It may seem that the tax authorities increasingly know who is worth auditing as surely as if they have magical or mentalist abilities. The Hungarian National Tax and Customs Administration (NAV) selects taxpayers for investigations with an increasingly sure idea of where they might find some kind of error, discrepancy or, Heaven forefend, fraud.
Transfer pricing is a priority area for 2025 tax audits!
Considering the transfer pricing strictures introduced as from 2022 (transfer pricing reporting in the yearly tax return, obligatory median adjustment, increased penalties), the Hungarian companies have to count on far more stricter Hungarian transfer pricing rules, and the possibility of more efficient tax authority actions.
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What's new for 2025?
Among the especially huge number of recent tax changes, I would like to highlight the expanding range of tax-advantaged and tax-exempt benefits for employees.
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The world of international taxation is undergoing significant change with the introduction of the global minimum tax (GloBE) framework. This new system aims to fairly distribute tax rights among countries where these corporations operate, ensuring that they contribute to the tax base of each country.
To ensure the safety and smoothness of lending practices, it was deemed necessary to make information on company pledges more transparent. Therefore, according to the new rules of the Company Act, firms with credits have to register the amount of their pledges.
Employment-related costs, increasing fluctuation and workforce difficulties strengthen the need for Human Resources solutions. How to satisfy employees and whether the salary alone is enough to motivate them in the long term is a lengthy debate. Still, it is very likely, when considering the market situation and the available remuneration, that money counts.
There are no boring years in taxation. 2024 also promises exciting challenges for anyone involved in tax affairs.
2023 was all about fiduciary asset management (family trusts or family foundations) in the lives of Hungarian business-owning families. Because the legislature abolished an old option to reevaluate businesses and enjoy tax benefits, fear of change prompted many to take immediate action. That could leave many legal questions open, which should be looked at now.
What is the number one challenge facing the financial sector in Hungary today?
Nowadays the economy has to face not just one challenge, but several at once. It is usually called “poli-crisis”, which is the number one challenge – and all its parts in itself has an impact on our areas, meaning for LeitnerLeitner/LeitnerLaw financial, accounting and auditing, tax consultancy and legal support. Issues raised by war, climate change, competitiveness, digitalization and increasing authority control brings to life new and new framework both internationally and domestically. Even one of these would be enough to rethink ones’ strategy, to rationalize and adapt. During consulting, it is vital to consider the uncertain, constantly changing environment and to develop flexible solutions for our partners.
2024 marks another milestone for the LeitnerLeitner group: on 1 February, LeitnerLaw Szabó & Partners Law Firm will start its work in close cooperation with the LeitnerLeitner offices, which celebrate 30 years of operation this year. As a result, LeitnerLeitner and LeitnerLaw clients will now have access to a wide range of economic and business-related services in-house, from domestic and international tax advice to accounting, payroll, auditing and transfer pricing, and now including comprehensive legal services.
2023 was all about fiduciary asset management (family trusts or family foundations) in the lives of Hungarian business-owning families. Because the legislature abolished an old option to reevaluate businesses and enjoy tax benefits, fear of change prompted many to take immediate action. That could leave many legal questions open, which should be looked at now.
Hungary provides various tax incentives, including discounts and subsidies
for environmental protection and energy efficiency investments. However, the
conditions and rules for obtaining the incentives changes from time to time, so
it is highly advisable to consider before the commencement any similar
development.
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As it is well known, one of the
main tasks of the Hungarian Tax Authority is to ensure budget revenues by
collecting taxes and other public charges. The success of this is also linked
to the fact that taxpayers are not entirely voluntary and autonomous in
meeting their tax obligations, but they are aware of their controllability. This
possibility provides a powerful incentive to comply.  |
Sectoral special taxes are part of our life since the financial crisis of 2008, further as of the summer of 2022 there are extra burdens, extra-profit taxes, introduced in certain sectors. Companies operating in the financial, banking, and insurance sectors, in the energy sector, in aviation, in telecommunication, and in the pharmaceutical industry, further in the retail sector, had to take a larger part than before in maintaining the balance of the central budget.
Those who still want to take advantage of one of the biggest tax advantages of the fiduciary asset management scheme, the possibility of tax-free revaluation, are able to take advantage of the favourable rules until mid-September. After that, the provisions on asset management will become stricter, but due to the other advantages of the scheme, it will worth to consider the creation of the structure in the future in order to preserve the unity of the assets or to make inheritance more flexible. However, it is important to carefully consider the family, legal and tax consequences.
There have been further changes to corporate taxation in July.
This summer, the tax law has changed at several points, which also affect private individuals, the summary of the most important amendments are summarized as follows.
In addition to the general tax obligations affecting the taxation of companies and individuals, the Hungarian Tax Authority pays special attention this year to the legal compliance of the customs and excise field. The audit directions for 2023 are presented in this article.
In 2023, the Hungarian Tax Authority will continue to support, control or punish the taxpayer based on the taxation behavior.
It strictly punishes tax fraud and intentional
tax evasion. The authority can act more and more quickly, thereby collecting
the planned revenues more and more effectively. Based on the risk analyses, it
conducts legal compliance investigations, tax and customs inspections or
support procedures.
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