Hungary’s digital currency investors may be eligible for a tax break as part of new stimulus measures planned by the government to boost the country’s competitiveness.
Authorities in Hungary are considering suggestions to reduce the applicable rate of tax on digital currency earnings from 30.5 percent to merely 15 percent, as part of a package of measures aimed at boosting economic recovery following the impact of COVID-19 limitations.
Finance Minister Mihály Varga outlined several policies on the table through 2022 in a recently released video, with digital currency tax measures expected to play a crucial part in making Hungary a more tax-competitive state.
According to sources in Hungary, the government is eager to carve out a position for the country in the European digital currency scene, with measures such as the tax decrease likely to help attract more investors.
Currently, Hungary’s digital currency regulation is less established than that of other countries, with digital asset trading categorized as “other income” for tax purposes. While digital currency trading volumes in the country remain low, activity in 2021 is expected to increase from previous years. The government aims to become a regional hub for digital currency enterprises and investors.
It comes as the country’s central bank continues to work on digital money for the country. Representatives from the Hungarian central bank attended a roundtable conversation in August 2020 with colleagues from the Bank of England, the Swiss National Bank, and other central banks to explore future rollouts of digital currencies.
With much of Hungary’s coronavirus limitations now being lifted, the move in attention to economic recovery is likely to provide digital currency and related sectors a stronger role in the Hungarian economy, with tax benefits expected to stimulate growth.