HomeIco

Home

Internal

 InternationalIco

International

 ContactIco

Contact
de|en|hu

We use cookies to personalise the website and offer you the greatest added value. They are, among other purposes, used to analyse visitor usage in order to improve the website for you. By using this website, you agree to their use. Further information can be found in our data privacy statement.
Publications Tax changes in Hungary in 2024

Tax changes in Hungary in 2024

PrintMailRate-it

Published on: 22.12.2023 / Reading time approx. 5 minutes


On November 21, the Hungarian Parliament passed bill T/5893 which contains amendments to certain tax laws affecting taxpayers. We summarize the most significant changes below



Corporate tax


New tax credit for research and development activities


A new tax credit has been introduced for research and development activities. The new tax reduction item can be granted - depending on the tax-payer's choice in this regard - as a replacement of the already existing tax allowance for R&D activities in corporate and local business tax calculations. In principle, the amount of the achievable tax reduction is 10 percent of the eligible expenses, but it cannot exceed the HUF equivalent of
  • 55 million euros for basic research,
  • 35 million euros for applied research, and
  • 25 million euros in the case of experimental development.

For basic research, applied research or experimental research carried out jointly with specified institutions, institutes and state-owned companies and on the basis of a written contract, the amount of the tax reduction can be - up to an amount of eligible expenses of HUF 500 million.

The types of eligible expenses are listed in the law and the maximum amount of tax credit can be claimed on a yearly basis. The tax reduction may be used in the same tax year when the expenses incurred or in the following 3 tax years.

​

Pre-approval for development tax incentive


The change in the law determines the cases when development tax incentive is requiring an approval from the European Commission. The government funding threshold value is increased from EUR 100 million to EUR 110 million and depending on the county, the limit is EUR 24.75 million, EUR 41.25 million or EUR 49.5 million.

Tax relief for investments and renovations for energy efficiency


The maximum amount of tax deduction is increased from the HUF equivalent of EUR 15 million to EUR 30 million (the proportion of eligible expenses remained 15 percent), however, the scope and extent of the deductible expenses are reduced. For example, expenses which are not directly achieving higher energy efficiency cannot be considered relevant for funding and energy savings must be proven in advance with an energy certificate showing to reach at least 20 percent savings for existing buildings and 10 percent for building engineering technology.

Expenses that are not in the interest of the company


Royalties and interests are not considered as expenses incurred in relation to the company’s interest if they are paid to taxpayers in countries which are categorized as “non-cooperative jurisdictions for tax purposes” or that are resident in a country where the corporate tax rate is lower than in Hungary. The list of non-cooperative jurisdictions for tax purposes would be determined in an additional ministerial decree.


Global minimum tax

The “Global Anti-Base Erosion Rules” (“GloBE”) developed by the OECD formed a framework for a harmonized tax system development of EU member states by introducing an additional tax on profits generated by companies with an effective tax rate lower than the 15 percent minimum rate identified by the OECD.

The EU Council Directive 2022/2523 on ensuring a global minimum tax level of taxation for multinational enterprise groups and large-scale domestic groups in the EUis now being implemented in Hungary.

The objective of the global minimum tax is to increase the group effective tax rate to at least 15 percent by introducing additional tax payment if the nominal tax rate is lower. As Hungary made use of the option to introduce of domestic top-up taxation at local country level, group companies operating in Hungary are subject to required top-up tax in Hungary. 

Hungarian group members of multinational companies  are subject to the domestic minimum top-up tax payment in Hungary if the group’s annual turnover reaches or exceeds 750 million euros at consolidated level in at least two years out of four years according to the previous financial statements. 

Companies operating in Hungary shall not necessarily pay additional taxes over the corporate tax rate of 9 percent as certain other taxes and duties could be taken into account when calculating the effective tax rate. In Hungary, covered tax will include local business tax, innovation contribution and energy suppliers tax beside the corporate tax.

The top-up tax paid in Hungary can be recognized and the parent company can reduce the top-up tax liability if the determination of top-up tax payment was made based on the global minimum tax rules and there were no specific or business-related state aid that ultimately leads to a reduction of the top-up tax liability.


