|Population (2016)||9 830 485 (0.00%)|
|EU Status||member since 2004|
|National Currency||HUF (Hungarian forint)|
|Exchange Rate (2017-01-19)||1 EUR = 308.4 HUF|
|Nominal GDP (2015)||108.7 bln EUR (+0.05%)|
|Nominal GDP per Capita (2015)||11 100 EUR (+0.05%)|
|Real GDP Growth (2015)||2.9 % (2014: 3.6 %)|
|CPI, MoM (Sep 2016)||0.2 % (Aug 2016: -0.4 %)|
|CPI, YoY (Sep 2016)||0.7 % (Aug 2016: -0.1 %)|
|CPI, Year Average (2015)||0.1 % (2014: 0.0 %)|
|Unemployment Rate (2015)||6.8 % (2014: 7.7 %)|
|Government Bond Yield (Sep 2016)||2.88 % (Aug 2016: 2.83 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||BBB-||good credit quality, outlook stable|
|Moody's||Ba1||non-investment grade speculative, outlook positive|
|S&P||BB+||non-investment grade speculative|
|Withholding Tax||0.0 - 16.0%|
|Double Taxation Agreements||77 signed agreements|
|Exchange on Request||2 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 04 February 2014, Model 1|
|Financial Market Development||4.0 (max 7.0)||rank: 70th out of 138 countries|
|Banks' Soundness||3.9 (max 7.0)||rank: 114th out of 138 countries|
|Banking Industry Country Risk||7||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Hungarian forint)||Baa2||lower medium grade|
|Foreign Currency||Ba2||non-investment grade speculative|
|Deposit Rates (Aug 2016, HUF)||0.47 % (Jul 2016: 0.52 %)|
|Banking Sector Structure|
|Number of Banks||117|
|Recent Changes (2015)||new banks: 6, closed banks: 52|
|Consolidated Assets (2015)||102.64 bln EUR (+1.39%)|
|OTP Bank||CIB Bank (Intesa)|
|Erste Bank||Raiffeisen Bank|
|K&H Bank (KBC)||UniCredit|
|MKB Bank (Bayerische Landesbank)|
|List of Banks in Hungary|
During the last 11 years EURHUF exchange rate was within the range 231.26 - 317.06, reaching its maximum in Jun 2016 and falling to its minimum in Jul 2008.
According to Eurostat, nominal GDP of Hungary in 2015 was 108.7 bln EUR.
Hungary outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.5% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 2.9% which was above the Euro Area average (1.6%) and above the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Hungary was 11 100 EUR.
Hungary has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -27.4% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Hungary in 2015 expressed as annual percentages of average consumer prices was 0.1% which was above the Euro Area average (0.0%) and above the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Hungary are shown in Table 1.
|Natural person, resident||16.0||16.0|
|Natural person, non-resident||16.0||16.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Hungary signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Hungary and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Hungary signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Hungary and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Hungary signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Hungary has FATCA agreement with the U.S. in effect since 04 February 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in Hungary are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Hungarian financial accounts hold in U.S. financial institutions will be reported to Hungarian authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Hungary is scored 4.0 out of maximum 7.0 and ranked 70th out of 138 analysed economies. Soundness of banks is scored 3.9 bringing Hungary into the 114th place, trustworthiness and confidence of financial market is scored 4.2 (71st place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Hungary is included into group '7' with economic risk scored '7' and industry risk scored '7'.
|Credit risk in economy||very high|
|Systemwide funding||very high|
|Government support assessment||supportive|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Hungary are summarised in Table 3.
|Scheme Participants||all credit institutions operating in Hungary (including branches of foreign banks), branches of Hungarian banks abroad|
|Eligible Depositors||natural persons, legal entities|
|Covered Currencies||EEA currencies|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||HUF|
Table 3. Deposit guarantee scheme in Hungary.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
EEA currencies are all official currencies of EEA members. Switzerland is not a EEA member, but because CHF is the official currency of Liechtenstein, CHF also belongs to EEA currencies.
So, only the deposits made with Hungarian banks in the following currencies are covered by the deposit guarantee scheme of Hungary
|RON||Romanian new leu|
It should be also noted that deposits in non-EEA currencies (for example, USD and JPY) are not covered by the Hungarian deposit guarantee scheme.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Hungarian forint) deposit ceiling for Hungary is set to Baa2 (lower medium grade), foreign currency deposit ceiling is Ba2 (non-investment grade speculative).
Currently there are 117 credit institutions operating in Hungary.
Recent structural changes (2013 - 2015) of the banking sector of Hungary are summarised in Table 4.
|Number of Opened Banks||0||0||6|
|Number of Closed Banks||0||0||52|
Table 4. Recent structural changes in the banking sector of Hungary.
All the credit institutions operating in Hungary can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||7|
The list of the most recently opened banks in Hungary is provided in Table 6.
|AEGON Magyarország Lakástakarékpénztár Zártkörűen Működő Részvénytársaság (new)||August 2015|
|Bank of China Limited Magyarországi Fióktelepe (new)||August 2015|
|DUNA TAKARÉK BANK Zártkörűen Működő Részvénytársaság (new)||August 2015|
|Deutsche Bank AG Magyarországi Fióktelepe (new)||August 2015|
|ERSTE Lakástakarékpénztár Zártkörűen Működő Részvénytársaság (new)||August 2015|
|Polgári Bank Zártkörűen Működő Részvénytársaság (new)||August 2015|
Table 6. The most recently opened banks in Hungary.
There are 7 branches of foreign banks from 6 different countries in Hungary. Table 7 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|