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Dr Katalln Szamosi & Dr Eniko Karsay | S B G K Patent and Law Offices

C U L T U R A L HERITAGE A N D ART M A R K E T
1.

Does your country have regulations on national patrimony, cultural heritage, indigenous
art and like, and if so, what are the essentials?

In Hungary, both cultural heritage and indigenous art are legally protected.
The new Fundamental Law of Hungary (in effect from 1 January 2012) contains references to culture in its preamble
and in Article R Article X, and Article XI.
The notion of 'cultural goods' is defined by Act LXIV of 2001 on the Protection of the Cultural Heritage as follows:
'outstanding and typical objects, images, sound recordings and written memories and other proof of the origin and
development of lifeless and live nature, mankind, the Hungarian nation and the histon/ of Hungary, as well as pieces of art'.
Archaeological finds are protected by legal acts (they should be state property) and their placement into public
collections is obligatory. Monuments with their movable accessories (furnishings, equipment) without respect to who
owns them and objects in public collections are also protected. The Cyula Foster National Centre for Cultural Heritage
Management declares protection of cultural goods (those not falling under the scope of the above categories) which
are irreplaceable and of outstanding significance, registers them and the owner of cultural assets for which protection
has been declared, and is obliged to make arrangements for their safeguard and scientific research. Permanent export
of protected cultural goods, or those for which protection has been declared, is prohibited: in such cases, a temporary
export licence shall be required and with conditions to return.
Hungary has been a member of U N E S C O since 1948. Hungary ratified the 2 0 0 3 U N E S C O Convention safeguarding
intangible cultural heritage in 2 0 0 5 . The Hungarian National Committee for Intangible Cultural Heritage and the
Hungarian National Inventor/ of Intangible Cultural Heritage was established in 2 0 0 8 . Since April 2009 , the body
responsible for the implementation of the Convention is the Intangible Cultural Heritage Department of the Hungarian
Open Air Museum in Szentendre. The folk art of the Matyo, embroidery of a traditional community and falconry, a living
human heritage is on the Representative List of the Intangible Cultural Heritage of Humanity from December 2012.

2.

Is your country party to the 1970 UNESCO Convention? What are the stril<ing/
distinguishing features of your national implementation legislation?

Hungary is party to the 1970 U N E S C O Convention (Decree 2. of 1979).

'

Hungary notified the following declarations at the deposit of the instrument of ratification:

'

Articles 12., 22. and 23. of the Convention contradict the United Nations General Assembly Resolution 1514 (XV.) of 14
December, 1960. Article 20 of the Convention is not consistent with the principle of the sovereign equality of states,
the convention considering that regulated matters should be open to all states.

3.

Is your country a party to the 1995 UNIDROIT Convention on Stolen or Illegally Exported
Cultural Objects and/or any other international conventions or bilateral treaties relating
to cultural property and their trade?

Hungary is party to the 1995 UNIDROIT Convention which entered into force on 1 November 1998 in Hungary. The

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Convention was published in the Act XXVIII of 2001 including the declaration of Hungary that the claims for the
restitution of cultural objects do not lapse in accordance with Hungarian Laws. Furthermore, Hungary declared
that claims for the restitution or request for the return of cultural objects brought by a state under Article 8 shall be
submitted to Hungary through diplomatic or consular channels Article 16 (c) of the Convention.
Furthermore, Hungary is party to the 1954 Hague Convention for the Protection of Cultural Property in the Event of
Armed Conflict (Decree 14. of 1957) and to the Second Protocol to the 1954 Hague Convention (Act XXIX. of 2006).

4.

Is the art and cultural property market thriving in your country? Please provide data about
trade volumes, dealer presence, etc, where available.

