HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
Lakatos, Köves & Partners 1075 Budapest Madách Imre u. 14 Hungary
Tel: +36 1429 1300 Fax: +36 1429 1390
Email: info@lakatoskoves.hu Web: www.lakatoskoves.hu
1. Aircraft and Engine Purchase and Sale 1.1 Sales Agreements 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement The execution of an aircraft or engine sale agreement (including for the sale of an ownership interest in an entity) or bringing such agreement into the territory of Hungary does not incur transfer tax, stamp duty or similar charges. However, the transfer of the title of the aircraft or the engine, or the sale of an ownership interest in an entity, may give rise to tax liabilities (see 1.2.5 Taxes/Duties Payable upon Execution of a Bill of Sale ). 1.1.2 Enforceability Against Domestic Parties In order to be used as evidence before the Hungarian courts, a sale agreement will need to be translated into Hungarian. In practice, it is sufficient for most purposes if only the bill of sale is translated into Hungarian. To have full evidential power under Hungarian law, the bill of sale should be appropriately witnessed or notarised and, if executed outside Hungary, legalised. The Hungar - ian Aviation Authority, ie, the Minister of Construction and Transport, acting as the aviation authority (CAA) ( légiközlekedési hatóságként eljáró Építési és Közle- kedési Miniszter ), accepts this approach as valid for registration of a change in the ownership of an aircraft.
1.2 Transfer of Ownership 1.2.1 Transferring Title
Where an aircraft is registered in Hungary, Hungarian law applies to the proprietary (in rem) rights in relation to the aircraft. In order to transfer title to an aircraft or engine under Hungarian law, two things are required: • an agreement to transfer title to the aircraft and/or engine; and • transfer of possession regarding the aircraft and/or engine. Agreement to Transfer Title The agreement to transfer title to the aircraft (and any bill of sale) may be drafted to include all installed The transfer of possession regarding the aircraft (by virtue of which the ownership is transferred, beyond doubt, to the buyer) is a condition to the sale to be recognised, and thus an executed contract of sale in itself is not sufficient for a valid transfer. Transfer of possession in respect of an aircraft can be performed in a “symbolic” way. Transfer of title and possession is often documented by: • the delivery to the buyer of a bill of sale executed by the seller; and • acceptance of the aircraft by the buyer by delivery of an acceptance certificate to the seller. parts, such as an APU. Transfer of Possession
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