Tax on Rent for budapest apartment

E

eddie10

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I have an apartment in Budapest been rented since September of last year. I have an accountant in Budapest since last month and he has done all the relevent tax returns so my affairs are in Order in Budapest. I was under the impression that with te double taxation aggreement betwenn Ireland and Hungary, that my work was done. However, do i still need to fill in forms to show all all details etc and return to the revenue here. I assume i do and if so, what forms?? Thanks In Advance.
 
The double taxation agreement only means that you won't pay tax twice. Your liabilities in Hungary are now covered, but you would need to pay any additional tax due to the Irish revenue.

To give a basic example:
1. Your rental income in Budapest was €4,000, on which let's say you paid 25% (€1,000) to the Hungarian tax authority.
2. You are in the 41% tax band in Ireland, so you will have to pay an additional 16% (€640) of the rental income to the Irish revenue. You can do this on Form 11 through www.ros.ie
 
And you should register for ROS as soon as possible to make sure you are all set up in time as it can take a couple of weeks.
 
Eddie10,

Before you have a panic attack,say for example with the figures from Budapests post (although he is correct in all he has said)you might end up not having a tax liability in Ireland as there may be expenses deductible in ireland before the tax is assessed, e.g if you have a mortgage to finance the Hungarian property the interest(or some of it) can be set of againstyour gross rent,also management fees,depreciation of contents etc... when you set off all allowable expenses you may find that your hungarian tax exceeds your irish tax and therefore nothing extra is payable in Ireland. Somewhere on the revenue website www.revenue.ie
there is a very good guide to tax on rental income which will set you on the right path.

I am getting rental income from hungary in 2007 for the first time and I like yourself am only in the process of getting myself organised with the Irish REvenue but I think what I have said above is correct. I am, as always open to correction to those who know more than me(a very substansial number).
 


This is correct.
 
I agree with the other posters. As you can use deductions in Ireland as mentioned above, you may find that your Irish tax due is less than what you've already paid in Hungary. The basic example I used shows the process at its simplest to illustrate that additional tax might be due, but in reality, most people will find that they owe very little or no tax to the Irish revenue on their Hungarian rental income.
 
Its the same in the UK - you can offset deductions.
 
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