The art trade, previously under strict state monopoly, was directed to the private sector more than 2 0 years ago.
Nowadays, a European-level art trade is coming into existence in Hungary; art market participants have been finding
their positions, the special fields of the different galleries and auction houses have become settled, the supply and
demand specified by the market and legal regulations safeguard the appropriate operation of the art market. Seventy
per cent of national art traffic is a result of the sale of paintings and graphic works, followed by 10 per cent market
share from the sale of jewellery and especially silver items often bought as investments. Over the past few years, the
most successful auctions have involved paintings. Supply has been strengthened by the increasingly active research
work of the galleries, as a result of the rediscovery of many lost works of art.
There are no official statistics on the volume of the total Hungarian art market, although its value is estimated at
around EUR 4 9 - 6 5 million. In the winter season of 2012, the painting titled 'View of Trau in the Sunset', created by
the Hungarian artist, Tivadar Csontvary Kosztka in 1899, which was offered for auction by a private collector, set a new
Hungarian auction record with its hammer price of approximately E U R 8 4 3 , 0 0 0 .
The Hungarian art and cultural property market is witnessing a revival after the financial crisis of 2 0 0 7 - 2 0 0 8 and
the prestige of Hungarian painting is unquestionably on the rise again. The first Hungarian Painting and Work of
Art Expert's Office was established with the purpose of protecting Hungarian painting abroad against increasingly
emerging forgeries and to help buyers receive answers to their questions regarding the authenticity, artistic quality and
commercial value of artwork.
A unique feature of the Hungarian art market in Central and Eastern Europe is the great number of auction houses.
The most important Hungarian auction houses continuously operate in a regulated manner and are members of the
National Federation of Art dealers and Galleries.

P U R C H A S E A N D EXPORT
5.

What is the due diligence required from a buyer?

There is no specific mandatory legal regulation pursuant to Hungarian law.

If the buyer purchases a painting from a flea market (eg, Ecseri flea market in Budapest) or over the internet, then the
buyer shall calculate the risk of purchasing a fake product, counterfeit or stolen work of art.
It is recommended to check the publically accessible online database on stolen and missing works of art available on

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the website of the Gyula Forster National Centre before any purchase. The cJatabase consists of the recorded data and
photographs of some 3,500 works of art that have been stolen or have gone missing in the last 50 years.
The auction buyer shall inspect the condition of the auction item and make sure that it corresponds with those included
in the catalogue. It is important to check the auction terms and conditions before purchase, because the auction
houses usually exclude liability for defective items and any warranty claims against the auction houses following the
auction.
Good faith has key importance before a Hungarian court. The court examines all the circumstances of the acquisition,
including the character of the parties, the phce paid, whether the buyer checked any reasonable accessible register of
stolen cultural goods and any other relevant documentation which the buyer could reasonably have obtained or took
any other necessary steps that a reasonable person would have taken in the circumstances.

6.

Are there any particular features of local law that require a buyer's attention, whether in
private treaty purchase or purchase at auction?

The cultural assets kept in museums, different public archives, and histohc documents in librahes are protected. The
ownership of the protected cultural assets can only be transferred on the basis of a written contract. The Hungarian
state has a pre-emption right in case of paid transfer of ownership title of the protected cultural assets.
When such protected cultural assets are transferred - especially at auction - the trader and also the owner shall
immediately report all changes related to them (eg, the name and address of the owner, the treasure place of the
object) to the authority, but not later than eight days from learning of the change.
The buyer must contact the auction house at the latest within three years from the date of the auction if the buyer has
any substantiated doubt with respect of the purchased work of art.

7.

What are the remedies in case of a fal<e, forgery or counterfeit?

The Hungarian Criminal Code contains no special crime on the counteri'eiting or forging of artworks.
The buyer of a forgery can submit an accusation to the competent police authorities on the basis of fraud. During
the criminal procedure, the buyer as victim can submit his damages claim. Furthermore, the buyer may demand
compensation for damages in accordance with the rules of civil law by filing a civil action before the competent court.

8.

Is there any VAT or sales tax and, if so, (distinguishing between goods imported and
exported by a local or foreign buyer) what are they?

The standard VAT rate in year 2013 is 27 per cent of the taxable amount.
In case of acquisition of works of art, collectors' items or antiques within the European Union, VAT shall not be paid:
where the vendor is a taxable dealer and able to prove that VAT has been applied to the goods in the member
state in which their dispatch or transport began according to the national law of that member state which is
considered equivalent to Articles 312-325 of the Council Directive 2 0 0 6 / 1 1 2 / E C (VAT Directive).
where the vendor is an organiser of a sale by public auction and if able to prove that VAT has been applied to

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the goods in the member state in which their dispatch or transport began according to the national law of that
member state which is considered equivalent to Articles 333-341 of VAT Directive.
The Hungarian Act on VAT contains special definitions for works of art, collectors' items and antiques and a chapter on
the particular provisions relating to these goods and to the dealer of these goods/organiser of a sale by public auction.
The local person can request tax exemption up to H U F 6 million.

9.

Is there an artist's resale right (droit de suite) and, if so, how does it apply?

