Most important mid-year tax changes in Hungary

News, Tax Planning

The Hungarian Gazette of 14 July 2023 contains the provisions of the bill submitted on 6 June, which have now been incorporated into law. In the Act on the Contribution of Airlines and on the Amendment of Certain Tax Laws, we can observe changes affecting almost all tax types, several of which will significantly affect the legal environment of trusts (e.g., revaluation). Even the extra profit taxes, which are considered temporary, will certainly stay with us for a while. We have summarised the major changes below.
Contribution from the airlines

The contribution, known as one of the extra profit taxes, will be raised to the level of a green tax. As a reminder, the activity of air passenger transport under the Air Transport Act (hereinafter referred to as the “Lt.”) is subject to a contribution. The entity subject to the contribution is the ground handling entity within the meaning of the Lt. which carries out the passenger and baggage handling activity. The contribution shall be based on the number of domestic passengers, excluding transit passengers, of the aircraft operated by the ground handling undertaking.

Regulations relating to the tax liability of the assets managed under a fiduciary relationship

In the future, the Personal Income Tax Act will treat the transfer of assets as a sale. This means that the settlor will have to pay tax on the difference between the contract value of the assets placed in trust and the amount spent on its acquisition.

If the value agreed at the time of the transfer of the property is not higher than the amount spent to acquire it, the transfer of the property will not be taxable.

The individual settlor will not be obliged to pay the tax due on the transfer in a single payment but may choose to declare and pay the tax liability arising from the transfer over a period of 3 years.

The trustee must issue a certificate of the value of the assets received within 30 days of receipt of the property and must not only deliver it to the settlor but also declare it to the tax authorities.

No personal income tax is payable on a transfer of assets which is made on the death of the settlor.

Personal income tax is not payable even if the beneficiary can only acquire ownership of the property after the settlor’s death. However, if a beneficiary would have acquired the assets earlier, he or she will have to pay personal income tax plus a 20% penalty if the tax can no longer be recovered from the settlor.

Vehicle tax

In future, vehicle tax must be paid in one payment by 15 April. Upon application by the taxpayer (natural person) by 30 June of the year in question, the NAV will authorise one instalment payment per year, up to a maximum of five months, without surcharge. The amendment will come into force on 1 January 2024.

Upon application by a legal entity taxpayer, the tax authority will allow one payment in instalments of up to six months per year for tax debts of up to HUF 1 million registered by the taxpayer.


Amendment of the regulations to the report containing corporate tax information to ensure that the published data can be consulted continuously for at least five consecutive years. This provision will apply for the first time to accounts for a fiscal year starting on or after 22 June 2024.

In the case of a cross-border transformation, the general provisions shall be applied taking into account the provisions of the Act on cross-border transformation, mergers, divisions, and other legislative amendments of capital companies for the purpose of harmonisation. This will be mandatory for the first time in the fiscal year starting in 2024.

Financial transaction tax

The same rules will continue to apply. As a reminder, the transaction tax is based on the value (purchase price) of the financial instrument credited to the customer account (securities account). The transaction tax is 0.3 percent of the base amount of the tax, but not more than HUF 10,000 per purchase.

Changes affecting the Act on the Rules of Taxation and the Act on Tax Administration

Conditional tax assessment will also be applicable in the case of a type contract, with a procedural fee of HUF 10 million, HUF 8 million in other cases (previously HUF 5 million), and HUF 12 million (previously HUF 8 million) in the case of an application for an emergency procedure.

The type contract applies to transactions between a taxpayer and an indeterminable number of persons or a determinable but not identifiable number of persons. The essence of a conditional tax assessment is that the Minister responsible for tax policy determines the taxpayer’s tax liability or lack thereof in respect of a specific issue relating to the tax liability or lack thereof indicated in the application, on the basis of the detailed facts relating to a future transaction or a transaction that does not qualify as a future transaction or a type contract, as communicated by the taxpayer.

Taxpayers with less than HUF 30,000 in public tax liabilities registered with the NAV or with less than HUF 5,000 in net tax liabilities would not be excluded from the database of taxpayers without public tax liabilities (the so-called KOMA database).

The qualification of reliable taxpayers is also affected by the amendment, as only enforcement requests exceeding HUF 100,000 will be taken into account for qualification purposes, and the criteria to be examined for qualification as a member or former member of a group taxpayer have been changed, so the law does not expect positive tax performance.

A new provision concerning the tax registration procedure is that NAV will revoke a decision refusing to establish a tax number and will establish a tax number also in cases where

  • the executive officer or managing director, member, or shareholder in respect of whom the NAV refused to issue a taxpayer’s tax number (because the tax number of the company belonging to him has been cancelled in the preceding 5 years) provides evidence (excuses himself),
  • that, as an executive officer or managing director, he or she acted as would normally be expected in the circumstances to restore the lawfulness of the cancelled taxpayer.
Corporation tax

The possibility to pay corporate and local business taxes in US dollars or euros is raised to the level of the law. Taxpayers may file their tax returns for the whole tax year by the first day of the month preceding the first day of the tax year, and those who become taxpayers during the year may file their returns at the same time as they register with the NAV.

Value added tax

As from 1 January 2024, if the consideration is paid up to the time of performance, then, irrespective of the method of payment, the amendment requires that an invoice be issued without delay.

Also from 1 January 2024, a new chapter will be added to the VAT Act, as the mandatory redemption system will be introduced next year.

Simplified employment

The daily net earnings of a statistician in the film industry from casual work may not exceed 12 per cent of the minimum wage in force on the first day of the month in question, rounded up to 100 HUF.

The rate of tax payable by the employer for each calendar day of employment per employee is

  • in the case of seasonal agricultural and tourism work, 0.5% of the minimum wage applicable on the first day of the month concerned (currently HUF 1,000 per day),
  • in the case of casual work, 1 % of the minimum wage applicable on the first day of the month concerned (currently HUF 2 000 per day),
  • in the case of simplified employment of statisticians in the film industry for casual work, 3% of the minimum wage (currently HUF 6 000 per day).

The amendments will enter into force on 1 August 2023.

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