Hungary: Tax Update 2017

March 15, 2017

Reduced social contribution tax and a new Corporate income tax rate are two of important tax changes in Hungary 2017.

Social contribution tax in Hungary

The rate of social contribution tax will be reduced from currently 27% to 22% with effect from 1 January 2017. The rate will be further reduced to 20% with effect from 1 January 2018.

Corporate income tax

Before 2017, the rate of coporate income tax was 10% up to a HUF 500 million tax base. The tax base above HUF 500 million was taxed at 19%. From 1 January 2017, a flat rate of 9% will be introduced.

New rules of taxation in Hungary 2017

Before 2017, taxpayers had to indicate the Hungarian resident customers’ tax number in the issued invoice provided that the VAT amount of the invoice reached HUF 1,000,000. From 1 January 2017, this limit will be reduced to HUF 100,000.

According to the transitional provisions of law, invoices can be accepted for VAT deduction purposes which were issued in 2016 with a due date in 2017 even if they do not include the customer’s tax number in case of VAT less than HUF 1 million.

From 1 July 2017, the invoicing software of every company which has a Hungarian VAT tax number is required to be suitable for direct online data connection to the Hungarian tax authorities. The aim of this new rule is that the tax authoritiy can have immediate access to information about the issued invoices.

If the taxpayer fulfills the online data service requirements improperly, with delay or fails to do so, from 1 July 2017 for the invoices containing VAT over HUF 100,000, the amount of the default penalty will be calculated by the number of invoices multiplied by HUF 500,000.

 

The aim of this news is to provide general information about tax changes in Hungary for enterprises and investors. In order to clarify what steps shall be taken so that your undertaking properly complies with the above changes, please contact our tax experts in Hungary individually.

TPA offers an overview of the most important tax innovations in the following CEE and SEE countries in which we operate: Austria, Albania, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia.