Extra-profit taxes

 The Government of Hungary will introduce an extra-profit tax from 1 July 2022.

Expected extra-profit tax income from the different sectors:

Sector	billion Ft
Bank and financing	250
Transaction tax	50
Insurance	50
Energy	300
Retail	60
Telecommunications	40
Airlines	30
Pharma	20
Advertising	15
Total	815

Credit institutions and financial enterprises

An extra profit tax will be introduced for the tax years 2022 and 2023 within the framework of special taxes maintaining the balance of public finances:

• The special tax is based on net sales according to the Local Tax Act.
• The rate of the special tax is 10% in 2022 and 8% in 2023.
• The special tax for the tax year 2022 must be established and declared by 10 October 2022, and paid in 2 equal instalments by 10 October and 10 December 2022.
• The special tax for 2023 must be established and declared by 10 June 2023, and the tax must be paid in 3 equal instalments by 10 June, 10 October and 10 December 2023

For the year 2022, the tax base shall be determined on the basis of the net sales for the full tax year beginning after 31 December 2021, including 1 July 2022.

A credit institution or financial enterprise that expires or is excluded from the scope of the special tax for any other reasons during the year shall pay the extra profit tax within 30 days.

Producers of petroleum products

Producers of petroleum products will also be required to pay a special tax in 2022 and 2023.

• The special tax is to be determined on the basis of the difference in world market prices for crude oil originating in the Russian Federation and the quantity of barrel of crude oil purchased from the Russian Federation during the month in question.
• The difference should be calculated as the between the world market price of crude oil and the arithmetic average of the Mid values (US dollars / barrel) of the daily quotations of Platts Cruide Oil Marketwire Brent (Patts Dated Brent-PCAAS0) for the month in question and the purchase price of crude oil from the Russian Federation per barrel. The MNB's average US dollar exchange rate for the month in question is used for forint conversion.
• The purchase price cannot be reduced by the purchase invoice price.
• The rate of the special tax is 25%.
• The special tax must be assessed, declared and paid monthly by the 20th day following the month in question.
• The special tax for the period from 1 January to 1 July 2022 must be declared and paid by 20 September 2022.

The tax liability for 2022 is for the full tax year beginning after 31 December 2021, including 1 July 2022.

A company that ceases to exist or is exempted from the special tax for any other reason during the year must pay the extra profit tax within 30 days.

Tax liability of electricity produced from renewable sources or waste

The special tax liability also covers electricity produced from energy from renewable sources or waste, as well as cogeneration. Excluding power plants with an installed capacity not exceeding 0.5 MW.

The taxpayer will be the eligible producer. Including a producer eligible for the green premium type subsidy covered by the METAR Regulation, if his subsidy contract under KÁT (mandatory take-over system) expires in the tax year 2022 or 2023, or starts his commercial operation during this time, but does not enter into a contract under KÁT.

• The special tax is based on the positive amount multiplied by the product of the turnover after the amount of electricity fed into the electricity network in the relevant month and the mandatory take-over or subsidized price set by the Public Utilities Regulatory Authority.
• The rate of the special tax is 65%.
• The tax must be assessed, declared and paid monthly by the 20th day following the month in question.

The tax liability for 2022 is for the full tax year beginning after 31 December 2021, including 1 July 2022.

A company that ceases to exist or is exempted from the special tax for any other reason during the year must pay the extra profit tax within 30 days.

Investment vehicles

A transaction tax is payable on the purchase of investment vehicles and financial instruments issued by KELER:

• The basis of the transaction tax is the value (purchase price) of the financial instrument credited to the client’s account (securities account).
• In the case of foreign currency, the forint amount must be determined on the basis of the official exchange rate of the Hungarian National Bank valid on the settlement date.
• The rate of the fee is 0.3%, but not more than HUF 10,000 per purchase.
• The Hungarian State Treasury and the Postal Clearing House are exempt.
• The obligation must be established, declared and paid monthly, until the twentieth of the month following the day of performance, rounded to the nearest HUF 1,000.
• For the first time, the transaction fee due by that date must be paid by September 20, 2022.

