In our next series of articles we summarize the changes concerning corporate taxation, which came into force as a result of the summer tax package 2019.
Group taxation
The rules on group taxation have been clarified in many places in order to make them easier to understand and to applicable in practice. The procedural rules applicable to existing group members have been also changed.
Further, if a member of the group does not or does not fully comply with the legal conditions, it will only result in termination of the membership of the group member concerned. This rule is applicable since August 23, 2019.
Trust fund
The definition of the trust fund was created, which appears as a new type of taxable persons liable for CIT payment.
Facilitation the requirements of the development tax allowance
For small and medium-sized enterprises (SMEs), the investment thresholds required for applying the development tax allowance are favorably changing, which are constantly decreasing over a period of 3 years.
Small businesses
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Medium-sized enterprises
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As of July 24, 2019:
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HUF 300M
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HUF 400M
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2021:
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HUF 200M
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HUF 300M
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2022:
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HUF 50M
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HUF 100M
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Furthermore, for investments registered as of 1 January 2020, where up to now there was a condition for the increase in the number of employees, only its maintenance shall be accomplished.
Cancellation of the obligation of corporate tax advance replenishment
From 2019, the obligation of the CIT replenishment by December 20 is no longer due.
Pursuant to the provision, effective July 24, 2019, the monthly prepayment liability is due by December 20th and the quarterly prepayment by January 20th of the following year.
Implementation of ATAD provisions –exit tax and hybrid mismatch rules
The taxation of withdrawal of capital (so-called ‘exit tax’) under EU directives has been intro-duced in cases, where the taxation right on moving business management transfers abroad.
Moreover, affiliated companies are not permitted to apply a cost, expense, pre-tax profit reduction to the tax base, if it results from the fact that the affiliated companies operate in different states that treat the same situation differently and, as a result, the company would pay no tax anywhere.
Please do not hesitate to contact us to get the most out of your tax allowances available!
