New Advertising Tax Rules Will Give Many a Headache: Important Not Only for Media Companies

As of January 1, foreign advertisers without a presence in Hungary should prepare for extremely strict sanctions for attempts to avoid Hungarian advertising taxation. The aim is that the threats are now so significant that it would not be worth the risk for anyone, says Judit Jancsa-Pék, partner and leading tax expert of LeitnerLeitner.

2017 amendments in the Hungarian VAT legislation

From 1 January 2017, the scope of goods and services subject to the reduced VAT rates will be extended.

Amendments to the taxation of employment

Hungary even historically provided very attractive taxation of corporations in an international comparison; our social security system however is quite robust. As part of the agreement between the social parties, employers and the government, a decision was made about the increase of the minimal wage and parallel reduction of employment taxes too. In our present post, we summarize the most important changes affecting employment in Hungary.

More attractive taxation alternatives for SMEs

As part of the 2017 new tax legislation, also the special taxes for small taxpayers became more attractive. Moreover, some of the opportunities might also fit to bigger taxable persons too.

New rules relating to controlled foreign companies and other low-taxed income

The fourth tax package published on 19 December 2016 completely redefines the rules of controlled foreign companies and the system of sanctions applied against them. The amendments will take effect on the 30th day following promulgation (18 January 2017); however, taxpayers may choose the application of the new rules as early as in the 2016 tax year. The rules conform to the European Union’s anti-tax avoidance recommendations, but the rapid introduction makes it almost impossible to prepare for the changes.

Tax allowances and other advantages in Hungary

The newly introduced flat 9% Hungarian CIT rate combined with the various tax allowances and tax base reductions; further, with the withholding tax exemption of dividends, interests, royalties and any other services fees to corporate recipients make Hungary a very attractive location for foreign investments. In our present post, we would like to give a hint to the wide range of tax allowances and other advances offered by the Hungarian corporate income tax legislation, with special focus to the 2017 amendments.

The world of M&A transactions according to a tax advisor

Mergers and acquisitions can have many advantages if all goes well. But they can also be harmful and produce integration difficulties, resulting in financial losses and a less productive workforce if the process does not work as planned.