Contribution of airlines

Contribution payment is also required for air passenger transport activities, the payment of taxes must be made by the ground handling business organization.

• The contribution is based on the number of domestic passengers of the aircraft served by the passenger service, excluding transit passengers.
• The level of contribution varies according to the final destination of the passengers:

o    HUF 3,900 per passenger to the European Union, as well as to Albania, Andorra, Bosnia and Herzegovina, Northern Macedonia, Iceland, Kosovo, Liechtenstein, Moldova, Monaco, Montenegro, Great Britain, Norway, San Marino, Switzerland, Serbia and Ukraine after passengers,

o    HUF 9,750 per passenger to countries other than those specified above. 

• The contribution must be established, declared and paid monthly by the 20th day of the following month.
• The taxpayer must keep records suitable for supporting the payment of the contribution

Increased company car tax

From 1 July to 31 December 2022, an increased motor vehicle tax will be payable. The monthly rate of company car tax varies depending on performance and environmental rating.

 

	A	B	C	D
1.	Performance (kW)	„0”-„4” Environmental rating	„6”-„10” Environmental rating	„5”, „14-15” Environmental rating
2.	0-50	30,500 forint	16,000 forint	14,000 forint
3.	51-90	41,000 forint	20,000 forint	16,000 forint
4.	91-120	61,000 forint	41,000 forint	20,000 forint
5.	over 120	81,000 forint	61,000 forint	41,000 forint

Pharmaceutical distributors

In 2022 and 2023, the holder of the marketing authorization for medicinal products, as well as the domestic distributor and the distributor of the baby food will be subject to a special payment obligation.

The rate of the tax is 20% for medicinal products with a producer price not exceeding HUF 10,000, and 28% above that.

The tax liability shall be applied for the first time to the payment obligation due by 20 July 2022.

Producers of the manufacturing industry

By 2022 and 2023, the producers of the manufacturing industry will also be subject to the Robin Hood tax liability. These include bioethanol producers, starch and starch product producers, and sunflower oil producers.

• The tax advance payable for the 2022 tax year must be declared by 20 September 2022 and thereafter paid in equal monthly instalments by the 20th day of each month.
• The tax advance for the 2023 tax year must be declared by 20 January 2023 and paid in equal instalments by the 20th of each month.
• The tax liability for 2022 covers the full tax year beginning after 31 December 2021, including 1 July 2022.

Tax liability of the film industry

The daily net income from casual work of the film industry statistics used in the framework of simplified employment may not exceed 12 % of the minimum wage valid on the first day of the month, rounded to the nearest HUF 100.

• Employers' public charges for simplified employment will increase to 0.5%, 1% and 3%.
• The calculation basis for simplified employment benefits will also increase to 1.4%, 2.8%.
• The increased public burden shall be paid for the first time in the case of legal employment relationships created in July 2022.

Increased public health product tax "chips tax"

The VTSZ nomenclature for determining the public health product tax will be adjusted on the basis of the text of the Combined Nomenclature in force on 15 May 2022. They redefine the tax liability of syrups and raise the tax liability in all product categories.

Electronic communication service providers

In addition to the obligation to pay telecommunications tax, persons providing electronic communications services in Hungary are required to pay an additional telecommunications tax for 2022 and 2023.

• The basis of the surcharge is for 2022 in the tax year including 1 July 2022 the net sales revenue according to the Act on Local Taxes arising from the activities of this tax year, and for 2023 in the tax year beginning in 2023.
• The rate of the telecommunications surcharge will be banded progressive, the tax is

o   0% for the part not exceeding HUF 1 billion

o   1% for the part exceeding HUF 1 billion but not exceeding HUF 50 billion

o   3% for the part exceeding HUF 50 billion but not exceeding HUF 100 billion

o   7% for the part exceeding HUF 100 billion

• The tax base of related companies under corporate tax should be aggregated if the relation was established by split-up after 1 June 2022, or if the assets of the previously operating legal entity are subsequently used by an affiliated organization.
•  A person who proves that he has carried out the above reorganisations not for tax avoidance purposes but only for economic reasons may be exempted from the aggregation rule.
• An additional advance must be paid

o   until 30 November 2022, for the tax year including 1 July 2022, on the basis of the net turnover for the tax year beginning in 2021,

o   and until the last day of the 5th month of the tax year beginning in 2023, in the amount corresponding to the additional tax established for the year 2022 for the tax year beginning in 2023.

