Hungary

Last update: July, 2016

The two-thirds majority in the Parliament, which is required to effect changes in the text of the constitution, and which the Fidesz-KDNP party gained at the 2010 elections, was used to fully re-write and adopt the basic law by spring 2011. The preamble of this new Fundamental Law of Hungary, the National Avowal of Faith, contains references to culture:

We commit to promoting and safeguarding our heritage, our unique language, Hungarian culture, the languages and cultures of nationalities living in Hungary, along with all man-made and natural assets of the Carpathian Basin… We believe that our national culture is a rich contribution to the diversity of European unity…We respect the freedom and culture of other nations…

Specific references to culture:

Article P

All … cultural assets shall form part of the nation's common heritage, and the State and every person shall be obliged to protect, sustain and preserve them for future generations.

Article X.

(1) Hungary shall ensure the freedom of scientific research and artistic creation…

(3) Hungary shall defend the scientific and artistic freedom of the Hungarian Academy of Sciences and the Hungarian Academy of Arts.

It is deplorable, however, that the most often cited part of the old Constitution with regard to culture has kept its ambiguous original wording:

XI. cikk

(1) Minden magyar állampolgárnak joga van a művelődéshez.

(2) Magyarország ezt a jogot a közművelődés kiterjesztésével és általánossá tételével … biztosítja

The word művelődés is commonly understood to be broader than education proper (for which there are also more specific terms), and includes the activities of participating in or "consuming" culture. Unfortunately the term is usually translated into foreign languages as education, including the official translation on the website of the government:

Article XI

(1) Every Hungarian citizen shall have the right to education.

(2) Hungary shall ensure this right by extending and generalising public education… 

This state of affairs creates the false understanding that the Hungarian constitution does not specify cultural rights as stipulated in Article 1 of the International Covenant on Civil and Political Rights of the United Nations. Nevertheless these passages have little direct impact on actual cultural phenomena in the country.

The hundreds of resolutions of the Constitutional Court have almost never touched upon this part of the constitution, and never in relation to culture.

Similarly, the records of the activities of the parliamentary Ombudsman of civic rights contain negligible instances that only relate to cultural rights.

Last update: July, 2016

The cultural budget of the government, however, traditionally lacks transparency, which renders international comparisons impossible without additional research. In fact, due to the dispersed nature of competences for culture presented in Chapter 3, one cannot talk about one "cultural budget". The budget section under the charge of the state secretary for culture contains furthermore aggregations like "public collections" (i.e. libraries, museums, archives directly supervised by the ministry) to which considerable amounts are earmarked without specification or listing. As another area of opacity, a quarter of the budget of the National Cultural Fund is at the discretion of the minister: these grants, about 7-8 million EUR a year, are subsequently disclosed on the website of the Fund.

A traditional feature of the Hungarian system of cultural finances is the contribution from the central budget to the "cultural tasks" of the local governments. This does not appear in the chapter of the Ministry for Culture but in that of the Ministry of the Interior; in 2014, 29.2 billion HUF was earmarked; in 2015 it was increased by 1.2 billion. In 2015 the minimum amount of the cultural normative support for towns was introduced. This means that a village or town – regardless to its population – would receive a minimum of 1.2 million HUF (ca. 4000 EUR) contribution for culture. Nevertheless the majority of municipalities spend several times more on culture than the "per capita" central redistribution.

Last update: July, 2016

Hungary has moved away from the socialist (communist) era when nearly all cultural actors were either civil employees or members of the monolithic artistic associations enjoying benefits comparable to salaried persons. The most difficult task has been to transform the system of health care and pension plans of the so-called "Art Fund", inherited from the communist period, to a new insurance system. The state guarantees the payment of old age support (de facto pension) to those artists and writers who had been paying members of the Art Fund before it was transformed into the Hungarian Public Foundation for Creative Art (Magyar Alkotóművészeti Közalapítvány, MAK) in 1992. The budget for 2014 of the Ministry in charge of culture contained a subsidy of HUF 1,5 billion for these pensions.