Royalties shall be paid if the ownership of an original work of art is transferred for a consideration with the involvement
of an art dealer and this royalty shall be paid only after the first transfer of ownership of the work of art by the author
The right to this kind of remuneration may not be waived.
For the purposes of the provisions on the resale right in the Hungarian Copyright Act, 'original work of art' means works
of graphic art (eg, paintings, drawings, engravings, prints, lithographs, sculptures), works of plastic art (eg, tapestries,
ceramics, glassware) and photographic works, provided they are made by the author himself or are copies considered
to be original works of art. Copies of works of art shall be considered to be original works if they have been made in
limited number by the author himself or under his direction. Copies of works of art which are numbered, signed or
otherwise appropriately marked by the author shall be considered to be such copies. In this context, 'art dealer' means
any natural or legal person or business company having no legal personality distributing works of art.
The royalty shall be determined at the different rates based upon the value of the works of art, or may be expressed
in monetary terms (hereinafter referred as 'sale price'), exclusive of taxes and other public dues (eg, 3 per cent for the
portion of the sale price from EUR 50,000.01 to EUR 2 0 0 , 0 0 0 , expressed in HUF; 1 per cent for the portion of the sale
price from EUR 200,000.01 to EUR 3 5 0 , 0 0 0, expressed in HUF). The total amount of the royalty may not exceed the
amount in H U F which is equivalent to EUR 12,500. The royalty shall be paid by the art dealer to the collecting society
performing the management of rights in graphic and plastic works of art.
Where a museum institution (eg, museum, public museum collection, exhibition sites) obtains the ownership of an
original work of art from a person other than an art dealer, there shall be no obligation to pay the royalty provided that
the operating of the museum is not intended to generate or increase income even in an indirect way.
The provisions on the resale right shall apply to: (1) any author or his/her legal successor who is a national of any of
the member state of the European Economic Area, as well as; (ii) nationals of any state outside the EEA, provided that
the laws of the country of citizenship of the author or his/her legal successor ensures resale rights to authors and their
legal successors from the member states of EEA, or (iii) author or his legal successor who is not a national of any of the
member states of the EEA, but who has his habitual residence in Hungar/.
The Directive 2 0 0 1 / 8 4 / E C of the European Parliament and of the Council of 27 September 2001 on the resale right for
the benefit of the author of an original work of art is harmonised in Hungary.

10. Are there any export restrictions in respect of certain cultural property or otherwise and, if
so, what is the procedure?
Cultural goods exceeding 50 years of age or declared protected or registered by a public museum or archive may be

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exported only with a licence issued by the Cyula Foster National Centre.
Protected cultural goods can be exported only with this licence and only for a determined pehod, the maximum of
which must be stated in the state guarantee, insurance contract or other adequate covenants.
The licence for the export of these cultural goods can be issued for an indefinite period or for a determined period from
one year up to 10 years.
Cultural goods, which are not protected or are less than 5 0 years old, can be exported without any permit. Nevertheless,
the authority issues a certificate on the legality of the export of the non-protected cultural goods in case a request is
filed for it.
Protected cultural objects and the objects of public collections can have a temporary export permit in substantiated
cases (exhibition, research, restoration, etc) from the authority.
Pursuant to section 215/B of Hungarian Criminal Code on illegal use of cultural goods, any person who, without a
licence, exports cultural goods, or who exceeds the limits of an export licence, shall be punishable by imprisonment for
up to three years. Furthermore, a cultural heritage fine should be paid (approximately E U R 30 up to 830,000).

11. Are there any 'free ports' and, if so, what is their regime?
No, there are no'free ports'in Hungary.

PEACEFUL ENJOYMENT
12. What are the rules on import customs and VAT clearance?
The importation of goods is subject to VAT Importation of goods shall mean the entry into the Community of goods
which are not in free circulation within the meaning of Article 24 of the Treaty establishing the European Community.
Hungary ratified the Convention on centralised customs clearance.
Import duty and taxes are due when importing goods into Hungary from outside of the EU whether by a private
individual or a commercial entity. The import duty and taxes payable are calculated on the value of the imported
goods plus the cost of importing them (shipping and insurance).
For every person or company starting the clearance process, a registration number (VPID number) must be registered
with the Hungarian Customs Authority.

