jurisdiction

1. Is there a specific tax regime for carried interest in your jurisdiction?

No.

2. What is the applicable tax treatment?

Hungary does not provide for a specific tax regime for carried interest.  To the extent carried interest reflects the intellectual contribution of the investment manager, it may be treated, for Hungarian tax resident individuals, as income from independent activities under Act CXVII of 1995 on Personal Income Tax. Such income may be subject to 15% personal income tax and 18.5% social security contribution and, in addition, 13% social contribution tax may apply on top of the gross amount of the payment.   Verified costs or, alternatively, a 10% flat-rate expense deduction may be taken into account against the carried interest fee.  Unless the income originates from a Hungarian fund acting as payroll agent for the income, the relevant taxes must be declared and paid to the Hungarian tax authority by the private individual.

3. Under which conditions are the regime applicable?

As Hungary does not have a specific carried interest regime, no carried interest-specific statutory conditions are identified.

4. Who are the beneficiaries?

No specific class of beneficiaries is identified under a dedicated Hungarian carried interest regime.

5. Which types of funds are concerned?

No carried interest-specific limitation is identified by reference to the type of fund.

6. Is carried interest subject to social security in your jurisdiction?

Yes. To the extent carried interest is treated as income from independent activities for Hungarian tax resident individuals, the income may be subject to 18.5% social security contribution. In addition, 13% social contribution tax may also apply on top of the gross amount of the payment.

7. Any other key information? 

No.