CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. Contributed Articles
  3. Changes to taxation in Hungary from 2022

Changes to taxation in Hungary from 2022

Contributed by Company Express kft
July 29, 2021

The Hungarian government has established many favourable taxation conditions in the past years with the aim of making Hungary an advantageous investment zone for foreigners too, and this tendency is proceeding further on. The pandemic situation also influenced the economy of Hungary, but the Government had successfully took the obstacle and introduced some new measures in order to ease the situation of entrepreneurs. For 2022 the Government is going to execute new rules in order to achieve the goals mentioned above more effectively.

During the pandemic the Government has eased the situation of the employers by reducing the tax rate of the social contribution tax from 17.5% to 15.5%. From 2022 the Government will further reduce it to 15%. Additionally from next year the obligation of paying 1.5% contribution to vocational training by the employers will be terminated on the basis of the gross salary of their employees. With these new measures the tax burdens of the employers regarding wages will be decreased with 2%, which can be especially favourable in case of significant amount of employees.

The Government also did not forget easing the situation of the smaller entrepreneurs, mainly with establishing a much more favourable upper limit for those sole traders who choose the flat tax rate (this taxation form can be appropriate for those who do not have too much expense invoices and want to reduce the payable tax after the income). Currently the upper limit of this taxation form is 15,000,000 HUF (approximately 41,500 EUR), but from 2022 it will be ten times the amount of the yearly minimum wage (calculating with the minimum wage in 2021 this will be more than 20,000,000 HUF), which thereby will significantly extend the range of entrepreneurs who can choose this.

The Legislation about paying taxes after the profit on cryptocurrencies will also be constituted from next year. Presently the laws are not formulating clearly in regard to this, therefore the general 30.5% tax rate applies for the profit. From next year the new taxation rules will contain obvious legal provisions on this subject, and the tax rate will be decreased to 15% on the profit.

Furthermore new items will also be introduced that reduce the pre-tax profit in connection to the corporate tax. The obligation for paying the special tax will be terminated for the venture capital fund managers and for the stock- and produce exchange service providers as well. The Government will ease the rules on the VAT as well, on one hand it will be possible to request a refund of the VAT which has been mistakenly paid to the seller from the tax authority after the limitation period up until 1 year after the occurrence of the cause (currently it is only possible within 6 months before the statute of limitation). On the other hand this will also apply for the VAT of the irrecoverable claims.

Apart from these the Government has also made it possible for those entrepreneurs who are suffering from the pandemic situation to request a one-time payment postponement or instalment from the tax authority until 31st of December 2021. In case of payment difficulty even tax reduction can be requested once with maximum 20%, but it can be on one tax only and can't exceed 5,000,000 HUF.

As you can see from all the above the Government is putting maximal effort so the economy can recover from the pandemic situation and to make Hungary a really auspicious investment zone within Central Europe. If you are willing to incorporate in Europe you should take Hungary into consideration with its extremely low tax rates and conditions which are just getting better and better.


Tags: Hungary | tax



Back to Articles

Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »

Network Blogs and Features