21/04/2020
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The Hungarian government has decided on the introduction of further tax concessions
“The government has decided on the introduction of further tax concessions that will leave 200 billion forints (EUR 570 million) in the pockets of enterprises and families”, Minister of Finance Mihály Varga announced on Thursday in a video posted to his page.
“In accordance with the agreement concluded with the private sector, from 1 July the rate of social contributions tax will be reduced by a further 2 percentage points from 17.5 percent to 15.5 percent, which will leave some 160 billion forints (EUR 455 million) in the pockets of enterprises during the second half of the year”, the Minister said.
“Some 600 thousand enterprises and organisations will only have to submit their report, submit their tax return and pay their corporation tax and local business tax by 30 September. The extension of the deadline represents both a tax concession and liquidity assistance”, the Minister pointed out, adding that the extension of the reporting deadline does not include stock market companies, banks, insurance companies and investment enterprises.
“Employees are being assisted by the fact that people who have now had to take out unpaid leave will continue to be covered by health insurance. From 1 May, employers will have to pay their monthly healthcare social contribution of 7710 forints instead of them”, Mr. Varga said.
He also highlighted that all enterprises will be able to keep the tax classification that they acquired at the end of last year, meaning that companies who have been classified as dependable with relation to taxation will remain in the dependable category and enjoy the related benefits.
“A further concession is that enterprises may request the reduction of any form of tax if they have found themselves in a difficult situation as a result of the coronavirus epidemic. The maximum level of this reduction is 5 million forints (EUR 14,200). Up to a maximum tax debt of 5 million forints, enterprises may also ask for payment in 12 monthly instalments or a six-month, surcharge-free deferment with relation to all tax forms”, Mr. Varga explained.
“Small enterprises will be placed in a better position thanks to the fact that the rate of the small business tax (KIVA) will be reduced from 12 percent to 11 percent from 2021. This tax concession will leave some 10 billion forints (EUR 28.4 million) in the pockets of over 50 thousand enterprises next year”, the Minister of Finance indicated.
“Enterprises working within the field of tourism have been particularly hard hit, and accordingly the government has decided that guests will not have to pay tourist tax until 31 December 2020”, he added.
“The use of the Széchenyi Leisure (SZÉP) Card will also become more favourable, with a reduced tax burden and a higher spending limit. No social contributions tax will have to be paid with relation to money transferred to the card, meaning the tax burden will be reduced from 32.5 percent to 15 percent. The sum that can be given to employees with this favourable tax rate will almost double”, the Minister continued.
“The detailed regulations will soon be published in the Hungarian Bulletin”, Mr. Varga said in closing.
