You can read here the latest tax newsletters of the Hungarian office of Mazars. We would like to inform our clients and partners about actual tax news and changes.
The opportunities inherent in group taxation – applications for establishing a CIT group can be submitted until 20 November
Company groups wishing to form corporate income tax (CIT) groups or to terminate their such existing tax groups from 2024 must submit their respective applications to the Tax Authority by 20 November 2023. The deadline is the same in case of requesting to join an existing group. Companies that miss the above deadline will have to wait a full year for this window of opportunity to be open again. However, an application to form a VAT group can be submitted at any time and should also be considered by company groups.
The deadline for submitting refund applications for VAT paid abroad is approaching
Domestic tax subjects entitled to deduct VAT have an opportunity until 30 September 2023 to claim VAT refunds on the basis of invoices in 2022 with respect to purchases made in other member states of the European Union, and in some third countries (outside the European Union). After this peremptory deadline, the right to the refund is forfeited!
New tax to increase budget revenues: the carbon dioxide (CO2) quota tax
Government Decree No. 320/2023 (VII. 17.), which establishes a tax liability for the largest carbon dioxide emitters in Hungary for the 2023 tax year, was published on July 17, 2013. While the new tax will affect only a small number of economic operators, all the greater is the burden placed on these. In addition to the tax, the taxpayers concerned will also have to pay an additional transaction fee to the climate change authority if they trade their carbon credits.
Savings in the crosshairs: the social contribution tax liability is extended
In a surprise move on the last day of May, Government Decree 205/2023 (V. 31.) (hereinafter: “Government Decree”) was promulgated on 31 May, which extends the scope of the social contribution tax obligation effective from 1 July 2023. The change concerns income from interests. You can find the detailed rules in our newsletter below.
The EPR fees have been announced. How will this affect the environmental product charge?
In our previous newsletters we have already reported on the introduction of the extended producer responsibility (“EPR”) system from 1 July, the details of which were announced on 14 March 2023, in Government Decree 80/2023. The rates of the EPR fee, however, were not known until now, when finally a ministerial decree setting out the applicable rates was also published on 2 June.
The windfall tax is to remain in effect
The legislative process also continued on the last day of May, as Government Decree 206/2023 (V. 31.) - among others - was published, based on which we cannot say goodbye to windfall tax at the end of this year just yet. The government decree originally imposed an additional tax burden on taxpayers in the sectors concerned for the tax years of 2022 and 2023, but the newly published decree extends it also to 2024. Below is a brief summary of next year’s rules.
Changes in the rules concerning the reimbursement of commuting expenses
In the first months of the year, an increase was introduced in the compulsory commuting allowance and, at the same time, also in the amount of the tax-free limit. In addition, the introduction of new county and national passes will bring further changes for both employees and employers. In our newsletter we summarise the most important information related to the above.
The deadline of 31 May for the declaration of CIT, local business tax and innovation contribution for 2022 is approaching
The preparation of the annual calculations for corporate tax, local business tax and the innovation contribution is probably under way at most of the companies. However, it is worth remembering that the amount of the taxes can be significantly reduced if the Company is familiar with and takes advantage of the various possibilities for tax base adjustment, rather than just preparing the returns based on the routine of the previous year. A carefully prepared tax calculation also addresses the tax risks that may arise, while incorrect practices can result in significant additional costs in the long term. But what are the most common topics to focus on?
Tax audits in 2023
The audit plan of the Hungarian Tax and Customs Administration (HTCA) for 2023 has been published – in addition to taxpayers and sectors that have received special attention in previous years, the focus will also be on corporate income tax groups, taxpayers operating Employee Stock Ownership Plan (ESOP), as well as private healthcare providers. The HTCA is using increasingly efficient tools to detect anomalies in an ever shorter time.
Extended Producer Responsibility scheme to start from 1 July 2023
As highlighted in a previous newsletter, the so-called Extended Producer Responsibility (EPR) scheme will be introduced as part of the waste management reform, which will make producers financially responsible for the costs of managing the waste arising from their products. The waste management tasks will be carried out by the concession company MOHU MOL Hulladékgazdálkodási Zrt., a subsidiary of MOL Nyrt., and producers will have to conclude a contract and pay a producer responsibility fee to this company. The detailed rules of the EPR scheme were laid down in the Decree 80/2023, published on 14 March 2023.