In the life of companies – especially if their business year is identical with the calendar year – this period is typically spent focused around the closing of the previous financial year, which includes the calculation of annual taxes. Although the deadline for filing the corporate income tax return is still a long way off, as the tax calculation is part of the annual report, it also comes up during the audit. However, in the big rush, it is often forgotten that the calculation of the corporate income tax can be more than a compulsory administrative task, i.e. merely the calculation of the tax due.
Although the 9% tax rate in force in Hungary is relatively low in international comparison, the amount of the corporate income tax due can be significantly reduced if the Company is aware of and uses the various options available for the reduction of its tax base, rather than simply puts together its tax returns on the basis of the previous year’s routine. A carefully prepared tax calculation also addresses potential tax risks that may emerge, while an incorrect return can lead to significant additional expenses in the long term, when in fact every forint counts in the current pandemic period. Not to mention the significant additional tax burden that many companies pay – in some cases unnecessarily – due to the rules of the expected tax, whereas their tax due could be significantly lower according to their actual tax base.
To read the whole newsletter below.
Want to know more?
Szmicsek Sándor Partner, Head of Tax and Legal Services - Budapest