 25(7) would require asset-specific valuation methods and essential calculation data in the return. Subsection (8) would require supporting records to be retained. The reference-date wealth position, particular valuation evidence and resulting forint amount would consequently remain separately verifiable components of the same assessment, rather than information capable of replacing one another.

The initial year and filing dates would remain proposed arrangements

Section 32 would propose commencement on 15 December 2026. Section 35(1) would define that year from commencement until liability arose. Section 35(2)–(3) would permit choices for certain traded corporate interests and debt securities between general valuation methods and methods using the shortened year’s data. These would not be general exceptions to the currency-conversion rules.

Section 25(1) would generally propose self-assessment, filing and payment by 31 August following the reference year, with a return required only where wealth tax was payable. Subsections (2)–(4) would provide particular procedures following death and for inherited assets not yet transferred. Those procedural dates would differ from Section 5’s wealth reference date and would not constitute existing obligations merely because they appeared in the draft.

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