Adókiegyenlítés for Trading Losses: The Two-Year Offset

General information about tax rules, not tax or legal advice. Rules change and every situation is different: check with a qualified adviser in your country before you file.

Two good years, then a bad one. You paid your 15% on the profits in each of the good years without complaining, and now the bad year has closed red and you have quietly written it off as tuition. That is the normal reaction, and in Hungary it is also a mistake, because the Personal Income Tax Act contains a mechanism that lets you reach backwards and recover tax you already paid on the two preceding years.

It is called adókiegyenlítés, tax equalisation, and it sits in the part of the law that deals with income from controlled capital market transactions. Almost nobody uses it. Partly because it is buried in a paragraph nobody reads, partly because it only works if you did several boring things correctly in the years before the loss, and partly because most Hungarian traders using a foreign broker never declare this income properly in the first place, which removes the ground the claim would stand on.

This article explains the mechanism, what has to be true for it to apply to CME futures traded through a foreign broker, and what quietly disqualifies you.

What counts as a controlled capital market transaction

Everything here depends on one classification: whether your trading counts as an ellenőrzött tőkepiaci ügylet, usually abbreviated ETÜ, under section 67/A of the Personal Income Tax Act (Act CXVII of 1995). The consolidated text of the Act is available in the Hungarian National Legislation Database, which is the authoritative source for the current wording.

The category exists to give ordinary investors a clean, favourable treatment for transactions carried out on a proper, supervised market rather than in private deals. In outline, a transaction falls into it when it is concluded with an investment service provider, when that provider and the activity are subject to supervision by the Hungarian central bank or by the competent supervisory authority of an EEA or OECD member state, and when the transaction takes place on a money or capital market in a way the supervisor can see.

For a Hungarian resident trading CME index, energy or metals futures through a supervised foreign broker, the standard reading is that this qualifies. The United States is an OECD member state, US futures brokers are supervised, and CME is a regulated exchange. The Magyar Nemzeti Bank, which supervises Hungarian financial and capital market institutions and the firms operating here, is the reference point for the Hungarian side of that test, and it is also where you check any firm claiming to be supervised in Hungary.

Two caveats worth knowing, because they come up.

First, the United States terminated its double taxation treaty with Hungary, and its provisions ceased to apply from 2024. That has real consequences elsewhere, notably for withholding on US-source investment income, and it is worth raising with your adviser. In the usual reading it does not remove futures on a US exchange from the ETÜ category, because the test in the Act turns on supervision and OECD membership rather than on a treaty. Ask the question anyway rather than assuming.

How the year is calculated first

Before the two-year offset makes sense, you need to see how a single year works, because the netting inside the year does most of the heavy lifting and people miss it.

ETÜ income is not calculated trade by trade. You take the whole tax year and net it: all the gains on qualifying transactions, less all the losses on qualifying transactions, less the costs directly associated with them, such as the fees and commissions charged by the provider. What comes out is a single figure for the year.

• If the figure is positive, that is your income from controlled capital market transactions for the year, and personal income tax at 15% applies to it.
• If the figure is negative, you have an ETÜ loss for the year, and this is the raw material for adókiegyenlítés.

Note what this already gives you. A year in which you made 40 winning trades and 60 losing ones is not taxed on the 40. It is taxed on the net. Traders who come from a country with per-transaction taxation often over-pay in Hungary simply by declaring gross profits, which is an expensive way to be tidy.

One more point that matters and is frequently misunderstood: unlike some other categories of Hungarian capital income, income from controlled capital market transactions is generally not subject to the 13% social contribution tax. The szocho rules have been amended repeatedly in recent years, including changes to how interest income is treated, so confirm the current position for the year you are filing rather than relying on what was true three years ago. But the structural point stands: the ETÜ category is favourable precisely because of what it does not attract.

The two-year offset itself

Here is the mechanism.

If the tax year produces an ETÜ loss, you may claim adókiegyenlítés in your annual personal income tax return. The claim is a tax credit, not a deduction from income. It is computed from the loss at the applicable tax rate, and it is capped by the ETÜ tax you actually declared for the two preceding tax years, reduced by any adókiegyenlítés you have already used against those years.

Three consequences follow, and they are the whole practical shape of the thing.

It looks backwards, not forwards. This is not a loss carry-forward. You are not banking the loss against future profits. You are recovering tax already paid. If you lose money in your very first year of trading, there is nothing behind you to recover and the loss produces nothing.

The window is exactly two years and it rolls. A loss in the current year can reach the two years immediately before it, and no further. Profits from four years ago are out of reach, however much tax you paid on them.

It only works if the earlier years were declared. The cap is the tax you declared on ETÜ income in those years. If you had profitable years and never put them on a return, there is no declared tax, therefore no cap to claim against, therefore no adókiegyenlítés. Worse, you have now drawn attention to two undeclared years by trying to claim on the third.

A worked example with round numbers

Illustrative figures, chosen to be easy, not to represent anybody's real results.

