Summary 36 posts
Government Decree 317/2023 (17 July 2023) was published in the Official Journal of Hungary on 17 July 2023, amending the effective Government Decree on extra-profit taxes in several points. One significant change is that pharmaceutical companies may reduce their special tax liability for the tax year 2024 by the cost of R&D activity (investment) aimed at the purchase or production of tangible assets.
Read moreMany companies only realise the importance of verifying their business partners and the existence of related documentation during a tax authority audit, when they are required to present their contracting procedure and, for certain business partners selected by the tax authority, their due diligence documentation. However, the outcome of the tax audit is often a tax authority report and decision in which the tax authority - citing certain objective circumstances and lack of due diligence - denies the right to deduct VAT included in the invoice received, and imposes a tax penalty, even though performance was duly made. This is because the legal regulations require a preliminary business due diligence procedure to ensure that the content of the invoice is authentic, i.e. that the actual performance is consistent with the invoice.
Read moreThe eVAT M2M system will become an increasingly common solution for VAT filing processes in the future. Although the eVAT M2M system offers many advantages for taxpayers and tax authorities, its implementation also poses challenges for both parties and expert support may be needed. If properly prepared and managed, eVAT communication will enable companies to meet their tax obligations more efficiently and easily. The Hungarian Tax Authority plans to start the test run in autumn 2023 and to go live in the first half of 2024.
Read moreIn our latest blog post on the specifics of permanent establishments, we have collected what foreign businesses should pay attention to from a tax perspective if they carry out permanent work in Hungary at fixed sites. The existence of a permanent establishment may require the establishment of a branch office or may give rise to VAT and/or corporate income tax liabilities. We will explain in detail what is meant by the so-called permanent establishment risk and what is meant by the concept of a fixed establishment for VAT purposes.
Read moreThe digital age and the rapid expansion of e-commerce have brought about changes in taxation and invoicing as well. In December 2022, the European Commission proposed amendments to the VAT Directive as part of the \"VAT in the Digital Age\" initiative. Changes include significant amendments to invoicing rules, some of which could enter into force in 2024. Later on, e-invoicing would become mandatory for all businesses for transactions within the EU.
Read moreA draft amendment to the transfer pricing decree is now available, detailing the data that will need to be included in the corporate income tax return from 2023 onwards in relation to transfer pricing documentation in Hungary. In addition to the new administrative task, the documentation threshold value is expected to change and the number of transactions to be documented may be reduced.
Read moreAlthough the government\'s efforts had previously pointed towards administrative simplification, new excess profits taxes have been introduced due to external and internal economic factors.
Read moreSimilarly to 2010, the Hungarian Government has once again decided to impose additional taxes on certain profitable industries in order to support a balanced government budget, to maintain the utility cost reduction and to provide funding for the military.
Read moreA number of taxation changes will be introduced from January, including VAT, tax planning, corporate income tax (CIT),personal income tax (PIT),small business tax (KIVA),social contribution tax or local business tax (LBT),so companies will have a lot to think about. Here is an overview of the tax related changes important for companies that will take effect from 2022.
Read moreThe European Court of Justice recently made a decision in another interesting case with Hungarian implications. The ruling relates to a special topic of the VAT Act, that of the VAT reclaim procedures of foreigners. In the justification of the ruling, the court also refers to areas of procedural law that are of interest to Hungarian companies as well.
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