Tax changes in Hungary 2015

[cml_media_alt id='1135']Adótörvény változások 2015[/cml_media_alt]

Tax changes 2015 in Hungary

On 18 November the Parliament has passed the bill on tax law changes for 2015 in Hungary.

Let’s see what important changes shall we expect.

Cafeteria

The tax changes in cafeteria regulations affect most of the people. The originally planned amendments were significantly cut back. The benefits will be taxed unchanged, still by 35.7 percent burden. Between 200 and 450 thousand Forints there will come a strong restriction, and only amounts paid on SZÉP-card will tax by 35.7 percent, after all other benefits the tax will be 51.17 percent. And beyond 450 thousand Forints all cafeteria payments will uniformly bear 51.17 percent tax.

Profit minimum in corporate taxation

The corporate tax based on income(profit)-minimum will increase. The current rules allow to decrease the total income by the cost of goods sold and the cost of services purchased. To the contrary the new regulations will not accept this latter one.

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Tax loss in corporate tax

Tax loss carry forward will also change: the loss of 2014 can be carried forward up till 2020, but the losses generated after 2015 can only be utilized for 5 years only. The unlimited lentgh of carry forward will be cancelled in case of sole propriators as well. Restrictions will come into force in case of mergers, demergers and other business transformations, the losses taken over can only be utilized in each tax year in the proportion of the income from the activities carried on compared to the income of that activity in the previous three years.

VAT

The act amends those regulations about the periodically settled transactions’ performance date which have already been intiated during the year, but finally haven’t put into effect. Currently those product sales or service provisions where the parties agreed on paying in instalments or on periodic settlement the date of performance must be the same as the date of payment term. The passed bill changes this, and the general rule will be to set the date of performance the end of the settled period or the payment period. Exepted transactions will be those when the payment term and the issue date of the invoice will be earlier than the end of the settled period or peyment period. It these cases the date of performance will be the date of issuing the invoice.

VAT frequency

VAT return submission frequency is also changing. Newly established companies instead of current quarterly returns will have to submit monthly tax returns from next year until the end of the year following its founding.
Quarterly tax payment will be needed if the annual payable tax in the second year previuos to the current year reaches 250 thousand forints and the annual product sales and service provision consideration without VAT exceeds 50 million Forints.

Itemized aggregate domestic tax report

The tax changes include a lower threshold for the domestic itemized tax report of 1 million Forints instead of the current 2 millio Forints. Those invoices where the amount of VAT reaches or exceeds 1 million Forints must be reported item-by-item.

Related parties

The range of related parties will be extended. Now on companies will qualify as related parties where the sameness of the management will cause influence. Therefore not only the shareholders but the management will have to be examined.

Free hands to municipalities

Local municipalities will be allowed to levy tax on nearly any taxable asset if this is not forbidden by another law, and the taxable asset is but subject of public burden regulated in law. The subject may not be organisation or business entity.

And some others

  • Allowance for parents with two children will be increased by 2500 Forints in each year from 2016 to 2019 (from 10 to 20 thousand Forints)
  • First marriage allowance: five thousand Forint per month up to 2 years or until getting eligible for family allowance (conception of the first baby). Eligible if at least one of the parties makes its first marriage.
  • Travel order can be made out and stored electronically.
  • Social security contribution of unsecured persons will increase to 6390 Forints per month (by 1.7 percent) covering the health care service.
  • Food-store chain administration fee will be levied on businesses operating daily product selling stores, that can reach even up to 6 percent.
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