Law Firm LeitnerLaw Szabó & Partners is established

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.

Fiduciary Asset Management: Don’t Repent at Leisure From Work Done in Haste

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 kind of tax incentives are available for corporates on the field of environmental protection and energy efficiency investments?

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.

Experience of the 2022 tax audits

 

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.

Changes as of 2023 affecting the extra-profit taxes

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.

Hurry up if you want to create a fiduciary management structure with favourable terms

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.

Summer changes affecting corporate taxation

 There have been further changes to corporate taxation in July.

Changes as of July 2023 affecting the taxation of individuals

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.

What and how will be audited in the field of customs and excise products 2023?

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.

Priority audit targets of the Hungarian Tax Authority in 2023

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.

2 days before of the introduction, the EPR rules were significantly changed

On June 29, 2023, the rules of the extended producer responsibility system were amended by a government decree (no 276/2023. (VI-29)). Since the affected taxpayer did not have enough time to prepare for the new rules, it is worth to carry out further impact analyses in the period after the entry into force of the decree in order to accurately fulfill the obligations and calculate the additional burdens.

EPR fees are available

As of 1st July 2023, the rules of the extended producer responsibility scheme (EPR in short) must be applied in Hungary. The essence of this is that the manufacturers/first domestic distributors is obliged to assume the financial responsibility for the waste management of their products, and they must bear the costs of collecting and disposing of the waste generated from the so-called circular products.

The revised eVAT is coming soon! Notice

Testing of the automated VAT declaration system is expected to finally start this autumn, and the system is scheduled to be ready for deployment in 2024.

The introduction of eVAT was originally planned for 2021 but was postponed in the last moment.

Another step towards a recycling economy - the extended producer responsibility scheme

The economic model based on single consumption is polluting and wasteful, therefore the implementation of a circular economy has become one of the main goals of the European Union’s environmental and economic policies in recent years. The idea is to extend the life of products as much as possible and minimise waste, rather than consuming them once.

Family tax allowance for foreign individuals

The Hungarian labour market is increasingly characterised by an influx of foreign workers, which intensified after the outbreak of the Russian-Ukrainian war. However, there are often tax issues for foreign workers, such as what tax benefits they are entitled to.

The issue of entitlement to family allowances is discussed below.

Do not fall into a VAT Trap: Manufacturing or Toll Manufacturing Makes a Huge Difference

Hungary is often mentioned as a country of manufacturers, but there is a significant difference from a tax point of view between manufacturing independently or on demand, when a foreign customer engages a Hungarian firm to make products using the customer’s raw materials. And it can be expensive to make a mistake in evaluating the nature of the transaction!

TAXATION OF EMPLOYMENT IN HUNGARY

In the following guideline we will provide detailed information about the taxation of employment in Hungary. If you are considering doing business in Hungary, or you need a reliable partner in tax advisory, accounting, payroll or auditing, don't hesitate to contact us! We are dedicated to help our clients with our high quality, tailored ser-vices to find the best economic solutions

TAXATION OF CORPORATIONS IN HUNGARY

In the following guideline we will introduce the main principles of corporate income taxation in Hungary. If you are considering doing business in Hungary, wish to improve the tax position of your corporation or simply face with any direct taxation problems; please don't hesitate to contact us for further information! LeitnerLeitner Hungary offers its full-scope professional assistance in taxation and accounting matters.

TAX ALLOWANCES

Numerous subsidies and tax allowance forms partially backed with European Union aid resources are still available in Hungary. For investment projects; however, we also highly support to always consider the taxation impacts carefully and not to forget about the potential related tax allowances – for which LeitnerLeitnter offers its professional assistance for tax optimization and allowance claims.

SECTOR RELATED AND OTHER TAXES

Hungary applies numerous other business related taxes such as sectoral taxes or surtaxes, local taxes, duties, environmental and health care taxes. This guideline provides for a short summary of them. Keep in mind, that taxation in Hungary is a swiftly and often changing area, especially in the category of smaller, sector related taxes. We highly recommend hiring professional tax advisors in order to meet the expectations of the tax authority and avoid charges. Please contact us for more information!