Hungary to Tax Offshore Assets

| 28 Jan 2013 | 1 Comment

Hungary’s government has announced its plans to obtain information regarding assets held in offshore accounts in a bid to tackle tax avoidance and keep the country’s budget deficit below the EU required level.

In recent reports by Reuters, the Hungarian government has revealed they will ask Switzerland for ‘full disclosure’ to assist them in tracking down offshore assets, the total of which is thought to be worth around $9 billion. It is believed that most of the wealth stored offshore by Hungarians is in Swiss bank accounts making close cooperation between the Swiss and Hungarian governments essential.

Janos Lazar, the Chief of staff for the Hungarian Prime Minister told reporters that the government wishes to impose a tax on all holdings in foreign bank accounts at an average rate of 35% tax.

The need to introduce such a hefty tax is due to the country’s obligation to keep their budget deficit under the EU limit of 3% of GDP.

Hungary aims to tax those hiding their wealth offshore in compliance with the Hungarian tax system, and reports from secret intelligence agencies has led the Hungarian government to believe that the wealth stored in Swiss accounts is substantial.

A complication may arise from the fact that Switzerland and Hungary have yet to enter into an agreement that enables the exchange of information in tax matters. However, this has not deterred the government’s efforts to locate the funds and initiate criminal proceedings for those found guilty of illegally amassing funds abroad.

Last chance

Criminal proceedings will be brought against those found to be storing their money offshore. Reports suggest that a huge 2,000 billion Forints are still deposited in foreign bank accounts.

The government had previously given Hungarians a 2-year tax amnesty between 2010 and 2012 (ending January 1, 2013) to return their assets to Hungary and pay a favorable 10% tax on them. Now that this deadline has ended, the government is not taking a sympathetic approach to those who have not yet expatriated their assets.

The data collection by the Hungarian government does not solely affect individuals holding money offshore; it also affects companies in offshore tax havens. The two primary countries sought by wealthy Hungarians for offshore banking purposes are Switzerland and Cyprus.

 

VN:F [1.9.20_1166]
Rating: 0.0/10 (0 votes cast)

Category: Asset Protection, Hottest Articles

Comments (1)

Trackback URL | Comments RSS Feed

  1. JH619 says:

    An interesting report, thank you

    VA:F [1.9.20_1166]
    Rating: 0.0/5 (0 votes cast)

Leave a Reply