13. What is the buyer's protection against title claims, in general? Is good faith relevant and,
if so, what are the requirements?
According to the Hungarian Civil Code, a bona fide buyer shall acquire ownership of a thing that has been sold
commercially, even if the dealer was not the owner of the thing. It means that the buyer shall not examine the
ownership title of the dealer as seller Taking into consideration the circumstances of the sale and the price of the
purchased thing, the good faith of the buyer can be questioned. The buyer did not acquire the ownership of the thing if
he knew, or ought reasonably to have known, that the dealer is not the owner of the thing.

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A person who has, outside of commercial circulation, acquired a thing in good faith and for consideration from a person
to whom the thing was entrusted by its owner, shall obtain ownership (eg, the way a second-hand shop selling items
on a commission basis acquires a thing from a private person). However, the owner may reacquire the thing within one
year of the initial acquisition by refunding the consideration. Otherwise the rules of bona fide possession without legal
grounds shall apply to the parties' legal relationship according to which a possessor may refuse to surrender a thing
until his demands claimed in connection with possession are satisfied; the provisions on responsible custody shall
apply to his legal status. A bona fide possessor shall not be liable (eg, for damages) for the duration until possession
is reclaimed from him (eg, in court). The buyer shall mal<e the necessary steps for the clarification of the ownership by
this kind of purchase, which shall be proved in court, otherwise the buyer cannot be considered to be bona fide.

14. What is the buyer's protection against Holocaust-based claims?

There are no special rules for Holocaust-based claims.

15. What is the buyer's protection against restitution claims for violation of foreign export
restrictions ('looted property')? Please explain conditions (and recent practice, where
appropriate) on which your country grants assistance to foreign countries seelcing
restitution of cultural objects.
Any states in the EEA may initiate proceedings against the possessor or the holder with the aim of securing the return
of a cultural object which has been unlawfully removed from its territory before the competent Hungarian court
(Metropolitan Tribune). The return proceedings may not be brought more than one year after the requesting state
became aware of the location of the cultural object and of the identity of its holder; or more than 30 years after the
object was unlawfully removed from the territory of the requesting state; or 75 years where the object forms part of
public collection or are ecclesiastical goods. The description of the cultural object and the declarations on the unlawful
removal and on the classification as a cultural object of the central authority of the requesting states shall be attached
to the petition beyond other mandatory documents usually prescribed. The Foster Cyula National Centre is appointed
to co-operate and promote consultation between the states' competent national authorities.

16. What are the policies, regulations and practices of your country seelcing the repatriation
of illegally exported cultural property?
The repatriation of illegally exported cultural property is important in the frame of protection of cultural heritage. For
this reason Hungary ratified the 1970 U N E S C O Convention and the 1995 UNIDROIT Convention which complement
each other
Under the Act L X XX of 2001 and the Council Directive 9 3 / 7 / E E C of 15 March 1993 on the return of cultural objects
unlawfully removed from the territory of a member state, the possessor has to return the cultural object to the
applicant state if it was illegally exported.
The Cyula Foster National Centre is the appointed authority for restitution cases on the basis of the ratified international
conventions. This Centre supplies the official and magisterial tasks related to the cultural goods from 21 September,
2013 and operates a registry of stolen or lost art objects. The predecessor of the Centre concluded a co-operation
agreement with the police and the customs authority on 22 March 2 0 0 5 for efficient protection of cultural goods.

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17. Is there a regime of anti-seizure guarantee ensuring the safe return of objects on loan to
local institutions?
Due to ttie significant insurance costs connected to the 'Cezanne and The Past: Tradition and Creation' exhibition
organised by the Museum of Fine Arts (October 2012 - February 2013), Act X C V of 2012 on the Special Protection
of Borrowed Cultural Goods was passed urgently, which stipulates an anti-seizure guarantee for borrowings of such
scale. Under the period of the special protection of the borrowed cultural goods, it is forbidden to execute any measure
or denunciative action ordered in the course of a court, administrative or other official procedure which limits or
terminates the possessory title or the right of disposal regarding the borrowed cultural goods. This special protection
does not prevent the execution of any measure of denunciative action ordered with the aim of regaining the cultural
goods which were illegally expropriated from the exhibitor The exhibitor shall file an application form with a request for
this special protection to the Cyula Forster National Centre for Cultural Heritage Management. The period of special
protection is determined on the basis of the loan agreement, but the temporary exhibition can be open for a maximum
of 12 months. The special protection can be prolonged for a further four months only in special cases (eg, restoration).

