A number of tax measures have been introduced to reduce the effects of the economic crisis caused by the coronavirus epidemic.
Sector-specific tax / contribution relief for March to June 2020
Taxpayers’ with main activity in the following sectors get certain employment related tax reliefs:
- taxi or passenger transport, domestic water passenger transportation;
- accommodation, catering, travel agencies, tour operators;
- organization of conferences, trade shows;
- entertainment activities, film production, programming, broadcasting;
- sports, entertainment and leisure activities, gambling, betting;
- daily newspapers, publication of journals and periodicals;
- physical well-being;
- plant propagation, growing of crops, of flowers and plants (NACE 46.22);
- retail and wholesale of flowers, plants, etc; growing of grapes;
- retail of pet animals and pet food in specialized stores;
- hunting, trapping;
- distilling, rectifying and blending of spirits, manufacture of wine, beer.
The abovementioned taxpayers shall receive the following tax benefits:
- There is no obligation to pay social contribution tax payment obligation (17.50 %).
- Only the health insurance contribution in kind (4 %) is deducted from the income of individuals, which cannot exceed the maximum amount of HUF 7,710 (approx. EUR 20) per month. In other words, the employee shall receive a minimum of 14.5 % or higher net income. However, he will remain insured and be entitled to social security and labour market benefits.
- The taxpayers shall be exempt from paying the training contribution (1.5 %).
- The obligation to pay the rehabilitation contribution is only THUF 966 per person and year (approx. EUR 2,700), namely only the 2/3 amount of the original rate of THUF 1,449. Besides, no advance payment is required.
For the period of March to June 2020, small businesses (KIVA subjects), whose main activity is listed above, will not be required to consider their payments to personnel, as KIVA tax base.
Itemized Small Business Tax (KATA)
Exemption from KATA payments for March to June 2020
The legislation provides for a detailed list of activities, in case of which KATA subjects are exempt from their tax payment obligations (i.e. monthly itemized amount of HUF 50,000 (approx. EUR 140) for the period of March to June 2020. The exemption applies to those who already covered by KATA in February 2020. Examples of currently exempt activities include among others, but are not limited to, taxi or passenger transportation, hairdressing, beauty care, construction-related activities (such as electrical installation, painting, glazing, water, gas, heating, air conditioning), performing arts, human health services, event organization, hospitality, sports, leisure training, gambling, betting.
Suspension of Tax Debt - Instalment Payments
A small taxpayer may pay his KATA debt due before 1 March 2020 in 10 monthly instalments as from the first month after the quarter, in which the emergency ceases, without any additional charge.
Contribution to tourism development
There is no payment obligation between the 1th of March 2020 and the 30th of June 2020.
Social contribution tax
Social contribution tax will be decreased to 15.5% as from 1 July (current tax rate: 17.5%).
Health care contribution
The health care contribution shall be paid by the employer in case of an unpaid leave (instead of the employees themselves).
Fringe benefits
The fringe benefits of SZÉP-card payments have been extended; increased maximum payments, more preferential taxation until 30 June 2020.
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