Globe-Trotting Sportsman Or Entertainer: Hungary

A Hungarian citizen with extensive, international, multi-sourced income is not in a good tax situation unless he or she can establish non-residence, since full, world-wide taxation of income and capital gains will apply.

If resident in Hungary, the peripatetic professional may well find himself paying withholding tax in a number of countries which cannot in some cases be reclaimed or set off against Hungarian taxation because of the absence of a tax treaty.

Such an individual will almost certainly resort to corporate structures to market his or her skills and manage derivative income flows. It may well be that these can usefully be based in offshore jurisdictions, although complex structures may be necessary if corporate anti-avoidance rules are to be avoided.

Apart from the extra difficulty of minimising tax on the income side, a Hungarian-resident sportsman or entertainer will be in the same position as any other Hungarian resident. (Select 'High-Tax Country Resident' and 'Hungary' for a fuller description).

Non-Hungarian tax residence often has to be proven by means of a certificate issued by the competent tax authority in the country in question. An individual may have a residence permit or administrative residence in a country and yet not be deemed to have tax residence there. Hungarian tax treaties normally include 'tie-breaker' wording to resolve possible cases of dual tax-residence.

If a foreign sportsman or entertainer becomes Hungarian resident, then he or she is in the same position as an expatriate executive (select 'Expatriate Executive' and 'Hungary').

Such individuals who have significant business income may be able to make use of offshore corporate tax shelters in order to minimise Hungarian taxation.

www.lowtax.net contains details of the offshore business sectors of 50 jurisdictions, and their taxation.

NB: The suggestions given above do not constitute investment advice. They are intended only to assist individuals in finding appropriate professional advice, which is essential for anyone planning offshore investment.