Waberer International : Divident tax information for private individual shareholders

Divident tax information for private individual shareholders

This information letter is intended for shareholders of WABEBER'S INTERNATIONAL Nyrt. (Waberer's or the Company) who have received dividend payments on their Waberer's shares in the year 2023.

As it was earlier stated by our Company in its dividend announcement and in the tax certificate sent to you after the dividend payment, the dividend is not subject to social contribution tax.

However, the draft personal income tax return prepared by the National Tax and Customs Administration for the year 2023 includes the social contribution tax provision for our shareholders. The reason for this is that it was not indicated in the monthly tax and contribution return following the payment of the dividend that the amount of the paid dividend was related to shares listed on the stock exchange in an EEA State.

As a rule, natural persons are liable to pay social contribution tax on dividends under Act LII of 2018 on Social Contribution Tax until the maximum taxable amount is reached.

However, the legislation exempts from social contribution tax the natural persons who receive dividends on European listed securities.[1]. Regarding the fact that Waberer's shares are listed on the Budapest Stock Exchange, the Company's shareholders are not subject to social contribution tax on the dividend income received from Waberer's.

However, the National Tax and Customs Administration has no information that the dividend paid and declared by Waberer's in 2023 is a dividend on an EEA listed security, so the dividend amount has been automatically placed in the dividend category subject to social contribution tax in the draft personal income tax return.

Our company will enquire from the National Tax and Customs Administration to correct the data. However, we are technically unable to amend the draft income tax returns which are already prepared and made accessible by the National Tax and Customs Administration for the year 2023.

We kindly ask our shareholders to check their draft 23SZJA return prepared by the National Tax and Customs Administration before submitting it and to correct the data as follows.

From 15 March 2024, all taxpayers are able to access their draft tax return electronically (e.g. with a client gateway) on the eSZJA portal (www.nav.gov.hu/szja/szja). If You do not check and correct the information in the draft tax return by 21 May 2024, the draft will automatically become the final tax return.

The National Tax and Customs Administration has indicated in the draft tax return the amount of income to be taken into account when calculating the taxable income limit for the assessment of social contribution tax, based on the data from the monthly tax and contribution returns.

Line 286 of the draft tax return contains the amount of income included in the consolidated tax base and line 287 the amount of income taxed separately. Based on the data from these lines, the program calculates the base and the amount of social contribution tax on separately taxable income up to the taxable ceiling in line 288 ^[2]..

Individuals who earned dividends from listed securities in an EEA Member State in 2023 and whose consolidated taxable income did not exceed HUF 5 568 000 must amend their tax return draft on the basis of the paying agent's certificates as follows.

For example, a pensioner who, in addition to his pension, only received dividends from Waberer's shares traded on the Budapest Stock Exchange in 2023 and had no other taxable income, will have to amend his tax return.

The dividend amount in line 287 can be deleted from the draft 23SZJA return available on the eSZJA website, in which case the program will also delete the data from line 288, because the individual is not subject to social contribution tax.

Alternatively, the amount on line 287 should be left unchanged and zero should be entered in line 288 (social contribution tax payable by the individual) or line 289 (tax deducted by the paying agent).

If only a part of dividend received in 2023 is a dividend on an EEA listed security, and the other part is, for example, a dividend paid out of the profits of a company, or if the individual has also earned a capital gain, the draft will also need to be amended.

Of the income included in line 287 that counts towards the taxable income limit, only the income on which the individual is actually liable to social contribution tax up to the tax ceiling should be entered in line 288.

For example, if line 287 of the draft contains HUF 2 000 000 of income, but only HUF 800 000 of that is dividend income on which no social contribution tax is payable, then in line 288 you must enter HUF 1 200 000 as the taxable amount and HUF 156 000 as the tax payable, i.e. 13% of the taxable amount.

Individuals who do not have access to the client gateway (ügyfélkapu) cannot make changes in the draft paper based document sent by the National Tax and Customs Administration, they must submit the amended tax return on form 23SZJA.

This announcement is published in Hungarian and English. The Hungarian version shall prevail in case of any discrepancy between the two versions.

[1] Individuals do not have to pay social contribution tax on dividends (dividend advances) paid on securities listed on a regulated market in any Member State of the European Economic Area (EEA) that are recognised under the Capital Markets Act and that are considered as dividends under the legislation of that Member State.

[2] https://nav.gov.hu/ado/szocialis_hozzajarulasi_ado/A_tozsdei_ertekpapir_20210407_ref1

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