Hungary: Smaller but pragmatic changes show signs of consolidated legislation. A new era of legislation in Hungary?
Smaller but pragmatic changes show signs of consolidated legislation. A new era of legislation in Hungary?
- Reverse charge already applied to certain cereals has been prolonged for 5 years and extends to real estate construction and assembly work requiring notification of the building authority.
- VAT rate on pigs and half pigs is down from 27% to 5% and extension of the reduced rate to other foods is expected.
- For exports, the deadline on shipping from the EU and thus application of VAT exemption is prolonged to 360 days from the often too short 90 days.
Corporate income tax
- Among related parties, R&D costs of a party can be used as a tax base decreasing item by any other party in the group. Primarily affected are groups that outsource their R&D activity to a related party.
- Tax relief of movie and performing arts sponsorship only applies if an additional newly introduced sponsorship is paid. Fortunately, the tax relief can be used within 6 years instead of the original 3 years.
- Trade, export and import of lubricant oil and condensed hydrocarbon in quantities over 5 kilograms and sold in bottles requires an excise license. Lubricant oil and hydrocarbon already bought cannot be sold until a license is obtained.
- Tax amounts transferred to wrong accounts of the tax authority are to be considered as settled. This is a major deviation from the previous practice when tax amounts were only paid if transferred to the right accounts.
- Fees for advance tax rulings are increased, deadlines are prolonged and a ruling on tax consequences can only be requested for a single taxable person in one application form. In addition, the previously informal preliminary consultation is regulated and a fee is payable.
Online cash registers
- Cash registers introduced with an online connection to the tax authority enable electronic data retrieval and reduce abuses, so the tax authority expects.
Stability savings account
- These new accounts can be opened through banks on payment of at least 5 million forints, from which exclusively forint-denominated government bonds can be bought. The owner of the account enjoys complete anonymity and after 5 years the income from the investment can be taken income tax-exempt.
Source: Act No. CC. of 2013