18. Are there artist rights (author's rights, copyrights) affecting the use of artworks by their
owner (eg, public exhibition, reproduction in museum and auction catalogues as well as
other forms of reproduction)?
It is regulated in the Hungarian Copyright Act that the owner of fine art, photographic or applied artwork is obliged to
make the work temporarily available to the artist so that he can exercise his author's rights, if in so doing the author
does not infringe the owner's equitable interest.
The author's approval is required for the exhibition of fine art, photographic and applied artworks. The author's name
shall be indicated when exhibiting the work. From these rules it can be established that the ownership title of fine art
and the economic rights are separated from each other and that the interests can be conflicted where the owner of
fine art and the subject of the copyrights are different people.
It is not necessary to obtain the consent of the author or remunerate the author for displaying a work kept in a public
collection.
From 1 January 2012 a new provision has been included in Chapter IV on free uses of the work and other limitations
on copyright of the Hungarian Copyright Act, according to which, where an original artwork is exhibited or transferred
with the participation of an art dealer, then such artworks may be freely reproduced and distributed for the purpose of
advertising the event and to the extent that it is justified by the promotion of the event, provided that it is not intended
to earn or increase income even in an indirect manner
For other reproduction purposes, the author's or his legal successor's or H U N C A R T Collecting Society of Hungarian
Visual Artists' prior authorisation will be required in future, as well.
Fine art pictures, applied artworks, as well as pictures of industrial designs and photographic works, can be used for
scientific or educational lectures and classroom instruction without remunerating the author or obtaining his consent.

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19. What is the due diligence required from the seller?

Before purchases and auctions, the dealers and auctioneers must check the data for the work of art concerned on the
homepage of the Cyula Foster National Centre. Art dealers automatically receive the Stolen Works of Art Newsletter
which the authority posts upon each new registration in the database, including the data and photographs pertaining
to the theft in question and to that of stolen objects.
Dealers and auctioneers usually have their own team of experts for the examination of the work's origin.

20. Are there any particular standards of due diligence applicable to the trade (dealers and
auctioneers), extending to collectors?
There are no particular written standards of due diligence applicable to the trade, extending to collectors; dealers and
auctioneers comply with the mandatory regulations and with the ethical codes/standards of the different associations
in which they are members.

21. Is there a regime of temporary import for sale?

If there is a temporary import of a cultural good for sale from a state outside the E U into Hungary then the customs
proceeding will be started on the Uniform Customs Declaration (EV) and the imported cultural goods will be reexported within 24 months.

22. What are the remedies against a defaulting buyer (private treaty sale and public auction)?
At public auction, the buyer usually immediately pays the full purchase price, including the hammer price and the
auction commission (and any other tax or contribution required by law), or the buyer gives a deposit as a sign of
commitment by conclusion of the contract. According to the Hungarian Civil Code, the buyer as the person responsible
for the failure of performance shall forfeit the deposit that he has given. Waiver of the right to demand a refund of the
deposit shall not constitute an exemption from the consequences of breach of contract; however, the amount of the
deposit shall be included in the indemnification. If the buyer is unable to offer any reasonable excuse for his default,
he shall be liable for all damages incurred to the object of the service during the period of default, unless he is able to
prove that such damage would have occurred regardless. In respect of the remaining purchase price, the defaulting
buyer shall pay default interest according to the regulations of the Civil Code.
The auction house or other seller shall be entitled to demand performance, or, if performance no longer serves
his interest, he is entitled to rescind the contract irrespective of whether or not the defaulting buyer has offered an
excuse for his default. It shall not be necessary to prove the cessation of an interest in performance if, according to the
agreement of the parties or due to the imminent purpose of the service, the contract had to be performed at a definite
time and none other, or if the seller as obligee has stipulated a reasonable deadline for subsequent performance, and
this period elapsed without result.

