Restrictions or extra-profit tax? The company car tax has almost doubled

On Saturday, June 4, a government decree on the extra-profit tax was published in the Hungarian Gazette, which aims to restore the balance of the budget. We find not just new taxes in the government decree, but existing special tax increases too. We are going to look at these provisions in general terms below.

Regarding the special airline tax:

we can talk about two amounts that are charged to passengers. The amount of the contribution is HUF 3,900 per passenger if the final destination is in the countries listed in the decree (for example Great Britain) and in the European Union, and HUF 9,750 per passenger in countries other than those specified above.

It is important that this special tax is payable on domestic passengers and does not apply to transit passengers.

Banks

must pay a special tax based on net sales revenues, which is 10% in 2022 and 8% in 2023.

Transaction fee

The upper limit of the transaction fee will be HUF 10,000 instead of the previous HUF 6,000. You will still have to pay this tax after the purchase of the securities, which means that the service provider will have to pay the tax after the purchase of the securities by the customers. The transaction fee is based on the value (purchase price) of the financial instrument credited to the customer account (securities account).

Insurers

are also required to pay a special tax of between 2 and 14%, based on net sales revenues, as set out in the government decree. The present provisions do not concern an increase in the existing insurance tax, but a new additional tax.

Telecommunications companies

are required to pay an additional tax based on their net sales revenues, as set out in a government decree, with a maximum rate of 7%.

The producer of petroleum products (which in practice means MOL – Hungarian Oil and Gas Public Limited Company) must pay 25% of the profit from the Russian oil exchange rate as a special tax.

Under the additional provisions, only residential consumers (municipalities, small and medium-sized enterprises are not) will be entitled to the reduced price (in the energy and utilities sector, on the retail end-user side, it means switching to official prices instead of free-priced tariffs), but the details will be published later.

The tax on company cars will be almost doubled from July, as shown in the table.

Accordingly, the rate of company car tax for the period from 1 July 2022 to 31 December 2022 is as follows (with the current ones in brackets):