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New Taxes to Improve the Balance of Public Finances

New Taxes to Improve the Balance of Public Finances

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The Hungarian Government introduced two special taxes from 1 May 2020 in order to tackle the financial effects of the coronavirus disease: the special tax on credit institutions and the tax on commercial chains. According to the official communication of the Ministry of Finance „the goal is that the burden of these taxes – that contribute to the improvement of the balance of public finances – are borne not by the consumers but by the actors that are capable of such.”

The tax on credit institutions is only payable in the tax year of 2020 in three instalments. The tax has to be paid after the corrected balance sheet total that exceeds HUF 50 billion, at a rate of 0.19%. The payable tax can be reduced by supporting popular team sports. According to the official communication of the Ministry of Finance, this special tax will be deductible from the already existing tax that has to be paid by financial institutions. Further details of this tax have not yet been elaborated in the laws.

The tax on commercial chains must also be paid from 1 May 2020 until the end of the state of emergency special legal order. The tax base is the net turnover of the taxpayer and the tax rate is specified progressively, provided that the net turnover reaches HUF 500 million on a yearly basis. This special contribution targets not only Hungarian but also international commercial chains (available in Hungary), such as Amazon, Wish or Aliexpress. According to the official statements this special tax will be a permanent tax also after the end of the state of emergency.

By Eszter Kamocsay-Berta, Managing partner, KCG Partners Law Firm

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
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  • We are driven by our vision to shape and lead the Hungarian legal market and become a first choice law firm in our practice areas.

Firm's website: http://www.kcgpartners.com