Increasing financial transaction fees

The rules of the financial transaction tax are extended to persons providing payment services, credit and cash lending, money exchange and currency exchange intermediation services as cross-border services in Hungary. Their tax liability arises from 1 July 2022.

New taxpayers must register with the tax authorities by September 1, 2022.

In addition, the rate of the financial transaction fee will be increased to 0.3%, up to a maximum of HUF 10,000 per payment transaction.

Insurance companies

For the period from 1 July 2022 to 31 December 2023, an additional insurance tax is payable.

• The additional tax is based on the sum of insurance premiums from the provision of insurance services (first tax base) and from the supplementary insurance sectors (second tax base).
• The tax rates are as follows:

In 2022	For the first taxbase type	For the second taxbase type
Up to HUF 1 billion	4%	2%
Between HUF 1 billion - 18 billion	8%	3%
over HUF 18 billion	14%	6%
In 2023	For the first taxbase type	For the second taxbase type
Up to HUF 2 billion	2%	1%
Between HUF 2 billion - 36 billion	4%	1.5%
over HUF 36 billion	7%	3%

•  The additional tax advance corresponding to the increased tax must be established, declared and paid by 30 November 2022 and 31 January 2023.
• The surcharge itself must be determined, paid and declared by 2022 until 31 January 2023 and then by 2023 until 31 January 2024.

 The calculation of affiliates is also valid here:

• The tax base of related companies under corporate tax is aggregated if the relation was established by split-up after 1 June 2022, or if the assets of the previously operating legal entity are subsequently used by an affiliated organization.
• A person who proves that he has carried out the above reorganisations not for tax avoidance purposes but only for economic reasons may be exempted from the aggregation rule.

Increasing excise taxes

The rates of excise duties are raised in almost all categories. The tax increase for tobacco products will gradually implemented, first from 1 July to 31 December 2022 and then from 1 January 2023.

Retail surtax

In 2022, those engaged in retail activities will have to pay an additional tax of 80% over the normal tax liability.

• For the tax year covering 1 July 2022, this must be determined, declared and paid in one single amount by 30 November 2022 on the basis of the special tax for 2021.
• A taxpayer who does not have a retail tax liability in 2021 will pay an additional tax of 80 percent for the tax year beginning in 2022 based on the retail tax for that year.

And in 2023, retail tax rates will be raised, as follows:

•  0% for the part of the tax base not exceeding HUF 500 million
• 0.15% for the part of the tax base exceeding HUF 500 million but not exceeding HUF 30 billion
• 1% for the part of the tax base exceeding HUF 30 billion but not exceeding HUF 100 billion

·        After the part of the tax base exceeding HUF 100 billion, 4 whole tenths of a percent.

The tax prepayments for 2023 shall also be determined according to the new rates.

Mining, mineral resources and geothermal energy

For 2022 and 2023, the mining duty will be increased.

• 48% for crude oil and natural gas produced in hydrocarbon fields that were put into production before 1 January 2008.
•  42% for natural gas extracted and sold on free-market deriving from hydrocarbon fields put into production before 1 January 1998.
• 36% for crude oil and natural gas extracted during the trial production and on the basis of the production technical plan after 1 January 2008.

If the monthly average quotation price of the TTF natural gas rises above 18 EUR / MWh, the mining duty rate will increase by 6%.

The minimum quantity of extraction should be maintained in 2022 and 2023 compared to the 2021 quantities, provided that there is no technical or geological obstacle or force majeure.

New rules should be applied to determine the specific value of mineral resources and geothermal energy.

These provisions shall enter into force on 1 August 2022.