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ART P H I L A N T H R O P Y

23. What are the essential rules (other than tax rules) and practices in relation to loan,
deposit and donation to public museums?
Museums may lend or borrow cultural goods for a determined period but for a maximum of five years on the basis
of a written agreement. The inventonal record on the loaned cultural goods shall be attached to this agreement. It
is possible to stipulate a fee for the loan and other financial security in the agreement. This loan agreement shall
include the following: the requirements on protection of conditions securing the loaned cultural goods including the
packaging and the terms of conveying; climatic conditions; the procedure following any damage to the cultural goods;
the insurance policy concluded by the borrower; and the eventual necessary escort of the museologist or the police or
other armed forces.
A public museum may receive cultural goods belonging to its collection which are owned by another party for a limited
duration based on written agreement. For such a deposit, the museum may stipulate a specific fee for the museum
deposit in the agreement which shall at least cover the expenses involved. In the absence of provisions stipulating
otherwise, the depositing party may only claim return of the deposited goods prior to the expiration of the period
set forth in the agreement, if the return of such goods does not harm the museum's cultural education or scientific
activities. The position statement of the Directorate shall be authoritative in disputes regarding this issue. During the
deposit period specified in the agreement, the museum may research, exhibit the cultural goods under deposit and
publish information on them.
Public museums usually conclude a written agreement with the donor or the donor remembers a public museum in
his will according to the provisions of the Hungarian Civil Code.

24. What is the legal regime for private foundations and private museums?
Museum institutions may be established by any legal or private person. The licence to operate is issued by the culture
minister The procedure for the issuance of this licence starts with the application by the maintainer The licence will be
issued if the assets of the museum are cultural assets and the maintainer ensures the personal and material conditions
necessary for their continuous and proper functioning. The maintainer of a museum institution can be a natural person,
unincorporated business association (eg, limited partnerships), or a business association with legal personality (eg,
private limited liability companies). A museum is an institution having scientifically structured collections of cultural
goods, which the institution collects, conserves, processes, researches, exhibits and publicises. The cultural goods in
the inventory of a museum are subject to restrictions in terms of marketing. The fulfilment of the operating licence is
controlled by a professional inspector mandated by the minister

. . . .

According to the Hungarian Civil Code, private persons, legal persons, and unincorporated business associations
('founders') shall be entitled to form a foundation in a charter in order to serve a long-term public interest. A foundation
may not be formed for the principal purpose of performing economic activities. A foundation must have allocated
sufficient assets for achieving its objectives and is a legal person. A foundation is deemed established once it has been
registered by the court and may commence operations on the operative date of the resolution on its registration. A
founder may not withdraw a foundation after registration and shall be entitled to designate a managing body in the
charter or create a separate organisation for such purpose. A managing body (organisation) in which the founder is

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entitled, directly or indirectly, to exercise any controlling influence regarding the utilisation of the foundation's assets
may not be appointed or established. The foundation shall be liable for any damages caused to a third person by the
managing body (organisation) or an officer (member) thereof in the course of fulfilling its responsibilities

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25. Is wealth tax levied on art and other cultural property assets?
At present, Hungary does not operate a system of wealth tax levied on art and other cultural property assets.

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26. Is there a capital gains tax on their disposal or any other event?
Although there is no separate capital gains tax in Hungary, individuals as well as businesses must pay income tax on
any capital gains derived from the sale of movable as well as immovable assets. As such, this also applies to cultural
property. For individuals, the personal income tax rate is 16 per cent. Businesses must include the gains in their
corporate income tax base which is taxable at 10 per cent and 19 per cent progressive rates.

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27. Is there a gift and/or inheritance tax?

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Yes, there is a gift and inheritance tax, at the general rate of 18 per cent on the total value of the gift/inheritance.
There are, however, a number of exemptions and reliefs available. For example, any gift given for scientific, artistic,
educational, cultural and public welfare purposes, and the acquisition of property on the basis of public commitment
(foundation), as well as acquisition of pecuniary value from public gifts serving charitable purposes is exempted from
gift duty.

28. What are the tax breaks, if any, available when loaning/depositing, gifting or bequeathing

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art or other cultural property to public institutions?

There are no explicit tax breaks available with regard to loaning or depositing works of art or other cultural property to
public institutions. However, certain tax breaks and exemptions may apply upon gifting property to public institutions.
The two most important are the possible exemption from VAT as well as the possibility for businesses that are subject
to the corporate income tax to recognise, as a tax deductible expense, the expenses connected to such a gift. Subject to
further conditions, a further reduction of the tax base may also be possible.

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Typically, the above benefit of treating such works as tax deductible items apply only insofar as the recipient is a public
benefit entity, or the gift is provided in the framework of an undertaking for the benefit of the public. In order to get full
VAT exemption and the extra tax base reduction, however, further conditions also need to be met (most prominently
the holding of a certificate from the recipient with certain statutory details). Museums and other public institutions may
or may not fulfil the relevant criteria, ie depending on the exact legal framework in which they operate.