Year	Net ETÜ result	Tax at 15%
Year 1	Profit 4,000,000 HUF	600,000 HUF paid
Year 2	Profit 2,000,000 HUF	300,000 HUF paid
Year 3	Loss 3,000,000 HUF	Nothing due

In year 3 you are sitting on a 3,000,000 forint loss. Fifteen per cent of it is 450,000 forint. Behind you are two declared years carrying 900,000 forint of ETÜ tax between them. Because the credit you are claiming is smaller than the tax already paid in the reference period, the mechanism can give it back to you: the 450,000 reduces the tax payable in your year 3 return, and where there is nothing to reduce, it becomes refundable.

The return itself performs the calculation on the statutory basis, so do not try to reverse-engineer the arithmetic by hand and then argue with the form. What you need to understand is the shape: a loss year is worth up to 15% of itself in recovered tax, provided the two years before it were profitable and declared.

Now invert the example. Same loss, but year 1 and year 2 were flat, or were profitable but never declared. The 450,000 forint is worth nothing. Same trader, same skill, same market, and the difference is entirely administrative.

Nobody is going to do this for you

A Hungarian brokerage issues you a tax certificate and the data feeds into the system. A broker in Chicago does not. It has never heard of NAV, it will not report anything to Hungary on your behalf, and the pre-filled draft return that NAV prepares for individuals will not contain a single forint of your futures results.

Which means the entire chain is your job:

• Compile the year's transactions from your broker statements and net them, including fees and commissions.
• Convert to forint according to the rules in the Personal Income Tax Act, which work from official exchange rates. Fix your method with your adviser at the start and apply it consistently across the whole year rather than picking rates that flatter individual trades.
• Enter the result in the correct line of the annual return, and, in a loss year, make the adókiegyenlítés claim explicitly. It is not automatic.
• File by the deadline. The annual personal income tax return for individuals is due in the spring following the tax year, and the current date and forms are published by NAV, the National Tax and Customs Administration.

NAV publishes plain-language guidance in its series of information booklets, the információs füzetek, which are updated each year and include material on capital income and on the personal income tax return. They are free, they are in Hungarian, and they are considerably more reliable than any forum. Read the current year's edition before you file.

What quietly disqualifies you

The claim usually fails for unglamorous reasons. In rough order of frequency:

• Undeclared good years. Covered above, and by far the most common. The mechanism is a refund of tax paid. No tax paid, no refund.
• No documentation. You need statements showing each transaction, the dates, the amounts and the fees, and you need to keep them for the statutory retention period. A screenshot of a P&L curve is not evidence. Download the statements monthly, because brokers do not keep them available forever and account closures have a habit of taking history with them.
• Sloppy currency conversion. Your results are in dollars. Your tax base is in forints. If your method is undocumented or inconsistent, the whole calculation is open to challenge, and the challenge will not be resolved in your favour.
• Filing late or amending badly. There are procedures for correcting a return. Use them properly rather than hoping.

What this changes about how you plan

Understanding the mechanism should change two things in how you run the year.

First, declare every profitable year, even small ones, and especially in your first years. That declaration is not just compliance. It is the asset that makes a future loss recoverable. A trader who declares a modest profit in years one and two has built a two-year buffer of recoverable tax. A trader who stayed quiet has built nothing, and the first real drawdown costs full price.

Second, think about the calendar at year end, carefully and with advice. Because the year is netted, the timing of realising gains and losses inside the year affects which year they land in, and therefore which two-year window they can reach. That is a legitimate thing to think about with an accountant. It is not a licence to invent transactions, move positions around for no commercial reason, or backdate anything, and the line between planning and something else is one you should have a professional draw for you.

A third thing, which is less about tax: none of this makes losing money a good outcome. Recovering 15% of a loss is still an 85% loss. The mechanism is worth using because it exists and it is yours, not because it changes the underlying arithmetic of trading leveraged futures, which remains that you can lose more than the amount you deposited, that costs are certain and returns are not, and that a bad year is a real bad year regardless of how it is declared.

A short checklist

• Confirm with an adviser whether your activity qualifies as ETÜ, in writing, before you file anything.
• Download broker statements every month and store them somewhere that is not the broker.
• Net the year, including all fees. Do not declare gross gains.
• Convert to forint by a documented, consistent method.
• Declare profitable years, however small. That is the buffer.
• In a loss year, make the adókiegyenlítés claim explicitly in the return. It will not appear by itself.
• Read the current NAV information booklet each spring before filing, because the details move.

This article is general information about Hungarian tax rules, not tax or legal advice, and it does not take account of your circumstances. The Personal Income Tax Act is amended every year and the treatment of individual cases depends on facts only your adviser can see, so check the NAV and National Legislation Database sources linked above and consult a Hungarian accountant or tax adviser before filing a return or making a claim.

adókiegyenlítés for trading losses

Educational content, not investment advice. Trading futures involves substantial risk of loss and is not suitable for every investor. Any reference to Algomyth results is hypothetical, simulated over historical data, and shown in full on the performance page; past performance does not guarantee future results.