It is estimated that over 75% of actors, dancers, musicians, arts organisers, technicians, designers and other cultural operators working for a variety of clients are self employed. Many self-employed people remained on the margins of the social security frameworks because they had been coerced into the position of quasi entrepreneurs instead of the more secure employee status, so that the employer (often a public institution like a theatre or a museum) could save on the social insurance fees; another reason was that self-employed people tended to pay social insurance after the minimum monthly wage only upon their own choice. To counteract this problem, a few years ago the government started a campaign of re-integration of these "false entrepreneurs" into employment, and passed measures to make paying social insurance fees more attractive. This issue was behind the introduction of EKHO in 2005, a regime of simplified contributions to common charges (literally "public burden"). The scheme has so far survived the many changes in the taxation system.

In the framework of EKHO, more favourable conditions and simplified procedures were offered to a list of professions, typically in the cultural sector. A condition of this status is that the annual income of the person remains below HUF 25 million (about EUR 100 000). The EKHO Law (Act CXX/2005) states that the minimum mandatory tax base for social security contribution payments is the minimum wage, while the rest of the citizen's income should be taxed according to the rules of EKHO. This simplified way of paying social security fees is open to employees and self-employed people as well, including pensioners.

Independents are not able to claim unemployment benefit. Sickness benefit may be covered by paying into a private insurance policy. Most independents in the cultural sector pay into a private pension fund to top up the state pension.

Last update: July, 2016

There were two income tax rates for individuals until 2011: 18% and 36%, the latter operating from about 6 500 EUR per year. This was replaced with a 16% single rate, reduced to 15% from 2016. Family taxation was also introduced to provide extra incentives to families having at least one child. Families with three children living on the average salary are exempt from personal income tax.

Social security payments are usually calculated at 27 % above the gross salary and the 15% personal income tax is due to be paid on the super gross salary including social security costs. By nature of single rate taxation, those with higher legal income benefit most.

State prizes, awards and fellowships are tax exempt; artists may claim material expenses on their income tax. Also, the tax base of authors and other creative artists may be reduced by 50% of the income generated by copyright or other royalty payments. From 2011, company income tax is 10% for profitable companies below the 500 million HUF tax base (over 500 million the tax is 16%), with an additional 10% tax on the dividend. The so-called Non-Profit Act (CLVI/1997) defines the operational conditions of third sector organisations and foundations. It includes tax incentives to facilitate the involvement of private support in supporting public goals.

Associations, foundations as well as nonprofit enterprises can—by adhering to specific conditions—qualify as public benefit organisations. Businesses – companies and individual entrepreneurs – can deduct 20% of the value of donations given to such organisations from their tax base, and in the case of multi-annual pledges, this rate is 40%.

In spite of these regulations, philanthropic support to cultural organisations is not particularly widespread, and the little that takes place is barely acknowledged: the prevailing mood in the cultural sector is that of dissatisfaction. Certainly, most of these tax benefits affect other sectors (social and health care, education etc.), and the bureaucratic regulations attached render donation complicated both for the donator and receiver. Greater attention and expectations are linked to sponsorship, where tax exemption is difficult to conceive: the entire amount can be deduced from the tax base as marketing expenses anyway.

Tax legislation has greater significance with investments. In this respect, the Law on Motion Pictures (Act II/2004 or Film Law) stands out, offering a 20% tax break on film making. The tax credit attracted the shooting of international productions and also provided incentives to some local projects. It has also created a favourable environment for investment in studios, the largest of which is the Alexander Korda Studios at Etyek. After negotiation with the European Commission several of the criteria for public support were defined more strictly (with the cultural principle reinforced), and the limits of state subsidies are regularly re-negotiated. On the whole, the main principles of the Film Law were found to be compatible with EU regulations.

With the Performing Arts Act a similar tax credit arrangement was introduced for theatres and orchestras to the amount of 80% of the box office income each year. This became an important source of revenue for performing arts organisations. (Source: http://www.eloadomuveszetiiroda.hu). The fact that the regime was extended to donations to sports as of 2012 created concerns: how much would be left for culture at a time when profits of corporations are dwindling anyway? Nevertheless the amount grew to 11.6 billion HUF, divided between 150 organisations. (For comparison: the grants of the National Cultural Fund amounted to 9.8 billion HUF.) In 2013 the total sum of such support to theatres, orchestras and dance groups soared at 16.9 billion HUF.  