29. What is the taxation of private foundations and private museums upon creation/
endowment and thereafter?
Insofar as private museums are concerned, their tax treatment depends on the legal framework in which they operate ie the tax regime that applies to them depends on their legal form, rather than their function of being a 'museum'. For

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example, they may choose to operate as a for-profit or a non-profit company, a foundation, an association, etc.
With regard to private foundations, generally speaking, they are subject to corporate income tax. However, they are not
required to pay tax on that part of the income which they generate within the framework of non-business activities. As
such, as a main rule, they would not be taxable on gifts received for the purposes of their public benefit (non-business)
activities, ie for the purpose for which they were created. In addition, private foundations enjoy further tax exemptions
also with regard to income generated through their business activities (which may, however, only be conducted on a
complementary basis). The extent of these exemptions primarily depends on whether the foundation: (i) is registered
as a public benefit entity; and (ii) whether it has any public debts. For example, a public benefit foundation is effectively
tax exempt if its business income does not exceed 15 per cent of its total income.

U S E F U L PRACTICAL I N F O R M A T I O N / R E F E R E N C E S
30. Principal laws and regulations
Fundamental Law of Hungary entered into force on 1 January, 2012.
Act IV of 1959 on the Civil Code of Hungary.
Act LXIV of 2001 on Protection of the Cultural Heritage.
Act LXXX of 2001 on the return of unlawfully removed cultural goods.
Act XXVIII of 2001 on publication of the 1995 UNIDROIT Convention.
Act LXXVI of 1999 on Copyright.
Act C X L of 1997 on the Protection of Cultural Coods, Museum Institutions, Public Library Services and Cultural
Education.
Act XCV of 2012 on the Special Protection of Borrowed Cultural Coods.
Act CXXVII of 2007 on Value Added Tax.
Act IV of 1978 on Criminal Code.
Government Decree No. 17/2001 on Restriction on Export of Cultural Objects.
Decree 2 of 1979 on the publication of the 1970 U N E S C O Convention.
Regulation 14/2010 (XI.25.) of the Ministry of National Resources on the authorisation of the cultural goods.
Decree 14 of 1957 on 1954 Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict.
Act XXIX of 2 0 0 5 on the Second Protocol to the 1954 Hague Convention.
Council Regulation (EC) No 116/2009 of 18 December 2 0 0 8 on the export of cultural goods.
Council Directive 9 3 / 7 / E E C of 15 March 1993 on the return of cultural objects unlawfully removed from the territory of
a member state.

IRI

HUNGARY
31. Selected law enforcement authorities
Cyula Foster National Centre - www.to/i.hu
Hungarian Police force - www.po/(ce./iu
National Tax and Customs Administration of Hungary - ivww.en.no'/.gov.hu
National Board against Counterfeiting - wivw.hom/s/tose//en.hu

'

32. Selected collector and trade associations

Kieselbach Gallery and Auction House with comprehensive database of Hungarian Artists and online gallery www.kie5elbach.hu/?lang=enen
Judit Virag Gallery and Auction House Polgar Gallery and Auctions -

hnp://viragjuditgalena.hu/en/

www.polgar-galena.hu/en

Nagyhazi Gallery and Auction House Abigail Gallery and Auction House -

www.nagyhazi.hu/english/index.php
www.abigail.hu/en

BAV Bizomanyi Kereskedbhaz - www.bov.hu/

Belvedere Salon, Gallery and Auction House Ernst Gallery -

hnp://belvedereszalon.hu

wwvj.emstgaleria.hu/english/index_eng.html

Villas Gallery and Auction House - www.w7/osgo/eria./iu/

Moro Antik -

http://moroantik.hu

Nemes Gallery -

http://nennesgaleria.hu.

The First Hungarian Painting Expert's Office - mviA/.Wro/ot.hL/

The Hungarian Contemporary Art Galleries Association -

www.tortorsgo/eria(c/itj/en.

The Hungarian Museum Association - www.pu/sz(fy./iu

TheHomePageoftheHungarianMuseums-www.museum.hu

. V,

AxioArt, Art trade on the Internet - www.ox/oart.com

, ,

The AntaFLusztig Collection - wwH'.modemorf./iu/.''n/e/'.'=en

The Laszlo Karoly Collection - wiw.co/'//osz/oco//ect/on.hu
The Laszlo Vass Collection, Veszprem -

,.

www.vosscoWect/on.hu

The AkosVorosvary Collection, Tapolca-Diszel - www./orvon/tor.com.

. . .