Personal income tax
Extended range of tax-exempt incomes
- subsidy for immovable property stated in separate governmental decree
- U21 related certain benefits
- Vaccine, medical screening
Corporate income tax
Modified definition of CIT PE
The activity of a foreign supplier generates CIT PE in Hungary, if
- it provides services in the territory of Hungary with employee or by any other type of working relationship, and the duration exceeds 183 days in any 12-month period.
- according to the valid double tax treaty it is considered as CIT PE.
Bad dept against related entity
Declaration to the tax authority is not needed, but detailed records should be kept.
Special rules for exit
The exit tax can be paid in 5 equal instalments if the direction of exit (of place of management, assets, or PE) from Hungary is
- other EUR member state, or
- other EEA member state which has valid mutual agreement on claim recovery
TP tax base modification
In case tax base decrease due to TP related adjustment declaration of the “increasing” party is not needed in all case.
Small Business Tax, Low-Bracket Enterprise Tax (KATA, KIVA)
Small business tax rate: 11%
Changes in enter conditions:
- Revenues does not exceed 3,000 million HUF
- Balance sheet total does not exceed 3,000 million HUF
Changes in exit conditions:
- revenues exceed 6,000 million HUF
- tax overdues over 1 million HUF would trigger losing of Small business tax option, but it can be avoided if the shortage is covered before the negative statement of the tax office enters into force.
Small-bracket enterprise tax changes:
- Payment from one costumer of small-bracket enterprise over 3 million HUF is subject to 40% extra tax (tax base = exceeding part).
- Payment from related entity is subject to 40% extra tax (tax base = full amount).
- Extra revenue tax threshold remains 12 million HUF, excluding the revenues subject to 40% extra tax.
Changes in vehicle tax
The handling of tax is relocated from municipalities to the national tax authority.
Value added Tax
VAT reclaim on bad dept becomes available in case of B2C relation as well.
On-line data supply
All invoice shall be reported to the tax authority automatically and on-line, except EU service provision. The data supply shall contain the followings:
- invoice number
- currency of tax base
- without personal data of natural person
- data about free-of-charge transactions
- differences in case of advance payment
Distance selling (from 1st July 2021)
The threshold of EUR 35,000 for EU distance sale is decreased to EUR 10,000 (in accordance with the new EU directives).
In case of distance sale from 3rd country the maximum value of the product can be EUR 150.
Changes in Rules of Taxation
- Payment relief for reliable tax payers is available if the net tax overdue does not exceed HUF 3 million.
- Payment relief is not available for tax payers participating in VAT-group or CIT-group without personal data of natural person
- Natural persons may opt for an interest free 12-instalments payment relief for (1) tax obligation not exceeding HUF 1 million and (2) personal income tax not exceeding HUF 500.
- New tax payers mentoring program is extended from 6 months to 1 year.
The range of duty-free official procedures was widened considerably. All 1st instance procedures in civil services became duty-free.
Local Business Tax
- construction activity not exceeding 180 days generate no local tax obligation
- in case of tax base proportioning between municipalities the cost of company cars shall be divided as well
- in case of TP related tax base adjustments written declaration of other party is needed
Social Insurance minimum fee
The minimum fee from 2021 is HUF 8,000 / month.