Gambling organizers, including operators of gambling money-winning machines, pay game tax in accordance with the following rules: Gambling organizers assess, return and pay game tax on their own initiative (self-assessment). Game tax is treated as an expense for accounting purposes when the entrepreneurial profit tax is calculated. The tax duty regarding other taxes and fees is determined in accordance with other respective tax laws. The Act on the Rules of Taxation shall apply to issues related to taxation, but not otherwise regulated in the Act on the Organization of Gambling. Corporation tax in Hungary is currently fixed at 16%.
Game Tax on Draws, and Totalizer-Type Bets
With the exception of those cases where a state licence is not required for organized draws not organised on a continuous basis, if draw tickets are sold exclusively among those present at the place of drawing, the number of draw tickets issued is not in excess of 1000 pieces, or the total value of these tickets is not in excess of HUF 50,000 and the total value of prizes calculated at market value, or the amount of cash to be drawn, exceeds 80% of the total value of the draw tickets issued, the game tax on non-continuous raffle draws is 16 per cent of the prize-pool.
(The prize-pool of the draw game shall be the total amount of the sales price per ticket multiplied by the number of tickets sold. With respect to continuously organized gambling activities, the value of the prize-pool is calculated by multiplying the number of the tickets issued to participate in the game by the sale price as approved in the game plan. With respect to lottery games, the purchase price of validated lottery tickets paid by the players to enter the game during a given month is deemed to be the prize-pool for that month. The betting prize-pool equals the total of sums wagered.) The game tax on drawing games (instant ticket) equals 30 per cent of the monthly proceed; the game tax on lotteries, 24 per cent of the monthly prize-pool; the game tax on bingo games, 7 per cent of the monthly prize-pool; and the game tax on joker games, 17 per cent of the monthly prize-pool. The game tax on keno is 24 per cent of the net monthly proceeds.
The game tax on continuously organized totalizer-type betting is 17 per cent of the monthly prize-pool, and 17 per cent of the prize-pool for non-continuous totalizer-type bettings.
The sums refunded during the month for invalid bets are deducted from the net gambling proceeds of bookmaker type of betting. The game tax on bookmaking is 20 per cent of the net gambling proceeds reduced as described above.
The drawing games described above and the gift drawing games and also the domestic horse and / or greyhound betting are exempt from paying game tax.
Game Tax on Money-Winning and Gambling Machines
game tax on gambling money-winning machines, with the exception of the gambling money-winning machines operated in casinos, is 100,000 HUF per month, per location. The game tax is payable for each month or fraction thereof.
game tax on a money-winning machine already paid may not be applied to another money-winning machine even if the first machine ceases to operate, for whatever reason, nor may if be reclaimed or refunded on any legal grounds, unless the Gambling Supervisory Authority has established that:
- a) the money-winning machine was destroyed or became permanently out of order; or
- b) operation in accordance with legal rules is not possible.
The provisions of the Act on the Rules of Taxation apply to the game tax on money-winning machines with the following differences:
- a) the organizer of gambling activities must file a game tax return monthly;
- b) the payment of game tax is due simultaneously with the return;
- c) no instalment or deferred payment is permitted in connection with the game tax on money-winning machines.
annual tax on gaming (amusement) machines is 60,000 HUF per machine. Operators of gambling machines must declare and pay the tax applicable semi-annually, prior to the submission of the application for the semi-annual registration of the machine. Evidence must be provided of proof of payment with such application.
Game Tax on Casinos
The game tax on casinos, including the money-winning machines operated therein, is 30 per cent of the net gaming revenues if the net game revenue achieved in the fiscal year is 0 to 5 billion HUF ; 1 billion and 500 million HUF plus the 25% of the amount over 5 billion HUF if the net game revenue is between 5 billion and 1 HUF and 10 billion HUF; and 2 billion and 750 million HUF and 10% of the amount over 10 billion HUF from 10 billion and 1 HUF.
The net game revenue is increased with the accepted tips in that month.
– Act XXXIV of 1991 on the Organization of Gambling
– Act XVI of 1991 on Concessions
– Act XV of 2003 on the Prevention and Combating of Money Laundering
– Decree No 32/2005 (X.21) PM on the regulation of the Authorisation, Organisation and Control of Certain Gambling Activities
– Government Decree No. 4/1997 (I.22.) Korm. on the Operation of Business Establishments and the Conditions for Conducting Domestic Trading Activities
– Act CXVII of 1995 on Personal Income Tax
– Act XCII of 2003 on the Rules of Taxation
– Act LXXIV of 1992 on Value Added Tax
According to the Act XXXIV of 1991 on the Organization of Gambling
the gaming activities are divided between liberated and non-liberated activities. The non-liberated activities with the objective of organizing and operating gambling can take place only based on concession contract which must be concluded according to the Act XVI of 1991 on Concessions or by the individual approval from the Minister of Finance to the state gaming operator, an economic operator that is owned outright by the state gaming operator or that is in a majority state ownership.. The following shall qualify according to the Act XXXIV of 1991 on the Organization of Gambling as activities aiming at the organization of gambling activities defined in the Act XVI of 1991 on Concession:
- a) organization of drawing games,
- b) operation of money-winning machines,
- c) foundation and operation of an organization to arrange gambling activities (casinos),
- d) activities aiming at the organization of horse-race bets and other gambling activities not coming under paragraphs a) to c), but defined as gambling organization activity in the Act on the Organization of Gambling.
From among the activities defined in paragraph a), the activity defined in Section 16 of the Act
(I.e. not continuously organized draws, if draw tickets are exclusively sold among those present at the spot of drawing, and a) the number of draw tickets issued is not in excess of 1000 or their total value is not in excess of 50,000 HUF and b) the total value of prizes calculated at consumer price, or the amount of cash to be drawn, exceeds 80% of the total value of the draw tickets issued.), as well as the activity defined above in paragraph b) shall be liberalized activities. The activity referred to in Paragraph b) may be performed only if the operator is able to acquire a license from the Gambling Supervisory Authority.
The organization of non-liberalized gambling
- a) may be performed by a business corporation that is
exclusively controlled by an economic organization exclusively owned by the State (“state game organizer”) or by a business company excusively owned by the state game organizer or by an economic organization under the majority control of the state, and/or b) the right of exercising this activity may be temporarily transferred by the State to another party in a concession contract (Section 3 of the Act XXXIV of 1991 on the Organization of Gambling). The State game organizer has exclusive rights to organize number games and totalizator-type of betting with the exception of horse race betting and bookmaking.
The public tender for concluding concession contracts is issued by the Minister of Finance. The prior consent of the notary of the local self-government is required for the operation of game rooms, and the Gambling Supervisory Authority must obtain the official oppinion of the notary before the authorization of casino.
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