Based on the publication provided on the website of the Hungarian government the following changes will be introduced during 2012 and from 1 January 2013. This is only preliminary information, which may be modified.
1. Transfer duty – bad news to real estate distributors
Based on the proposed changes transferring the shares of a company owning real estates between related parties will only be exempt of transfer duty if the main activity of the purchaser is leasing, operating or purchasing/selling real estates. Real estate distributor companies will not able to apply the transfer duty exemption!
2. Personal income tax
The employee should require from its employer to apply the tax base multiplied with 1,27 if the total revenue will be more than 2.424.000 HUF on annual basis. Therefore the potential additional tax liability may be higher (currently only 12% difference penalty should be paid) .
3. Corporate income tax
In case of public benefit organization the tax base can be decreased with 20% of the provided support if a support agreement is concluded between the entities (currently permanent support agreement is required, which requires an ongoing contribution). Further change that the extraordinary income due to dividend which has been incurred in the previous periods can be deducted from the corporate income tax base without time limitation.
4. Social security
Every Hungarian resident individual should pay social service contribution from 1 January 2012 (with retroactive effect).
5. Tax procedure
- Good news that the tax shortfall, which has came to power on the basis of the resolution of the tax authority cannot be executed until the deadline for the jurisdicial appeal is not elapsed
- From 1 September 2012 the document submitted by the Tax Authority should be treated as posted on the date of submission if the document cannot be posted to the taxpayer, or the post office submit the document two times. The Tax Authority is not liable to inform the taxpayer regarding this matter, however this fact will be published on the webpage of the Tax Authority and the taxpayer will be informed electronically regarding this matter.
- Until 31 March 2013 every employer should provide information to the Tax Authority regarding loans/supports provided to the employees.
6. Company procedure
The annual report should be submitted until the statutory deadline. If the deadline is missed the Tax Authority can levy default penalty without any notification. This may be applied with the annual reports, published in 2012!
7. Medicine supply
Good news to the medicine suppliers the extra tax on the margin on selling medicines and medical related instruments is going to be cancelled.
8. Value added tax
From 1 January 2013 the tax number of the purchaser of the service should be indicated on the invoice if the VAT on the invoice is more than 500.000 HUF. Furthermore the tax number, the number of the invoice should also be indicated in the VAT return per invoices (this should mean significant additional administration)! This administration should be done if the taxpayer issue invoice, which includes VAT more than 500,000 HUF.
9. Extra tax of financial institutions
The financial institutions should pay 50% contribution on the basis of the “group credit law” provided by the Hungarian state. This contribution can be decreased certain benefits (i.e. releasing receivable connecting to real estate, financial leasing agreement, etc.)