In Hungary, the bill T/6351 („Summer Tax Package”) – including many modifications – is still under negotiation, but since July 1, 2019, changes have already taken place as a result of previous regulations.
These changes are briefly summarized below.
The rate of Social Contribution Tax decreased from 19.5% to 17.5 % for both (in)dependent/other incomes and for the so-called benefits in kind.
A related change in legislation is the modification of special tax base calculation described in section 29 § of the Personal Income Tax. According to the legislation mentioned above, if the individual itself is obliged to pay the social contribution tax after income (unless it is covered by a third person), now 85% of the income should be considered as tax base instead of the former 84%.
Additionally, car allowance for large families was included in the list of tax-exempt benefits – free as well as the interest rate subsidy and baby waiting support (under the Government Decree of Baby Waiting).
Similarly, the payers shall pay 17.5% tax instead of the previous 19.5% as Simplified Contribution to Public Revenues (EKHO).
The supply base under Small Taxpayer’s itemized lump sum tax (KATA) for full-time small taxpayers have also changed in positive direction. Small taxpayers (KATA) qualify as an insured person, i.e. they are able to qualify for all benefits. As of July 1, 2019, the basis for the calculation of these benefits is HUF 98,100 (previously HUF 94,400) per month, and HUF 164,000 (previously HUF 158,400) in the case of a higher amount of item tax.