The obligation to pay taxes must be determined by the payer, but the actual tax liability rests with the individual.
Therefore, the tax on dividends affects the private individual, regardless of the fact that the responsibility for withholding, declaring, and paying the tax lies with the paying company. Section 3 (5) of Act LII of 2018 refers back to Section 1 (5) c), which essentially states that the tax liability exists for the individual, meaning that social contribution tax (Szocho) must be deducted from the dividend payment to the individual.
Dividends are accounted for as follows:
Personal Income Tax (PIT) – 15%, calculated based on the amount of the dividend. This must be paid by the individual, meaning the payer must withhold the calculated amount, declare it, and pay it to the authorities.
No reduction options are available regarding PIT.
Social Contribution Tax (Szocho) – 13%
There is also a Szocho liability (even in the case of pensioners) related to the payment of dividends.
However, a payment cap applies, which is 24 times the current minimum wage.
If the individual reaches this cap on an annual basis, then no Szocho payment is required. If the individual only partially reaches this level (i.e. their annual income does not reach 24 times the minimum wage), then the Szocho liability arises only on the difference.
However, all income on the individual’s side that is subject to PIT (personal income tax) counts toward this exempted threshold — such as rental income or capital gains. Excluded from this threshold are separately taxed incomes for which the individual is responsible for paying the tax themselves.
Another possible solution is that the individual provides a written declaration to the payer stating that their annual income reaches or exceeds 24 times the minimum wage. The payer is not obligated to verify the content of this declaration. If such a declaration is provided, the payer is not required to withhold Szocho. This also means that the individual becomes responsible for accounting and paying the Szocho themselves.