Iranian gold jewellery from the 1300s, with fine filigree ornamentation and a pair of doves, of historical and artistic significance.
Investment gold benefits from favourable tax treatment in Hungary: in addition to VAT exemption, profits on physical gold are subject only to 15% personal income tax.
The most frequently asked questions about taxation following the sale of investment gold
In the article below we have compiled the key facts regarding the Hungarian rules on investment gold taxation. For higher-value gold sales, it is advisable to engage an accountant or tax specialist to assist with preparing your tax return.
How am I taxed after selling investment gold?
Investment gold is classified as movable property. As a Hungarian tax resident, you are required to calculate and declare the tax payable on income (profit) from physical gold investment yourself, in accordance with Section 58 of the Personal Income Tax Act.
The legislation distinguishes three scenarios:
Scenario 1:
You are not required to report the sale of investment gold in your tax return if:
- The total value of movable property you sold in the given year does not exceed 600,000 Ft.
- The income from sales of movable property in the given year does not exceed 200,000 Ft.
The tax on income not exceeding 200,000 Ft (i.e. 30,000 Ft) may be deducted from the assessed tax liability.
Scenario 2:
If you still have the original purchase receipt and can document your other costs, then the difference between the full acquisition cost and the sale price constitutes the tax base, which is taxed at 15%.
Acquisition cost: 1,000,000 Ft Sale price: 1,400,000 Ft Difference: 400,000 Ft Tax: 60,000 Ft.
Scenario 3:
If you no longer have the purchase receipt, then 25% of the sale price constitutes the tax base, which is likewise taxed at 15%.
Sale price: 1,400,000 Ft Tax base: 350,000 Ft Tax: 52,500 Ft.
This calculation is for informational purposes only and does not constitute tax advice.
Is the gold dealer required to report that I sold gold?
Since investment gold is classified as movable property, the sale of investment gold is neither an exchange-traded nor a regulated capital market transaction.
Consequently, the gold dealer does not calculate any profit on the sale of investment gold, does not withhold tax, and does not report the transaction to the tax authority.
I incurred a loss on the sale of physical gold. Can I offset it against my gains?
It follows from the above that, for tax purposes, profit or loss on investment gold has a completely different legal basis from, for example, income from equity investments. The former is a sale of movable property, while the latter is a regulated capital market transaction.
Therefore, losses on investment gold cannot be offset against, for example, gains on the stock market, and vice versa: gains on investment gold cannot be optimised using stock market losses.
How am I taxed if I am a foreign tax resident?
This depends on the country in which you hold tax residency.
At present, taxation of income from investment gold is not fully harmonised even within the European Union, and there can be significant differences between the rules of individual markets.
For example, in some countries gold investment profits become tax-exempt after a specified holding period, while in others certain locally minted investment gold coins may be exempt from personal income tax.
As a foreign (non-Hungarian) tax resident, it is therefore advisable to consult a local tax specialist familiar with the relevant regulations.
