The new bill on the amendment of certain tax laws submitted by the Hungarian Minister of National Economy on 2 May 2017 targets to increase the competitiveness of the economy and the simplification of the taxation and tax administration.
According to the bill, the taxation related to practice rights will become more favorable, and the healthcare contribution concerning the lease activity will be annulled. There are developments in the corporate income tax as well, as the threshold of 10% relating to the reported participation exemption will be annulled, accordingly, any participation percentage could be reported to the tax authority in order to benefit from the Hungarian participation exemption regime. Another change is that the start-ups will not have to employ research and development personnel. The VAT rate of internet access is planned to be decreased from 18% to 5%, and the VAT of fish would be reduced from 27% to 5%.
The planned tax package also contains provisions in connection with the bank accounts. If sole entrepreneurs choose personal tax exemption, they will be obliged to open a bank account. In addition, resident companies having a foreign bank account have to notify the tax authority about such account. Good news to real estate investors that the bill plans to modify the Act CII of 2011 on the regulated real estate investment companies, aiming to facilitate the establishment of those companies.
By Eszter Kamocsay-Berta, Partner, KCG Partners Law Firm