Valu added tax

E-VAT system


From 1 January 2024, new types of value added tax declaration options will be available besides the traditional VAT return.

The taxpayer will be able to choose from three different options for the fulfilment of value added tax declaration requirements:
  • traditional option (Hungarian Tax Authority forms);
  • by accepting the tax return generated by the tax authority based on the data available in the tax authority’s electronic system, with the option for making necessary changes, and adding declarations; as well as 
  • by approving a draft tax return generated based on a machine to machine interface for the transmitted documents.

Electronic receipts


The issued e-receipt must be made available to the person purchasing the product or using the service through a customer application. At the request of the buyer of the product or the user of the service or in the cases determined by law, a printed copy should be provided.

Venue of online events


If organizers provide a venue for cultural, artistic, scientific, educational, entertainment and sports events  but the participant is not physically present, the definition of the place of performance will change. According to the previous procedure, the place where the event is performed is the place where the event is actually held. From 1 January 2025, the  registered office, residence or whereabouts of the participant will be regarded as place of performance.

Reverse VAT charge on construction and installation work


For activities related to construction and installation work on real estate which could be considered a provision of services, the tax must be paid by the user of the service if the activity requires official authorization or notification to the authorities. In these cases, the recipient of the service has to make a declaration to the service provider in writing in advance. If the official approval or the registration of the activity to the authority is related to the activity carried out by the service provider, the obligation to declare is shifted to the responsibility of the service provider from 1 January 2024.

Change in VAT rate of specific dairy products


For certain dessert cheese products, the tax rate is reduced to 18 percent, and the tax rate for certain formulas is reduced to 5 percent.


Income tax

Small value gifts


According to the current regulations, small value gifts can be awarded only once in a calendar year  amounting to the maximum of 10 percent of the actual minimum wage. The recent change in the law would increase the frequency of the allowance limit to three times per calendar year.

Furthermore, tax returns for fringe benefits and certain defined other benefits need to be submitted quarterly instead of the monthly basis. This reduces the administrative and self-review requirements for companies.

Date of tax liability for specific services


From 1 January 2024, the date of tax liability for services rendered would be the date when the relevant invoice is available if the performer and the provider are the same entities, as it reduces the required frequency of self-review. 

Place of income


In the case of income from performing, artistic and sport activities, demonstrations (exhibitions), the place of income is the country where the activity was carried out, even if the income from it is not earned by the person carrying out the activity.


Advertising tax

The adopted tax package extends the application of the current 0 percent tax rate to 31 December 2024. 

Tax on utilities

From January 2024, the obligation to pay the utility tax imposed on communication service providers will cease, and the obligation to pay the additional telecommunications tax will cease from January 2025. 

Retail tax

The retail tax changes are as follows:

If the relevant financial year for the company contains less than 365 days, proportioning must be calculated.

Accounting law

Appointing an external auditor


Apart from the appointment of an external audit company, the responsible auditor should also be named.

Accounting of deposit refund fee


The Hungarian Accounting Act (C/ 2000) has been amended with regulations on the new deposit refund fee system to be introduced from 1 January 2024.

The mandatory refund fee of products sold in recyclable package and the voluntarily package refund offered by manufacturers will affect the net sales and the purchase value of the goods sold. The value of the sold deposit refund package must be recorded as an increasing item to the purchase value of costs of goods sold, and the returned deposit refund package will decrease the value of cost of goods sold.

The redemption fee payable to the concession company (MOHU Zrt.) for non-recyclable packages (which is HUF 50 for all types) shall be invoiced to the product manufacturer as other expense, while the connection and service fees  shall be booked as services rendered. 

Deferred tax


In line with other regulations related to the global minimum tax and IFRS accounting policies, deferred tax regulations became part of the Hungarian Accounting Act as an option to be chosen by the companies. 

Deferred tax rules applied by the companies need to be determined in the accounting policy.

Newsletter
​​​« Back to the newsletter-overview

Contact

Contact Person Picture

Dr. Roland Felkai

Graduate in Economics, M.A. (London), Tax Consultant

CEO and Partner

+36 1 8149 800

Send inquiry
Skip Ribbon Commands
Skip to main content
Deutschland Weltweit Search Menu