Tax changes in 2018

Many tax changes are expected in 2018. These mainly aim at reducing the tax burden and combating the black economy.

In 2018 important changes enter into force in Hungarian tax law. We draw your attention to the following:

  • First to mention is that the social contribution tax (szociális hozzájárulási adó) that employers pay on their employees will be cut from 22% to 20% from 1 January 2018.
  • At the same time, from 1 January 2018 the health care contribution (egészségügyi hozzájárulás) is no longer payable on income from leased real estate. At present, a health care contribution of 14% is payable if a private person’s income from leased real estate exceeds 1 million forint (appr. 3 200 euro) in a given year. Many people are likely to be affected due to the upswing in the real estate rental market.
  • Similarly from 1 January 2018, the construction of electric vehicle charging stations is supported since the historical cost of doing so will decrease the corporate tax base.
  • The internet service VAT rate will be cut from 18% to 5% as of 1 January 2018.
  • From 1 January 2018, enterprises must tell the tax office whether they have a bank account abroad. They must also give the bank account number, the name of the bank and details of opening and closing the account. If they fail to do so, the tax office may impose a penalty.
  • A significant change is that from 1 July 2018 taxable persons must provide the tax office with data about their invoices issued by using invoicing software and charging VAT of at least 100 000 Forint (320 euro).
  • Amendment to the EKAER system (Electronic Public Road Trade Control System of the tax office) is likely because the European Commission recently started an official examination of the EKAER system in terms of its compliance with EU regulations this October.

Additional changes are also to be expected in 2018. Among these, a highlight could be the expected new tax procedure code, which at present is still in the form of a bill pending before the Parliament. 

Source: Act nr. LXXVII of 2017 on the amendments to certain acts on taxation and other acts

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