What are all those 1% billboards about?

Personal income tax returns by 20 May

In Hungary, personal income tax must be reported and paid for each year by 20 May the following year (or the next working day: in 2023, this is 22 May, Monday). If you are working in employment in Hungary, you do not have to pay anything, since your employer already deducted taxes from your salary each month before paying you. The Tax Authority has all your relevant data too, so reporting really means logging in to the portal at eszja.nav.gov.hu, checking if all data are correct, making adjustments as necessary, and hitting the Submit button.

So what about that donation?

What happens to your taxes is normally decided by the government. It will be spent on building roads, paying the salaries of government officials, developing online infrastructure for paying taxes, or other projects that are supposed to make our life better. About this, you can only decide indirectly, by casting a vote at the general elections (if you are a citizen).

At the same time, you can directly decide what happens to 1+1% of your personal income tax, even if you are not a citizen. Next to the reporting form, there is another form that lets you redirect 1% of your personal income tax towards an NGO of your choice, and another 1% towards a church of your choice. As a result, NGOs and churches that are licensed to receive your 1% do their best to make themselves known around this time – meaning you will see billboards, TV spots, and all kinds of advertisements asking for your 1%.

Remember, this 1% donation is not something you actually need to pay. You have already paid your personal income tax (or rather, your employer has paid it on your behalf), so now you are just redirecting it, exercising direct control over some of your taxes. And even if 1% does not seem much, consider that you are probably not the only person redirecting it towards a specific NGO, and it all adds up.

Who can get that 1% donation?

You can donate 1% of your personal income tax to one NGO and one church. Not every NGO is eligible for the donation; usually you can find information about this on the website of the NGO of your choice if it has one. Alternatively, you can call them and ask. Ultimately, the database of the Tax Authority will be what matters. When you are filling in the form, you can search the database right on the form. You can also type the tax number of the NGO on your own; if the NGO is not eligible, you will get an error message and you can choose another recipient.

The form works very similarly for churches, with the difference that churches do not have a tax number but a “technical number”, and that is what will be indicated on the form.

If you need ideas where to donate, just get some inspiration from the billboards you see all over the place. Alternatively, you can also check which NGOs we chose to support during our charity drive last Christmas: you can read all about it here. Whether you prefer supporting animal shelters, elderly care, education, or any other type of work handled by NGOs, you can surely find an organization to your liking.

What if I don’t want to donate my 1%?

Naturally, you may also decide not to fill in the form, and this way abstain from exercising your right to decide what should happen to your tax money. In that case, your 1% will simply be added to the government budget, and used to cover various expenses of the state. There is no penalty related to this; donating your 1% is a right, not an obligation. However, it would be a pity to miss out on a chance to support a good cause at no cost to you, especially as it takes only a few extra minutes when submitting your yearly tax returns.

Support a good cause at no cost

You still have a few weeks until you must submit your yearly tax returns in Hungary. Now you get the chance to decide directly what happens to your taxes (or at least, to a part of them) by choosing an NGO and a church to support with your 1%. The form is available at the same online portal as your tax returns form, and it can be filled in together with it, or any time later (by the 22 May deadline).

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