With a government decree issued on 4 June 2022, the Hungarian Government levied special taxes to divert the so-called “extra profit” of certain economic operators, and raised the tax rate of some existing special taxes. The special taxes are being levied in 2022 and 2023 for the full tax year, in the following 8 economic sectors: banking, insurance, energy, retail, telecommunications, airlines, medicine distributors and, from 2023, advertising. The decree also modifies, among others, the rules of the company car tax, the product tax in relation to the promotion of public health, the retail tax, the excise tax, the financial transaction tax and the taxation of the simplified employment scheme. Most of the new tax rules will become effective on 1 July 2022. The advertisement tax is not part of the current package, but it is planned to be reactivated on 1 January 2023.
Changes affecting the banking sector
“Extra profit”-tax
The “extra profit”-tax of banks is payable by financial institutions in the tax years 2022 and 2023 via self-assessment. The tax base is the net turnover determined in the previous tax year’s financial statements, as defined by Act C of 1990 on local taxes.
Rules in 2022:
the tax rate is 10%
tax liabilities due in 2022 shall be assessed and reported until 10 October 2022, and they are payable in two equal instalments until 10 October and 10 December 2022.
Rules in 2023:
The tax rate is 8%
Tax liabilities due in 2023 shall be assessed and reported until 10 June 2023, and they are payable in three equal instalments until 10 June, 10 October, and 10 December 2023.
Financial institutions that cease to exist mid-year or become excluded from the scope of the special tax shall pay the extra profit tax within 30 days following their termination, or change of status.
Financial transaction tax
The scope of the transaction tax will also cover the acquisition of financial instruments that received an ISIN identification code from KELER, including acquisitions for clients’ accounts or the financial institution’s own account. The tax base is the amount of the instrument credited on the account; instruments denominated in a foreign currency shall be translated in HUF with the exchange rate of the National Bank of Hungary as at the date of performance. The tax rate is 0.3%, but maximum HUF 10,000 per transaction. The tax shall be assessed, reported and paid by the financial institution until the 20th of the month following the date of the transaction. The first tax payment on such transactions is due on 20 September 2022.
Another important amendment is that the scope of the financial transaction tax is extended to entities providing cross-border payment services and the cross-border provision of loans and credit facilities. Service providers that are engaged in such cross-border services in Hungary are obliged to register at the Hungarian Tax Authority until 1 September 2022.
Retail special tax
Rules in 2022:
In the tax year that includes 1 July 2022, taxable persons covered by Act XLV of 2020 on the Retail Tax are obliged to pay an additional one-off special tax, which amounts to 80% of the retail tax liability of 2021. The special tax should be assessed, reported and paid until 30 November 2022.
Rules in 2023:
As of 2023, new retail tax rates are introduced as follows:
on the retail tax base not exceeding HUF 500 million: 0%;
on the tax base above HUF 500 million, but not exceeding HUF 30 billion: 0.15%;
on the tax base above HUF 30 billion but not exceeding HUF 100 billion: 1%;
on the tax base above HUF 100 billion: 4.1%.
Company car tax
The company car tax is nearly doubled for the period between 1 July and 31 December 2022. The monthly rate of the company car tax per vehicle is determined based on its performance expressed in kilowatt and its environmental class code, as follows:
| A | B | C | D |
1 | Performance (kW) | „0”–„4” environmental class code (HUF) | „6”–„10” environmental class code (HUF) | „5”; „14–15” environmental class code (HUF) |
2 | 0-50 | 30,500 | 16,000 | 14,000 |
3 | 51-90 | 41,000 | 20,000 | 16,000 |
4 | 91-120 | 61,000 | 41,000 | 20,000 |
5 | 120+ | 81,000 | 61,000 | 41,000 |
Simplified employment
The tax payable by the employer with respect to individuals employed via simplified employment is increased as follows:
as regards seasonal work in agriculture and tourism, 0.5% of the monthly minimum wage for each day of the employment (i.e. currently HUF 1,000 per day per employee);
with respect to casual labour, 1% the monthly minimum wage (i.e. currently HUF 2,000 per day);
with respect to background actors in the film industry, 3% of the monthly minimum wage (i.e. HUF 6,000 per day)
The increased tax is first payable on simplified employment relationships created in July 2022. The pension calculation base with respect to simplified employment will also be increased simultaneously.