As you may know the fiscal year in Hungary runs in line with the
calendar year from January to December. The deadline for submitting tax returns
however is the end of May of the following year. However in Tower compiling information
and making the relevant calculations starts well in advance.
Unlike any other management firm in Budapest Tower took the step to hire chartered accountants to work within the company to handle landlord’s accounting and tax affairs in Hungary. This has benefited owners greatly by both significantly reducing the tax liability and by providing high level representation on tax affairs in Hungary.
Tower reduces landlord’s tax liabilities by submitting taxes according to the more thorough itemized return method. This means that for both companies and private individuals we off-set expenses such as management fees, finder’s fees, repairs, furnishing, flights to Budapest and significantly depreciation which is at least 3% of the original purchase price of the property each year as a cost. (The depreciation rule was introduced in 2011) To submit depreciation the accountant, Tower in this case, must have full visibility of the occupancy rates of the property throughout the year. This requires an efficient relationship between the accountant and management company. Luckily in Tower we have fully integrated systems to make this very straightforward. On average Tower saves between 300,000 and 400,000 euros in tax each year for overseas landlords.
Aside from submitting the returns we are happy to provide
year round representation for landlords. This has helped various landlords who
have had issues or indeed tax penalties coming from other accountants.
At Tower we have visibility of most landlord expenses for the fiscal year,
however if you have made any trips to Hungary or personally bought items for
the property please send us the following details:
- An invoice or receipt with the property owners name on it
- Flight confirmation details
- Details of any repairs, furnishing or maintenance jobs that you have personally organized.
And a new benefit this year is that if you yourself are a tenant in another
state you may be able to also off-set this as a cost in Hungary.
To each of our accounting clients we will be sending a tax calculation within
the next couple of weeks.
For further details on our tax and accounting service please contact us
directly.
Source www.towerbudapest.com
