Hungary’s Fight Against Tax Evasion

Tax fraud and tax evasion are global challenges that affect not only our lives in Europe but also in many developing countries. Developing countries fall short of considerable financial resources because of the harmful tax evasion practices of multinational companies that otherwise could increase financial capacities of the host country.

The Hungarian DemNet foundation, together with 12 European civil society organizations launched a joint, EU funded project in January 2013 aimed at raising awareness of decision-makers and the broader public about the harmful practices of illicit capital flows and tax evasion. During the three-year project the participating countries will publish several research studies bringing together some of the best experts from NGOs, public administration, private sector and academia to shed light on the harmful effects of illicit capital flight.

The first round of the project aims at illustrating the impact of capital flight on development work through case studies and examples and examines what EU and its member states do and could do to improve the situation. Furthermore the study introduces a situation analysis in case of the 13 participating countries. The research found that even though the Hungarian money laundering regulations are in compliance with respective EU regulatory frameworks to prevent harmful capital flight and tax evasion, the national taxing system is far from being transparent. The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (GFT) exempted Hungary from providing regular follow-up reports and considered as an improving jurisdiction in implementing the internationally agreed tax standards. Despite these achievements there are still desired improvements regarding the availability of information of ownership issues, especially information available on foreign companies operating in Hungary. The country report on Hungary claims, that in spite of the increasing public awareness of harmful consequences of offshore flows, tax solidarity towards developing countries is still missing from the Hungarian public discourse. This is strongly reflected in the preliminary Hungarian international development policy strategy, which failed to make reference to support the fight against capital flight and tax dodging.


For more information you can read the full report here or download it from the Eurodad website.  

More information on the project (only in Hungarian) available on the DemNet website.


Information provided by DemNet