In 2003, a significant innovation in the fiscal system radically simplified the administration and taxation of small enterprises (called EVA: simplified enterprise tax), which is beneficial for many self-employed artists and cultural operators.

Under EVA, small businesses are taxed at a flat rate of 37% from 2012. This eliminates any other income tax or levy. No record is required on business expenditure which negates the need for the collection, storing and book-keeping of bills and accounts. On the other hand, EVA subjects must add VAT to their invoices which they cannot reclaim. Partly, the large success of EVA led to a next step, the introduction of EKHO, a regime of simplified contributions to common charges (literally "public burden") - see chapter 4.1.3.

There is one more speciality in the Hungarian tax system – Act CXXVI/1996 on "1%" has evoked great attention outside the country as well. When taxpayers submit their annual tax returns, they can allocate 1% of their income tax to a non-governmental organisation of their choice by indicating its tax identification number (also another 1% to a registered church, if they so wish). According to the data disclosed by the tax authorities, 49% of tax- payers channelled 13.1 billion HUF from the tax on their 2012 income to 31 101 organisations. The full list of recipients is available on the website of the tax authority. It is next to impossible, however, to identify the share of culture from the spreadsheet of 31 thousand lines. Names of the organisations do not always provide clues about their profile. Here is an exception from the first page of the list, for sake of illustration: the Bartók Chamber Choir Foundation in the city of Szolnok received HUF 159 000 (about EUR 530) from 39 anonymous donors.

The general value added tax (VAT, in Hungarian áfa) rate of 25% was raised to 27% with effect from 2012, which affects music recordings, performing arts (including theatre tickets), film making, video lending, cinema, etc.; whereas a rate of 5% operates for books, including textbooks, periodicals including newspapers, as well as licensed handicraft products. VAT registration is obligatory for undertakings, unless an individual tax exemption is granted, for those with an annual turnover under five million HUF (about EUR 16 700).

As one in the row of economic branch specific taxes, the tax on advertisements introduced in 2014 affects culture in an indirect way – see chapter 2.5.3.

Last update: July, 2016

Artists and other cultural actors can work in five forms: as civil employees, general employees, individual entrepreneurs (sole traders), corporate entrepreneurs, as well as freelance workers. The minimum monthly wage from January 2016 is HUF 111 000 (about EUR 360), and 129 000 for qualified positions. Gross average earning is about 2.1 times this amount.

Social partnership functions relatively effectively on the national level and on a large scale, e.g. between the government and civil employees - whereby they come to an agreement on improvements in working arrangements including productivity and salary increases. It is less so, or even non-existent, in respective cultural sub-sectors.

Labour conditions of civil servants and civil employees are regulated by the acts on civil service and on public finances. They contain the detailed schedules and criteria of salaries and wages – with many direct references to cultural and artistic jobs. These are updated each year, in which the trade unions of the respective cultural sectors take an active part. As was described in chapter 4.1.4, until recently a considerable number of cultural workers acted in the framework of a "betéti társaság" (Bt), the simplest form of business companies or partnerships, usually with family members as quasi business partners. A "Bt" is also used by employees receiving a regular wage who do occasional freelance work. In a number of public cultural institutions a two-tier salary system operates with some artists on full time contracts, while others are self-employed.

The provisions in the pensions system permit performers to retire early, e.g. dancers and some other performing artists under certain circumstances.

There are no specific provisions concerning the involvement of volunteers that are relevant to culture. Act LXXXVIII/2005 provides the necessary legal environment and protection for public voluntary work.

Last update: July, 2016

Hungary follows the continental, droit d'auteur tradition. The Act on Authors' Rights LXXVI/1999 closely observes requirements of the acquis of the European Union. This Law, among others, specifies the rights attached to transmitting and downloading via Internet.

The Law stipulates reprography as well as blank cassette rights. The respective levies are collected by the Hungarian Alliance of Reprographic Rights (Magyar Reprográfiai Szövetség – RSZ). Schools and public libraries are exempt from paying this fee. Fees are paid by the importers and manufacturers of copy machines and related equipment. The various categories of fees are annually determined by the culture minister.

