The most important changes per tax types are the following:
1.Personal income tax, social tax, vocational training contribution
As of 1 January 2022, a new income type will be introduced into the personal income tax rules, namely the ’income from cryptocurrency transactions’, which aims to create a beneficial taxation environment for income related to cryptocurrencies, similar to the taxation of capital gains. Income from cryptocurrency transactions will only become taxable when the cryptocurrency is exchanged to something else of value (so when the owner sells or exchanges it for something other than cryptocurrency). Certain costs can be deducted from the revenues from cryptocurrency transactions. Revenues are to be calculated based on the market price at the time of the transaction. Realized losses in the given tax year can be used for tax equalization with regards to the previous or the following two tax years’ reported and paid tax liabilities. The income is subject to 15 percent income tax.
New items are added to the list of available tax-free benefits, for example bicycles and powered cycles (up to 300W power) provided by the payer entities to individuals.
The beneficially taxed “SZÉP” card maximum amounts, which have been increased due to the pandemic, can be provided until the end of 2021, and “SZÉP” card amounts provided by the employers are exempt from social tax until the end of 2021.
Business entertainment and business gifts provided by payer entities between 10 June and 31 December 2021 are also exempted from social tax.
The rate of social tax will be decreased by 0.5 percent to 15 percent as of 1 July 2022. Simultaneously, the vocational training contribution which is payable by the employer (currently 1.5 percent) will be abolished, while the related benefits can be further used to decrease the employer’s social tax liabilities (e.g. in connection with professional trainings).
No social tax payment liability will arise on the side of the payer entity if the student’s practical training is carried out in the framework of an apprenticeship agreement. Retired persons’ income will be exempted from social tax liability.
2. Corporate income tax
Donations provided to trustee foundations carrying out public duties may be used to decrease the tax base of the donator by 20 percent of the donation. With respect to certain donations to support universities, a tax base reduction of up to 300 percent of the donation may be applied, up to the amount of the total pre-tax profits. The new tax base adjustment is available for donations provided as of 10 June 2021.
3.Value added tax
VAT paid on uncollectible receivables can generally be reclaimed up until 6 months before the statute of limitations period expires. In exceptional situations, the VAT can now be reclaimed even if the right to determine taxes has extinguished due to the statute of limitation. The VAT on such receivables can be reclaimed within one year after the receivable became uncollectible under the VAT law’s definition – typically from the judicial decision becoming effective. Such claims are decided by the Tax Authority within 6 months.
With regards to the BREXIT, entities established in the UK have the right to reclaim Hungarian VAT based on reciprocity between the UK and the EU.
4.Temporarily available deferred tax payments
Between 10 June and 31 December 2021, additional tax payment facilitations are available to taxable persons. In this period, it is possible to request a tax payment deferral of up to 6 months or a payment in installments for a maximum of 12 months. This request is free of charge and it can be filed once in this time period, with respect to a tax liability of maximum HUF 5 million. Taxable persons other than individuals may also request a 20 percent reduction of their tax liability not exceeding HUF 5 million, from a tax type of their choice. These facilitations cannot be combined with each other or with a previously granted active facilitation. In the request it has to be explained in detail how the pandemic has adversely affected the claimant, which would justify the facilitation.