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Global minimum tax: a minimum rate of 15% tax on the profits of multinationals

This January a Hungarian legal regulation has entered into force on the global minimum tax, introducing the new tax type in Hungary, too. The global minimum tax, developed by the OECD and transposed into EU law, aims to ensure that the effective tax burden for groups of companies with a turnover above €750 million is evenly distributed among group members and that the effective tax rate per country reaches 15%. With the introduction of the global minimum tax, the groups concerned will face complex legal interpretation and administrative challenges

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Fiduciary trusts 2024

Fiduciary trusts (“bizalmi vagyonkezelés” in Hungarian) have spread in the past few years. In recent years, trusts offering complex wealth management solutions have become increasingly popular in Hungary as well, with the number of managed asset accounts exceeding one thousand by February 2024. A legislative amendment contributed significantly to the increase in the number of trusts in 2023: the abolition of the tax-free placement of assets by private trustors encouraged many wealthy individuals to set up trusts before autumn 2023.

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Millions in tax advantages through retrospective reporting of previously non-reported participations in Hungary

In 2024, companies will have the opportunity for a tax amnesty by retrospectively reporting participation acquisitions that were not reported to the Hungarian Tax Authority previously. This will allow corporate income taxpayers who previously failed to report their participations obtained in other companies which could have exempted them from paying Corporate Income Tax (CIT) upon sale. The general deadline for the retrospective reporting of participations is 31 May 2024. The biggest beneficiaries of the retrospective reporting could be those companies expecting a significant market value growth of their subsidiary.

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Kinga Csepei
Tax

Financing opportunities for the SME sector in 2024

Ever since the economical downturn of 2020, the SME sector in Hungary has been experiencing difficulties with the procurement of debt financing. In response, the Hungarian Government has expanded upon its supply of state-subsidised loans, while on the other side, some market participants have come up with creative solutions to raising capital for their companies. Some of these solutions may seem unusual to domestic markets, a couple of which we will discuss in this entry

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Transfer pricing data reporting 2023: experience and obligations

This year was a turning point for companies in the field of transfer pricing, as they were required to provide information on the determination of the arm\'s length price in their corporate income tax returns. We have collected the main issues and topics that have caused the most problems for companies when preparing their 2023 transfer pricing data reporting.

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Deposit Return System (DRS) - November 15 is the deadline for compulsory registration!

Hungarian Companies have barely recovered from the first ordeal of Extended Producer Responsibility (EPR) obligations, and now they are confronted with the next challenge affecting waste management, the new mandatory Deposit Return System (DRS). Although the DRS is expected to impact fewer operators, it could pose a much greater challenge than the EPR. The official launch of the mandatory deposit return system is on January 1, 2024, with the obligation for distributors of affected products to register by November 15, 2023.

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Tax consequences of the termination of the US-Hungarian tax treaty

In July 2022, the United States of America announced that it would terminate the 1979 international treaty with Hungary on the avoidance of double taxation. Although the provisions of the US-Hungarian tax treaty will still be applicable for tax purposes until 31 December 2023, the absence of the treaty will have a significant impact on the activities of private individuals and companies after 1 January 2024, measurable in tax forints, and it is worth preparing for this in good time.

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