The same system has been in effective use with regard to fees connected to public performances of literature and music. Fees are contained in a complex Table with over 400 grids by various criteria. Examples of daily fees in 2013: HUF 1 779 (ca. 6.0 EUR) must be paid by first class restaurants in Budapest; at the other end, HUF 108 (ca. 0.3 EUR) is due from bakeries or ice cream parlours in small villages. These amounts are 50% higher in the case of live music, 20% only if at least two musicians are lawfully employed, and in the case of four – just 5%. Operating multiple-choice slot-machines meant another 20% to the fee, but these were banned in Hungary in 2012 (except for a few casinos).

In 2013 the total revenue of Artisjus, the Hungarian collecting society, was 16.1 billion HUF, of which net copyright revenue was 12.7 billion HUF (about 41 million EUR).  Source: http://www.artisjus.hu.

Artisjus distributes levies to copyright holders collected from blank casettes, discs, pendrives and similar devices. From 2014, 25% of this source is channelled to the National Cultural Fund, where it finances a programme for young pop-rock talents (named after Tamás Cseh, a cult bard who died in 2009).

Last update: July, 2016

Hungarian data protection laws and their implementation are rather strict. Until 2011 there was a special Ombudsman for data protection, whose functions have been taken over by the National Authority for Data Protection and Freedom of Information.

Last update: July, 2016

Act 2001/XCVI was passed aiming to limit the use of foreign expressions especially in commercial advertisements. The proposal was followed by a lively, but short, debate in the press, and very little information is available since as to the implementation of the law.

Last update: July, 2016

Information is currently not available.

Last update: July, 2016

In Hungary, there is no comprehensive law on culture or art. Act CXL/1997 is often referred to as the Law on Culture, but in fact it regulates three sub-sectors only: libraries, museums and local socio-cultural activities. The annually renewed Acts on the budget, on taxation and on regulating the competency of local governments have a pivotal role to play. The Acts on Public Finance and Public Servants pertain to the operation (creation and winding up) of publicly owned cultural institutions.

Similarly, public foundations are also a recent formation, the operation of which is basically regulated by the Civil Code.

Act XXIII/1993 created the National Cultural Fund that operates under the supervision of the minister in charge of culture. The Fund does project funding, but it does not give support to investments and operations: from project grants a mere 5% can be spent on operational overheads. Natural and legal entities as well as business organisations without incorporation may apply. The original Law stipulated a cultural contribution of usually 1% to be paid on certain cultural goods and services (of which advertisements were the most important source). Since 2010, 90% of the revenues from the most popular weekly lottery game replaced the levy. Each year, between HUF 7-8 000 million are collected. A quarter is reserved for the discretion of the minister, the rest is spent according to the guidelines of the main board. In 2016, seventeen area boards administered the grants, ranging from theatre to heritage protection.

Between 1993 and 2012 the Minister appointed the Chairman of the National Cultural Fund Committee. With the modification of the Law in the summer of 2012, the Minister kept the title of Chairman for himself and the position of Vice-Chairman was created for the de facto chief executive of the Fund.

The eleven member Committee is appointed for a term of four years. The members in the nine area boards are also appointed for four years, half of them upon the recommendations of professional organisations, the other half selected by the Minister. As of 2016 the president of MMA gains significant power in the finalisation of the annual work strategy, the financial decisions, the (re)organisation and constitution of the area boards of NCF, which results in an intense cooperation of the two major institutions. The Directorate of the National Cultural Fund helps in the administrative work of the Fund with a staff of 110 persons.

In 2013, 11 283 applications were processed and HUF 11.7 billion was distributed between 7 276 grantees, averaging HUF 1.04 million (ca. 3 400 EUR). Applicants without Hungarian citizenship need an assistant executive, which is a legal entity registered in Hungary.

List of the existing cultural legislation

List of laws with relevance to culture

Last update: July, 2016

The Act on Archives was passed in 1995. In 2001, an Act was passed on the Protection of Cultural Heritage, covering the areas of archaeology, built heritage and protection of movable objects. These Acts define the specific ownership requirements of state, local government and private (including Church) enterprises, and stipulate the rules for the protection and utilisation of heritage. In 2010 and 2011 the issue of preventive archaeological explorations before infrastructure investments was modified twice. Firstly, county museums received back the rights and task of such explorations (and the national authority was terminated); secondly, conditions for archaeological activities were restricted to 30 workdays and 1% of the investment budget or 200 million HUF. 

