Economy 31 July 2024, 9:40am

Hungary's OTP Bank will also pass on raised transaction fee

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Following Erste Bank, Gránit Bank and K&H Bank, Hungary's largest lender, OTP, has also announced that it will pass on the higher transaction tax, to be raised by the government on 1 August, to micro and small businesses.

Earlier this month, the government has announced various fiscal adjustment measures to plug in a sizeable hole in the budget, including a raise to the financial transaction tax (FTT).

For those transactions that have already been subject to transaction tax, the tax will change from 1 August:

in general cases (including securities transactions), the levy will be raised to 0.45% from 0.3%, with a maximum of HUF 20,000 per payment transaction (up from HUF 10,000);
the financial transaction tax on cash withdrawals will go up to 0.9% from 0.6%.

In other words, the burden of the normal transaction tax will increase by one and a half times, and it will double for larger transactions, as the upper limit will rise to HUF 20,000 from HUF 10,000.

UNDER THE LAW, THE LEVY IS PAYABLE BY THE BANKS. ALTHOUGH THEY MAY PASS ON THE RAISE TO THE FTT TO THEIR CUSTOMERS, THE LAW STIPULATES THAT RETAIL CUSTOMERS CANNOT HAVE THEIR FEES INCREASED - EITHER DIRECTLY OR UNDIRECTLY - UNTIL 31 DECEMBER 2024.

BiztosDöntés.hu has spotted on Wednesday that OTP Bank joins the ranks of banks that will pass on the increased burden, as OTP has published the conditions to be altered for micro and small businesses. The credit institution will pass on the full hike to its micro and small business customers that have an account package with a special turnover fee (payable on each outgoing transfer):

the turnover fee will be raised to 0.45% (up to HUF 20,000) of the transfer from 0.3% (up to HUF 10,000), and the fee on cash withdrawal will go up to 0.9% from 0.6% for micro and small businesses.
for example, an electronic transfer of HUF 1 million outside the bank for micro and small businesses will cost HUF 1,500 more from 1 August 2024. Cash withdrawals of HUF 1 million will be HUF 3,000 more expensive from the same date.

There are also micro and small business account packages with no turnover fee at the bank, which were available until 3 February 2013. For those with such an account, transfer fees will go up just as much, only not via the turnover fee rather than a general hike. For them, the changes will only take effect from 1 October 2024, according to the notice. Separate account packages apply to businesses larger than small businesses, for which the notice has not yet been updated.