Another bank announces passing on raised FTT in Hungary

MBH Bank has announced

a significant increase in fees from 3 October 2024, to pass on to its business customers the hike to the financial transaction tax from 1 August 2024.

The fee increase also applies to businesses that used to bank with Budapest Bank, MKB Bank and Takarékbank.

Among the larger banks, only CIB Bank and Raiffeisen Bank have not yet announced passing on the higher (and new) FTT to their business customers.

FTT hike

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.

From 1 October, an additional transaction tax on foreign currency conversions will also come into force. If a transaction is carried out by converting between different currencies, this additional levy of 0.45%, capped at HUF 20,000, will be payable on top of the general transaction levy.

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.

Cover photo: Portfolio