Friday 17 April 2020

Surtaxes levied to finance the economic package

Surtaxes are intended to make up for missing revenues and to cover increased expenditures.



Retail surtax

The retail surtax returns to the Hungarian tax system with an effective date of 1 May 2020. It entails companies operating in the retail sector independent from the method of sale, i.e. it also applies to e-commerce. The following activities fall under the scope of the surtax:

  • Sale of motor vehicles, including the sale of cars, light vehicles and other vehicles, but not including the wholesale of motor vehicles and trailers
  • Retail trade of motor vehicle parts and accessories
  • Sale, maintenance and repair of motorcycles and related parts and accessories, excluding the repair and wholesale of motorcycles
  • Any other retail trade (such as sale of non-specialized items, food, beverages, tobaccos, automotive fuel, information and communication equipment, other household equipment, cultural and recreation goods, other goods, retail sale via stalls and markets, distance selling, e-commerce and other retail sale)
  • all in which the customer may be a private person as well.
The tax liability shall be determined based on the net turnover; the bands and rates equal to the ones of the legislation in 2010:

  • HUF 0 up to a turnover of HUF 500 million;
  • 0.1% between a turnover of HUF 500 million and 30 billion;
  • 0.4% between a turnover of HUF 30 billion and 100 billion;
  • 2.5% over a turnover of HUF 100 billion.
Net turnover of related parties defined by the Hungarian Act on Corporate Income Tax shall be added up and then divided in proportion of their turnover.

According to the legislation, monthly advance payment liability shall be paid, the due date of the first advance payment is 31 May 2020. Further, the tax return on the advance payments of the whole year shall also be submitted until this deadline. The basis of the advance payment liability is the turnover data of the previous business year which may result in potential overtaxation, which may be reduced with claims.

Surtax of financial institutions

The surtax of financial institutes becomes due in three equal instalments by 10.6, 10.9. and 10.12.2020. Its tax base equals to the already existing banking surtax for 2020 for the tax base exceeding HUF 50 billion. The tax rate is 0.19%. The respective decree is in force from May 1.

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