HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
2.4.3 Engine Maintenance and Operations Where an operator, which is independent from the lessor, is registered separately, no specific liability is imposed on the lessor regarding the operation, main - tenance and insurance of the aircraft. EU laws apply in respect of these issues. Underlying Hungarian laws also refer to the general applicability of relevant EU laws. 2.4.4 Damage or Loss Caused by an Asset See 2.4.3 Engine Maintenance and Operations . 2.4.5 Attachment by Creditors Creditors of the lessee do not have any rights with respect to the aircraft under Hungarian law. Under Hungarian law, a lease is a contractual relationship which does not constitute any title of ownership for the lessee, meaning the lessee is not entitled to exercise any right of disposition or encumbrance with respect to the aircraft, other than those expressly mentioned in the lease. 2.4.6 Priority of Third Parties’ Rights The Hungarian Aircraft Register is a public and authentic register. The CAA will add rights (including other leases) to the Hungarian Aircraft Register only if they are in compliance with the terms of the previ - ously submitted documents and in accordance with the rights that have already been registered. Registration of the owner ensures its priority over all other rights (including other leases) granted over or in respect of the aircraft other than any security rights that the owner has granted to mortgagee(s) of the air - craft. 2.5 Insurance and Reinsurance 2.5.1 Requirement to Engage Domestic Insurance Companies There are no requirements to engage domestic insur - ance companies. 2.5.2 Mandatory Insurance Coverage Requirements Mandatory EU rules apply in respect of insurances to cover liability.
However, no separate stamp duties are payable for the registration of the lease, since it is always regis - tered concurrently with one of the above. 2.3.7 Registration of Aircraft in Alternative Countries This is not applicable in Hungary. 2.3.8 Requirements for Documents Concerning Registration The CAA requires the following documents to be pre - sented for registration: • relevant original documents certifying the owner - ship of the aircraft and the legal grounds of being registered as lessee in the case of the lessee; • an original official document that certifies the exist - ence of the lessor and the power of representation; • specimen signatures of relevant signatories; • relevant powers of attorney; and • the up-to-date certificate of insurance regarding the Aircraft. All documents should be provided in Hungarian (or accompanied by an official Hungarian translation). Documents should be originals or notarised copies and be legalised in the country in which they were signed. 2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor Unless the lessor has a Hungarian permanent estab - lishment through which the aircraft or the engine is leased, the lessor shall not be subject to taxes on income or revenue (see 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale ). As currently there is no withholding tax on lease fees or similar pay - ments, a lessor should not be taxed on the lease on this account. 2.4.2 Effects of Leasing on the Residence of a Foreign Lessor A foreign lessor should not be deemed to be resident, domiciled, carrying on business or liable to pay tax in Hungary solely as a result of entering into a lease agreement.
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