[vc_row][vc_column][vc_column_text]Dear Clients! Dear Readers!

In our Newsletter the amendments valid in 2018 are summarized.

1. Personal income tax, contributions

• In case of two children the monthly rate of tax benefit per child will rise from HUF 15,000 last year to HUF 17,500.
• According to the tax-free allowance introduced last year the employer pays compensation to the employee during 5 years for the apartment rent (so-called ‘housing support for mobility’) so the value thresholds will increase.
• The student loan repayments taken over by the employer from the employee under a contract of employment have been tax-free since 11 November 2017 up to 20 % of the monthly minimum wage but no more than up to the mandatory instalments about which the Student Loan Centre private limited company shall notify the employee every year.

Reimbursements related to using one’s own vehicle

• As of 2018 HUF 15/km tax-free allowance may be accounted for the costs of operation of vehicles owned or leased not only by the owner or their spouse but also their close relatives who use them for official or business purposes. According to the new rules the right of ownership must be verified with the vehicle register, and in case of a closed-end leasing it must be certified with the contract or invoice.

Contribution reduction

• In 2018 the social contribution tax rate decreased to 19.5 % from 22 % last year. In this regard the health care contribution (EHO) will also decrease to 19.5 % from 22 %.
• As of 1 January 2018 the 14% health care contribution is no longer payable in case of earnings from real estate leasing exceeding one million HUF.
• As a consequence of the contribution reduction the personal income tax base will be 84 % of the income laid down for 2018 provided the private individual is obliged to pay 19.5 % social contribution or 19.5% health care contribution (for instance the supportive donation credited by the voluntary fund to the private individual member).

The information of 2018 about certain, favourably taxed fringe benefits and cafeteria type benefits can be read in a separate Newsletter.

2. Value Added Tax

• The leading theme of 2018 will probably be the real-time data reporting on the invoices containing HUF 100,000 VAT to be paid from 1 July. In the Online Invoice system operated by the tax authority (previously called KOBAK) the data files can now be tested, and the developers may consult the IT specialists of the tax authority both in Hungarian and in English.
• VAT on fish, pork offal and offal, internet service and restaurant service is reduced to 5 %. However, as of 2018 a new tax, the 4 % of tourism developing contribution also lies with the latter.
• Not only the qualified but also the reliable taxpayers performing less stringent conditions will be exempt from the provision of tax guarantee related to fiscal warehouse. (The status of the client continues to be queried from the system of the tax authority.)
• Due to the change in Art. a number of procedural standards are shifted into the Act on VAT (for instance: with respect to the tax warehouse, the indirect customs representative, the selection and declaration of special legal statuses, and the recapitulative statement.)

3. Corporate tax

• The rate of corporate tax is still 9 %.
• Large enterprises may claim tax advantage in the Central Hungarian Region after their big investments resulting in product diversification or new process innovation. The minimum investment is HUF 3 billion for job creation or HUF 6 billion for fixed assets acquisition.
• A new tax base decreasing item is the cost of a filling station suitable for charging electric vehicles or changing their energy storing device (with a special cap on returns).
• The favourable provisions applied for the declared shares may also be used for shares less than 10 %.
• As of 2018 volleyball is also regarded as a spectacular -team sport.
• It is still possible to offer the corporate income tax. In contrast to the previous rules the tax authority (NAV) upon special request performs crediting retrospectively even if the advance tax or tax was paid with max. 15-day delay.
• Because of the new Art. some distinct rules relating to the financial year, provisions for foreign construction sites and rules on members of companies owning a real estate have been included in the Act on Corporate Tax.

4. Other taxes

Local taxes

• The competent local authority will automatically be informed about the headquarters and business sites registered with the Company Court, which means that it will not be necessary to register separately for the business tax and tourism tax.
• The business tax return can be submitted through the central ÁNYK internet surface, and sending the tax return may also take place by means of authorization, and it will be forwarded by the tax authority to the competent local authority.
• The law specifies the solar power station as a business site.

Charges

• When using the tax-base allowance applicable to the difference of the value of bought and sold flats the value of the flat sold maximum 3 years ago may also be taken into consideration instead of the former maximum 1 year. The same deadline applies if the private individual wants to use the tax exemption for buying a lower value flat regarding a high value flat which was sold before.
• The family home building allowance (CSOK) is deductible from the market value of the flat when the tax base is determined.

Small Business Taxation

• Law firms may also be subject to the KATA tax regime.
• KIVA tax rate will decrease to 13 % from 14 %, and the rules for carrying forward losses will become more favourable.

Concerning the interpretation of the above detailed rules our staff is happy to help.

Best regards:

ABT Treuhand Group[/vc_column_text][/vc_column][/vc_row]