The above summary is provided for information purposes only. We recommend that you consult our experts before making any decision based on this information.
2024. December 17.
Contents
- Personal income tax
- Value added tax
- Advertising tax
- Corporate tax
- Excise duty
- Retail sales tax
- Global Minimum Tax and Corporate Tax Information (CbC) Report
- Vehicle tax and company car tax
- Accounting thresholds
- Financial transaction duty
- Local taxes
- Environmental Protection Product Charges and extended producer responsibility fee
Dear Client! Dear Reader!
On November 26, 2024, the Parliament has accepted the tax changes for next year, which are summarized below.
1. Personal income tax
Family Allowance increase in two steps
The family tax credit for dependants will increase by one and a half times from 1 July 2025 and double from 1 January 2026. The rate of tax relief per dependent person per month will be as follows:
Apport of intellectual property is tax exempt
The contribution made by an individual – who creates an intellectual property – to the establishment of a business company will be tax exempt on the value of the contribution, as set out in the articles of association.
Accommodation allowances as a non-wage benefit with a 28% payer tax rate
From next year, employers may grant an allowance of HUF 1 800 000 per year as a non-wage benefit to employees under 35 years of age, provided they have been employed for the whole year:
- under tenancy agreement or
- housing loan contract.
Extending the scope of the SZÉP Card
In the future, 50% of the amount transferred to employees’ SZÉP Cards will also be available for housing renovation. This amount will be calculated based on the balance on the SZÉP card on 1 January 2025 and the employer’s allowance transferred to it until it is used.
A maximum of HUF 120,000 per year transferred to the new SZÉP card sub-account called Active Hungarians can be used to promote active lifestyles and sports activities, as defined in a separate government decree.
Together with the two sub-accounts of the SZÉP card, the annual limit will thus increase from HUF 450,000 to HUF 570,000, for which the employer will be subject to a 28% tax on non-wage benefits. The employer’s contribution tax rate will remain unchanged at 33.04% for benefits exceeding the annual limit.
New tax-free benefits for individuals
In addition to admission tickets, season tickets for sporting events, cultural services and library fees, next year zoo admission tickets will also be tax-free up to the monthly minimum wage.
The amount of damages awarded by a court in a lawsuit and tips paid by a guest to a waiter not only in cash but also by card or bank transfer will be tax-free in 2025, if the catering business’s records show that the tip is due to the employee who served the guest.
Next year, employers will be able to contribute tax-free to the repayment of an employee’s student loan.
Short term rentals (Airbnb) in Budapest
Individuals who opt for the flat-rate tax on room and board will have to pay an annual tax of HUF 150,000 per room next year, instead of the current HUF 38,400 per room, if the property is in the capital.
2. Value added tax
The supply of natural gas between taxable dealer-traders is subject to reverse charge, making the taxable dealer who purchases the natural gas the person liable to pay the tax on these transactions.
Sales of new residential immovable property
Until the end of 2026, new residential property will continue to be sold at a reduced VAT rate of 5%.
The introduction of the e-credit has been postponed until 1 July 2025.
EU tax exemption as a new option for small businesses
As a further step towards EU tax harmonisation, from 2025 it will be possible to opt for a so-called cross-border exemption for all EU Member States if the annual EU-wide income does not exceed €100,000 (known as the SME system, cross-border exemption).
Under this scheme, a taxable person established in a Member State may notify the tax authority in which he is resident of the Member State(s) in which he wishes to apply the exemption, provided that the income threshold in that Member State(s) is not exceeded in the previous year or in the current year. The national thresholds can be found at the following link:
https://sme-vat-rules.ec.europa.eu/index_en
The registering tax authority assigns a suffix EX to the taxpayer’s tax identification number, so no tax return is required in the Member States concerned, but the registering tax authority must be provided with quarterly data on
- domestic income made in a Member State during the calendar quarter, and
- for the turnover of other Member States of the Community during the calendar quarter, broken down by Member State
3. Advertising tax
The suspension of the obligation to pay advertising tax has been extended, so that the tax rate will be 0% of the taxable amount until 31 December 2025.
