Tax changes 2024

1. Law about the taxation

Automatic payment by instalments

Companies can also benefit from the automatic instalment facility (up to HUF 1 million tax debt, one instalment payment per year can be requested up to 6 months without surcharge).

Companies' tax payments in foreign currency

The government decree regulating the payment of corporate and business tax in EUR and USD have been incorporated into the Taxation Act.

Vehicle tax

The vehicle tax is payable once a year (instead of twice a year) until 15 April. Private individuals can apply for payment in 5 monthly instalments if they submit their application to the tax authority by 30 June of the year in question.

Group corporate tax liability

Taxpayers who start their activities during the year must submit their application within 30 days of the date of registration with the tax authorities if they wish to join as a member of a group corporate taxpayer. For taxpayers already in business, the deadline for applying to the tax authorities to join a group corporate taxpayer remains unchanged, i.e. between 1 and 20 November of the tax year.

2. Value added tax

Location of performance

In accordance with Council Directive 2006/112/EC as amended by Council Directive 2022/542/EU

in the case of services supplied to a taxable person which provide access to cultural, artistic, scientific, educational, entertainment, sporting or similar events, including services incidental to such events, the place of supply of services shall, as a general rule, be determined by reference to the place of virtual participation in the event;
in the case of all services supplied to non-taxable persons which are made available by means of on-line mediation or any other virtual means, the place of supply is the place where the non-taxable person receiving the service is established or, in the absence of establishment, the place where the person has his or her permanent address or habitual residence.

VAT return (eÁfa)

From 1 January 2024, taxable persons will be able to fulfil their VAT return obligations as follows:

by submitting the form provided for this purpose, or
complete or correct the data provided by them using the electronic interface provided by the tax authorities and then approve the draft return prepared in this way, or
approve as a declaration a tax return drawn up from data transmitted by the tax administration using a computer interface in a published form and format.

WE REQUEST OUR CUSTOMERS TO NOT APPROVE THE E-VAT FILING, because if the taxpayer files his return in more than one way, the first return submitted will be considered the taxpayer's return and can only be corrected by self-control.

Changes in VAT rates

the VAT rate for publications (newspapers) published at least four times a week will be reduced from 5% to 0%
VAT rate on imports of works of art 5%
the VAT classification of infant formulas for special medical purposes (foodstuffs) and infant milk substitutes and infant milk follow-on formulas (foodstuffs) subject to the 5% VAT rate has been clarified
Dairy products of the dessert type falling under VTSZ 1806 and 2106, which were previously subject to a 27% VAT rate, will be subject to an 18% VAT rate

Deadlines for issuing invoices

for EU supplies of services where VAT is paid by the recipient (reverse charge), the invoice must be issued by the 15th day of the month following the month in which the service is supplied (not changed);
if the consideration is reimbursed (by cash or by bank transfer) by the date of fulfilment or, in the case of advance payment, by the date of assessment of the tax due, the invoice must be issued without delay;
in other cases not mentioned above, the invoice must be issued within 8 days (not changed).

Compulsory Redemption System (DRS)

From 2024 the new Compulsory Redemption System will come into force, which has also an affect of VAT. The sales tax base for mandatory redemption products that are not reusable (e.g. PET bottles) will not normally include the redemption charge. However, in the case where such products subject to a redemption fee are not redeemed, they are considered as a supply of goods subject to VAT. VAT is then based on the redemption price itself, which include the amount of VAT. The taxable person liable for VAT on goods not redeemed is the taxable person operating the deposit-fee redemption scheme. The date on which the VAT liability is established is the last day of the calendar year.

3. Corporation tax

Accrued losses

Accrued losses incurred up to 31 December 2014 can be used indefinitely to reduce profit before tax (the previous limit of 31 December 2030 has been removed).

Benefit for investment or renovation for energy efficiency purposes

The amendments to the EU General Block Exemption Regulation (GBER), applicable from July 2023, have been integrated into the rules of the Corporate Tax Act.

A significant change in the corporate tax relief is that the definition of eligible costs has been clarified. The definition of an alternative investment or renovation has been added to the definition of the Law, which is an investment or renovation with a production capacity and a lifetime similar to the investment or renovation to be carried out by the taxpayer, which meets the applicable EU standards and which the taxpayer would have carried out credibly in the absence of tax relief or other state aid.

We kindly ask our customers to contact our colleagues for further details on the Energy Efficiency Tax Credit, if required.

4. Other taxes

Advertising tax

Until 31 December 2024, the advertising tax rate is 0% of the tax base.

5. Local business tax

If a break in self-employment lasts for less than 181 consecutive days in a tax year, the tax liability for local business tax will continue from 2024, which means that no extraordinary tax return will have to be submitted in the case of such a break.

From 2024, if a person is subject to business tax as a self-employed person and also as an organic farmer, the income as organic farmer will be included in the threshold for business tax.

Budapest, 15 January 2024

Krisztina Gubicza

Chartered Tax Expert