Global minimum tax
The minimum tax, developed by the OECD and adopted into EU law, aims to ensure that the effective tax burden of corporate groups with revenues above 750 million euros is evenly distributed among group members, and that the effective tax rate reaches 15 percent in each country. With the introduction of the global minimum tax, the affected corporate groups will face exceptionally complex legal interpretation and administrative challenges.
Year-end data reporting deadline for those subject to global minimum tax
The autumn tax package specifies the details of the data reporting requirements, while the Tax Authority has published the GLOBE form, which is to be used to fulfill the reporting obligations. The reported data contains the identification details and classifications of the group members as well as the details concerning the corporate group.
The contents of the GLOBE reporting form – what the companies have to declare
The GLOBE form, similarly to other tax returns, contains a main sheet and also the so called “M” sheets concerning domestic group members.
The main sheet of the global minimum tax report contains the name and tax identification number and their declaration about their classification, meaning if they are filing the return as a group member or as a parent company. The type of supplementary tax (top-up tax) to be paid (QDMTT, IIR, UTPR, or none of the previous) must be indicated on the main sheet by the group member submitting the form for FY2024. The number of domestic group members is also to be indicated. If the taxpayer submitting the form qualifies as a group member, the information on the parent company (name, tax identification number and type of supplementary tax liability status) must also be provided.
On the “M” sheets the name and tax identification number of domestic group members need to be indicated besides the type of supplementary top-up tax to be paid in Hungary by the given group member.
The expert analysis of various information related to the global minimum tax is necessary in order to be able to fill in the data report with the correct content.
I have a global minimum tax related question
Given the recent introduction of the global minimum tax regulations and the lack of sufficient practical experience, it is recommended consulting with a tax advisor, especially for analyzing revenue data of the consolidated financial statement, information regarding foreign subsidiaries and the parent company’s status from the perspective of the global minimum tax. Proper completion of the declaration can only be ensured through conducting the necessary background reviews.
Penalty for missing the reporting deadline
Due to the fast-approaching year-end reporting deadline, it is advisable to ascertain, whether the given company falls under the scope of the global minimum tax as soon as possible.
If so, then relevant information of the other members of the corporate group should also be collected. In the case of missing the deadline the Tax Authority may levy a penalty up to 5 million forints (HUF).
Global minimum tax – the most important deadlines
Successfully submitting the data report by the deadline, which December 31 2024 for taxpayers with a tax year following the calendar year, is only the first step for taxpayers falling under the scope of global minimum tax in Hungary. In 2025, in addition to preparing the necessary calculations, taxpayers will also need to declare and pay the advance of the global minimum tax, while in 2026, the final declaration for FY2024 must be submitted.
To avoid high penalties, it is recommended involving a tax advisor for performing the complex tasks related to the above-mentioned Hungarian global minimum tax tasks.