Act LXXVII/2011 on Hungarian World Heritage aims to put on solid legal and institutional basis the efficient implementation of the World Heritage Convention in Hungary and to ensure the efficient management of the Hungarian sites on the World Heritage list.

The modification of the Cultural Heritage Law (Act LXIV/2001) in 2011 established the new concepts of historic memory sites and national memory sites, with 36 items belonging to the first, and nine to the second list. 

Due to the towering insurance costs connected to the Cézanne exhibition of the Szépművészeti Múzeum, a law was passed with urgency, which stipulates a state guarantee to borrowings of such a scale: Act XCV/2102 on the Special Protection of Borrowed Cultural Goods.

Last update: July, 2016

Act XCIX/2008 on Performing Arts in December 2008 was considered a major achievement in cultural policy of the previous government – prepared in close co-operation with professional organisations. It aimed at stabilising the status of artists employed in theatres and orchestras, in line with related UNESCO recommendations. It also regulated the conditions of access to state subsidies. Theatres were registered in six categories, orchestras in two categories, the number of performances being the main criterion. A special aspect was the guarantee of at least 10% of public grants for independent, alternative or experimental theatre groups (category VI). A Performing Arts Office (Előadó-művészeti Iroda) was created to register organisations and handle the administration of subsidies and tax credits. A special section of the Law regulated the selection of directors of public theatres and orchestras, ensuring the involvement of professional delegates in the process. Performing arts organisations welcomed most of the tax credit measures of the Law, discussed in chapter 4.1.4.

In 2011 substantial amendments were made: the theatre part was practically fully re-written. The six categories were reduced to three: national, preferential and other performing art organisations. Several of the automatic decisions in the former Act were removed, giving thereby more room for quality judgement. A 24-strong National Performing Arts Council for Reconciliation of Interests was established. Upon their recommendation – with minor adjustments – the Minister selected 24 national and 54 preferential performing arts organisations. The list is updated each year: in 2014 there were 21 national and 51 preferential organisations, ranging from the National Theatre to the Mendelssohn Chamber Orchestra in Veszprém.

The guaranteed share of the third group – the independent scene – from the subsidies was not kept. These organisations apply for subsidies in the frame of an annual public call.

Last update: July, 2016

The Act on Authors' rights stipulates fees after the first sale of art works, and levies after the sales of works in the public domain. The rate is 4%, in the first case going down to 0.25% on a regressive scale. 

Last update: July, 2016

Hungary has no separate Law to support literature and writers.

The cause of libraries is regulated in detail by Acts CXL/1997 and XX/1991, the latter stipulating that local governments are obliged to assure library supply, with special regard to youth and cultural minorities. In settlements with a few hundred inhabitants only, the local governments fulfil this obligation by reaching joint agreements with neighbouring towns or villages. The scheme of public lending right payments has not yet been introduced.

Re-drawing the canon of national culture is taking place. Literature is one sphere, where conservative and / or nationalist authors of the interwar period are being promoted by the authorities, including in school curricula. In October 2012, the state publisher of the official gazettes launched a book series called the "National Library"in this spirit, heavily subsidised by the government and widely distributed free of charge (which provoked protest by the publishers' association).

Last update: July, 2016

Film, video and photography

A significant achievement was made with the passing of the Film Law in 2004, fundamentally amended in 2010 and 2011.

Mass media

The entire media regulation was reconsidered after 2010. The most important prevailing regulations concerning radio and television broadcasters are the following:

• content quotas for Hungarian programmes produced in Hungary by private and public radio stations are 35%, of which 25% must be produced in the last 5 years respectively;
• content quotas for Hungarian programmes produced in Hungary by private and public television stations are 33.3% and 50% respectively;
• quotas for programmes of European origin are 60% in the case of public television and 50 % in case of private television;
• a minimum of 25% of films broadcast by the public television should have Hungarian participation;
• quotas for independent producers' films are 10% European; 8% Hungarian for all private TV stations and the films must have been made in the last 5 years; and
• for public channels, quotas for independent producers' films are 33.3% in general and 25% Hungarian.

There exist no special press quotas in Hungary.

Last update: July, 2016

Information is currently not available.