Rules on Personal Income Tax in Hungary Simplified, More Tax Changes Approved by Lawmakers
- 22 Nov 2023 6:40 AM
- Hungary Matters
Lawmakers approved a package of tax changes submitted by the government on Tuesday. The law passed with 116 votes in support, 47 against and 7 abstentions.
The legislation simplifies rules on personal income tax and contributions while streamlining taxation of sole proprietors, ending their treatment as “quasi companies”.
The legislation exempts communications networks from the utilities tax from the start of 2024 and rolls back the tax from the beginning of 2025. It extends the suspension of the advertising tax for another year.
The legislation paves the way for the broad adoption of electronic receipts and contains modifications necessary due to the termination of the double taxation avoidance treaty between the United States and Hungary.
The legislation exempts lottery-like gambling prizes from personal income tax in an effort to encourage public participation in such games. Imports of certain art works from outside the European Union will be affected by preferential 5% VAT and bottled wine with protected origin offered as business presents will be exempt from tax.
Meanwhile, lawmakers also voted to transpose a European Union directive on the global minimum corporate tax rate into national legislation. The MPs cleared legislation on the adoption of the global minimum tax with a vote of 152 for, 6 against and 12 abstentions.
The rules apply to companies with annual turnover of more than 750 million euros recorded in at least two of the previous four years.
Finance Minister Mihály Varga said during the general debate of the proposal that extra tax will have to be collected if the total tax paid by a company does not reach 15% of profits. Tax allowances will be introduced for new research and development projects starting from next year.
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