Hungary provides various tax incentives, including discounts and subsidies
for environmental protection and energy efficiency investments. However, the
conditions and rules for obtaining the incentives changes from time to time, so
it is highly advisable to consider before the commencement any similar
development.
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As it is well known, one of the
main tasks of the Hungarian Tax Authority is to ensure budget revenues by
collecting taxes and other public charges. The success of this is also linked
to the fact that taxpayers are not entirely voluntary and autonomous in
meeting their tax obligations, but they are aware of their controllability. This
possibility provides a powerful incentive to comply.  |
Sectoral special taxes are part of our life since the financial crisis of 2008, further as of the summer of 2022 there are extra burdens, extra-profit taxes, introduced in certain sectors. Companies operating in the financial, banking, and insurance sectors, in the energy sector, in aviation, in telecommunication, and in the pharmaceutical industry, further in the retail sector, had to take a larger part than before in maintaining the balance of the central budget.
Those who still want to take advantage of one of the biggest tax advantages of the fiduciary asset management scheme, the possibility of tax-free revaluation, are able to take advantage of the favourable rules until mid-September. After that, the provisions on asset management will become stricter, but due to the other advantages of the scheme, it will worth to consider the creation of the structure in the future in order to preserve the unity of the assets or to make inheritance more flexible. However, it is important to carefully consider the family, legal and tax consequences.
There have been further changes to corporate taxation in July.
This summer, the tax law has changed at several points, which also affect private individuals, the summary of the most important amendments are summarized as follows.
In addition to the general tax obligations affecting the taxation of companies and individuals, the Hungarian Tax Authority pays special attention this year to the legal compliance of the customs and excise field. The audit directions for 2023 are presented in this article.
In 2023, the Hungarian Tax Authority will continue to support, control or punish the taxpayer based on the taxation behavior.
It strictly punishes tax fraud and intentional
tax evasion. The authority can act more and more quickly, thereby collecting
the planned revenues more and more effectively. Based on the risk analyses, it
conducts legal compliance investigations, tax and customs inspections or
support procedures.
On June 29, 2023, the rules of the extended producer responsibility system were amended by a government decree (no 276/2023. (VI-29)). Since the affected taxpayer did not have enough time to prepare for the new rules, it is worth to carry out further impact analyses in the period after the entry into force of the decree in order to accurately fulfill the obligations and calculate the additional burdens.
As of 1st July 2023, the rules of the extended producer responsibility scheme (EPR in short) must be applied in Hungary. The essence of this is that the manufacturers/first domestic distributors is obliged to assume the financial responsibility for the waste management of their products, and they must bear the costs of collecting and disposing of the waste generated from the so-called circular products.
Testing of the automated VAT declaration system is expected to finally start this autumn, and the system is scheduled to be ready for deployment in 2024.
The introduction of eVAT was originally planned for 2021 but was postponed in the last moment.
The economic model based on single consumption is polluting and wasteful, therefore the implementation of a circular economy has become one of the main goals of the European Union’s environmental and economic policies in recent years. The idea is to extend the life of products as much as possible and minimise waste, rather than consuming them once.
The Hungarian labour market is increasingly
characterised by an influx of foreign workers, which intensified after the
outbreak of the Russian-Ukrainian war. However, there are often tax issues for
foreign workers, such as what tax benefits they are entitled to.
The issue of entitlement to family allowances is discussed below.
Hungary is often mentioned as a country of manufacturers, but there is a significant difference from a tax point of view between manufacturing independently or on demand, when a foreign customer engages a Hungarian firm to make products using the customer’s raw materials. And it can be expensive to make a mistake in evaluating the nature of the transaction!
Numerous subsidies and tax allowance forms partially backed with European Union aid resources are still available in Hungary. For investment projects; however, we also highly support to always consider the taxation impacts carefully and not to forget about the potential related tax allowances – for which LeitnerLeitnter offers its professional assistance for tax optimization and allowance claims.
Hungary applies numerous other business related
taxes such as sectoral taxes or surtaxes, local taxes, duties, environmental
and health care taxes. This guideline provides for a short summary of them.
Keep in mind, that taxation in Hungary is a swiftly and often changing area,
especially in the category of smaller, sector related taxes. We highly
recommend hiring professional tax advisors in order to meet the expectations of
the tax authority and avoid charges. Please contact us for more information!
In this guideline we will provide detailed
information about the legal forms of doing business in Hungary. If you have
questions about the discussed topic or about taxation in general, don't
hesitate to contact us! We are dedicated to help our clients with our high
quality, tailored services to find the best economic solutions in setting up
their business in Hungary.
In this article we will provide detailed information about the basics of accounting, financial reporting and auditing in Hungary.
Undoubtedly,
2023 will be a great challenge again for multinational companies, not least because
of the latest adjustments to transfer pricing rules. The new obligations are known
in detail and effective now; thus, affected companies must apply them as soon
as possible.
On the 1st of January
2023 numerous rules of the Labour Code has amended: new charges have been laid
on employers, rights of employees have altered. Among the others the rules of
the liability of information have changed, paternity leave has been extended,
parental leave has been introduced, and the availability and work obligations
of employees have been clarified.
