Parliament approves 2013 transactions tax

Hungary's Parliament passed the controversial Financial Transactions Tax Act on Monday. The bill levying a 0.1% tax on transactions - except for those connected to credit - had 249 MPs voting in favor of the proposal vs. 94 against.

Members of the government and the governing Fidesz Civic Party cited the proposed HUF 300 billion action plan for job creation that makes a transaction tax unavoidable. In a subsequent vote, MPs approved a new, universal insurance tax.

The measure also applies to transactions by the National Bank of Hungary and the treasury. From January 1 next year, all bank transfers, collected payments, postal payments, cash payments, and cashing checks will be taxed. The new law puts a cap of HUF 6,000 on the tax per each transaction, however, the cap does not apply to the central bank, the Hungarian Post, or the treasury.