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Hungary Makes Bank Tax Permanent

By Ulrika Lomas, Tax-News.com, Brussels

22 November 2012


Hungary recently announced that a temporary tax on banks is to be made permanent, while the corporate tax paid by utility companies is to be raised to 50%.

The bank tax was introduced in 2010, and was originally due to be halved in 2012 and abolished in 2013. In 2011, these targets were put back by a year, and the revised promise to halve rates in 2013 was abandoned last month.

Bank tax rates are 0.15% on balance sheet totals of up to HUF50m, and 0.53% on balance sheet totals of HUF50m and above.

Hungary's decision will further delay the country's efforts to come to a deal with the International Monetary Fund and the European Union. The European Commission’s European Economic Forecast for Autumn 2012 recently warned of the effect of "distortionary taxes" on Hungary’s economy, noting in particular "very high extra burdens on the financial sector."

TAGS: tax | European Commission | Hungary | banking | International Monetary Fund (IMF) | corporation tax | tax rates | Europe

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