All Blog Articles
resources-post-top-bg Hungary: Government Submits Tax Bill

Hungary: Government Submits Tax Bill

20th November 2019: Hungary’s Ministry of Finance announced that it has submitted to parliament the seventh and final part of its Economic Action Plan,

On November 12th, Hungary’s Ministry of Finance announced that it has submitted the seventh and final part of its Economic Action Plan, which includes various tax measures to parliament.

The newly tabled Hungary tax bill contains proposals to merge four existing social contributions into a single levy of 18.5 % from 2020.

These include:

  • the pension contribution,
  • healthcare contribution,
  • and unemployment contribution.

__________

Subscribe and to receive updates from our blog to your inbox

__________

The bill also includes measures to improve rates of value-added tax compliance. Under these changes, most invoices will have to be submitted online. At present, only invoices for amounts of at least HUF100,000 (USD330) are submitted using Hungary’s real-time invoice reporting system, which came into force on July 1st 2018.

Furthermore, the bill will require suppliers of most VAT-exempt services, such as private healthcare, education, and real estate sales, to issue an invoice or receipt.

The Hungarian parliament has already approved other tax aspects of the Economic Action Plan. Among others, these changes include:

  • A reduction in the small enterprise tax (KIVA) from 13% to 12% effective from January 1, 2020.
  • A reduction in the VAT rate on supplies of hotel and accommodation from 18% to 5%.
  • The abolition of advanced corporate tax payments, which applies to firms with an annual turnover in excess of HUF100m. This means that the affected businesses must settle their tax payments with their tax returns by May 20th each year, instead of on December 20 in the previous year.
  • The gradual reduction in the project value threshold for the development tax discount from the existing level of HUF500m to HUF50m for small business and to HUF100m for medium-sized firms by 2023.

__________

If you’re looking for more information on Hungary and possible VAT compliance information, you can visit our website, or get in touch with our team directly below.

GET IN TOUCH

 

See more Taxback International Articles

Hungary: Real Time Invoice Reporting

14th August 2018: From 1st July 2018, the Hungarian Tax Authority introduced a real-time invoice reporting obligation.

2019 has already brought many changes in the indirect tax world.

19th June 2019: What are the most important VAT updates from the first half of 2019?

How strange can VAT really be?

6th July 2017: VAT can be strange, complicated and weird.