Personal income tax donation: redirect 1% of your PIT to an NGO

Do you have taxable income in Hungary? If yes, you can choose to donate a small part of your taxes to charitable causes. What is best, this is a donation that does not cost you any extra money, since you pay the same amount in taxes, while you can specify who gets to spend it. People colloquially talk about “the 1%”, but it is in fact 1+1%, with 1% of your personal income tax offered to an NGO, and another 1% to a church.

When and how can you donate your 1+1%?

All private individuals have the option to donate 1+1% of their income tax when filing their yearly tax returns, for which the deadline is always 20 May of the following year. The donation form itself is right next to your tax returns, but not an integral part of it, so you can file the tax returns and submit the donation form separately – just make sure to take care of both by 20 May.

Both filing your tax returns and filling in the 1+1% donation form is possible online, through the tax section of the official e-administration portal (called Ügyfélkapu in Hungarian, sometimes referred to as the Client Gate). If you prefer the old-fashioned way, you can also do your tax returns on paper. If you have taxable income, just select who should receive that 1+1%, and the National Tax and Customs Administration will take care of the rest. In either case, your donation is anonymous by default, but you can indicate in a separate box if you allow the Tax Authority to share your name with the beneficiary.

Of course, you may decide to skip the donation entirely. In this case, 100% of your taxes will go to the state. But why not to take an opportunity to support a good cause when it is so simple to do so? If you need inspiration, take a look at the NGOs the Helpers team supported last Christmas.

Which NGOs and churches are eligible to receive income tax donations?

You can donate 1% of your income tax to an NGO and another 1% to a church (while some budget programs are also eligible for this second 1%). This way you cannot really donate 2% to the same beneficiary, it must be two separate entities. If you fill in the donation form online, the available organizations and churches can be selected from a dropdown menu, but you can also start typing their name or simply add their tax number. If there is an NGO you like, it is best if you check with them if they are eligible (e.g. on their website or by calling them over the phone), since the dropdown list is almost endless: as of today, there are over 31,000 NGOs and over 130 churches in Hungary to choose from. (You can click on the numbers for the respective lists.)

Quite a few noble causes, right? With so many options, it is natural to wonder about how the money will be spent. However, there is no reason to worry: beneficiaries must comply with strict regulations when spending the money received from personal income tax donation. If the Tax Authority finds that their spendings are not in line with the regulations, they will lose their eligibility to receive income tax donations.

Need help with your tax returns? Contact an expert!

When filing your yearly tax returns, you can offer 1% of your income tax to an NGO and another 1% to a church. This is a very simple way of donating to a noble cause, it can be done online, and only takes a few clicks.

If you would like to know more, contact your English-speaking accountant at Helpers Finance for a detailed breakdown of how income tax donations work. You can learn more about our accounting services here, or you can follow us on Facebook to never miss a new article. You can ask for a consultation by calling our office on +36 1 215 0712, by e-mailing info@helpersfinance.hu, or by filling in our contact form.

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