Dear Client,
please allow us to inform you briefly about the most significant elements of the tax changes effective from 1 January 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
VAT return (eÁfa)
From 1 January 2024, taxable persons will be able to fulfil their VAT return obligations as follows:
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
Deadlines for issuing invoices
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