4. Corporate tax
Under the amendment, the book value of grants, allowances, permanently transferred funds and assets transferred without reimbursement to a professional sports organisation in the field of spectator team sports, up to a maximum of 1 per cent of the grantor’s turnover for the tax year, are considered as recognised expenses for the purpose of the business activity.
5. Excise duty
For excise goods, the rates are revalorised each year by applying the consumer price index for the previous tax year in July.
6. Retail sales tax
Retail tax is payable by the platform operator on goods sold through a platform (online marketplace). Not only the domestic but also the foreign platform operator is considered liable for the tax in respect of domestic retail activity. The platform operator must declare its activity within 15 days of becoming a taxable person.
A taxable person selling through a platform may deduct the amount of domestic sales made through the platform from his taxable amount. However, if the platform operator fails to comply with its tax obligations and the tax debt cannot be recovered from it, the tax authority will require the retailer selling through the platform to pay the tax due.
7. Global Minimum Tax and Corporate Tax Information (CbC) Report
The change in the legislation imposes an obligation to declare and pay tax advances in respect of the domestic additional tax, which Hungarian group members must pay no later than the 20th day of the 11th month following the tax year concerned (for the first time by 20 November 2025 for normal financial years).
Taxpayers subject to the Global Minimum Tax Act with a fiscal year ending in the same calendar year must file the notification form to the tax authorities by 31 December 2024.
The filing form to be submitted by the end of the financial year includes
- the identification details of the group members and their classification,
- the multinational group,
- the number of domestic group members
- the name and tax number of the notifying group member,
- the notifying party’s declaration of its classification, i.e. whether it is making the notification as a group member or as the ultimate parent company
- the type of additional tax the group member will pay (QDMTT, IIR, UTPR, or none if not already known)
Currently, the GLOBE filing form is available on the tax authority’s website with instructions in English and Hungarian.
The same group of taxpayers must also file a CbC (Corporate Tax Information) report for 2024 on form 24T201T by 31 December 2024.
The CbCR filing must include the following information:
- the name of the multinational group
- the fiscal year of the group,
- the affiliate making the CbCR,
- and its tax residence
8. Vehicle tax and company car tax
An inflation-linked valorisation rule will apply from 2025 for vehicle tax and from 2026 for company car tax.
The monthly rate of company car tax in 2025 is as follows (20% increase):
9. Accounting thresholds
The current net turnover threshold will be doubled to HUF 600 million, while the 50 employees requirement will remain unchanged. In addition, the thresholds for the preparation of simplified annual accounts will also change: the threshold for the balance sheet total will increase from HUF 1.2 billion to HUF 2 billion and the threshold for annual turnover will increase from HUF 2.4 billion to HUF 4 billion.
As regards the thresholds for the preparation of consolidated annual accounts, the current threshold of HUF 6 billion for the balance sheet total will be increased to HUF 10 billion and the threshold of HUF 12 billion for the annual net turnover will be increased to HUF 20 billion. The number of 250 employees will remain unchanged.
10. Financial transaction duty
The rules on the financial transaction duty are summarised in a separate article.
11. Local taxes
An exemption from building tax is introduced for buildings qualified as a local monument or a national monument. These buildings are exempt from tax in the year of acquisition and for three years thereafter.
12. Environmental Protection Product Charges and extended producer responsibility fee
The change in legislation will remove the administrative obligation (including the obligation to declare and register) for the environmental protection product charges for packaging/packaging products, electrical and electronic equipment, tyres, batteries, promotional paper and office paper from 2025. This means that the product charge will not be completely abolished, but its applicability will be reduced to products not subject to the EPR.
13. Tax procedure, default penalty increased in 2024
Under the amendment, in addition to the existing control and support procedures, the tax authority may also initiate a new type of procedure, known as a data reconciliation procedure. This will serve to clarify possible data discrepancies quickly and efficiently and will be launched when the data provided by the taxpayer and the data provided by the tax authority do not overlap.
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We hope that our newsletter will help you to understand and apply the revised tax rules. Please do not hesitate to contact us if you have any questions.
Best regards:
ABT Treuhand Group