Due to the extended economic effects of the coronavirus epidemic, the October tax package announced by the Hungarian Government was aimed to stimulate the investing climate. According to the Hungarian ‘economic protection operational body’, there are three different ways to revive the economy (i.e.: tax reduction, simplification of the administration, boosting investments).
The small business tax will become even more advantageous from the next year. After the Government reduced it to 12% (11% from 1 January 2021), it has now been decided to double the revenue threshold HUF 3 billion. One of the tax relief decisions will exempt intermediate sellers from the tourism development contribution, which can also directly help the most affected economic sectors, such as hotels and travel agents.
About 1.5 million public administration cases will become free of charge, and from the second half of 2021, the tax authority will prepare the VAT returns for each company. Moreover, from 2021, all first-instance administrative procedures will be exempted from stamp duty.
It is an immensely significant amendment, because the administrative costs of businesses related to the main types of taxes alone are about HUF 420 billion.
By Gabriella Galik, Partner, KCG Partners Law Firm