2016 Tax Law Changes in Hungary
This article presents the main tax law changes which affects on foreign investors who have business in Hungary.
Hungarian Individual Tax decreased from 16% to 15%.
The social security insurance expense for those people who aren’t insured by employment increased from 6930 Forints to 7050 Forints.
New Tax categories
From 1st January 2016 the Goverment introduced two new taxation categories. The „reliable” taxpayers come in for preferences, and stricter rules prevail for the „risky” taxpayers.
The Tax Authrority qualifies „reliable” those taxpayers who are VAT registered since at least 3 years, they shouldn’t have more than 500,000 Forints tax debts, and not „risky” taxpayers. The taxpayer’s total tax margin shouldn’t be more than the 3% of the recent year’s tax output. There is no bankrupt, liquidation, duress cancellation procedure against the taxpayer. No ongoing process of tax number suspending against the taxpayer.
Advantages of being a „Reliable” taxpayer.
The duration of a tax investigation by the Tax Authorities cannot be more than 180 days.
If the taxpayer miss to fulfill his/her commitments of notifications, avowals, supplying of datas, they don’t get penalties automatically, only after the warning of the Authority. The amount of the penalties decreased by 50% for them. They can pay the penalty in portions.
The Authority qualifies „risky” those taxpayers who are on the list of having significant tax debt or deficit, employing unregistered manpower or the Authority closed their business more than one time in a year.
For „risky” taxpayers the duration of tax investigation increases with 60 days.
The deadline of wiring back the claimed back VAT takes 75 days.
The interest rate in case of default of paying is 5 times higher than the basic interest rate of the bank of issue.
The top limit of the maximal penalty can be increased by 50% compare to the regular rules.
Other tax procedure changes
Tax registration process
The rules of tax registration process get stricter. In case of decline the stating of tax number the examined tax debt limits decrease from 15 and 30 to 5 and 10 million Forints and the duration of the investigation increases from 180 to 360 days.
Integration of tax and customs accounts
The tax and customs office will have a concerted account and records from 1st January 2016.
Public debt free taxpayer database
In case of the cancellation from the public debt free tax payer database the taxpayer can appeal against the cancellation within 8 days after he/she receives the notification.
Corporate tax
Growing tax credit
From 15th June 2015 a new postponed tax paying option added to the corporate tax system. This is the growing tax credit . With this construction the companies can postpone their tax paying obligations.
Other new prominent corporate tax law- All the expenses under 30 million Forints which came up correlated to an advertisement publication are acclaimed expense without any other extra conditions.
Local business tax
Research and development tax allowance
Taxpayers can decrease their basic local business tax with 10% of the total amount of their yearly Research / development („K+F”) direct charged expenses.
From 2017 taxpayers can submit their local business tax avowal electronically.
7,5% of highway and road fees can be deducted from the local business tax.
Fiscal charge
There is no fiscal charge after onerous buying utility vehicles and green vehicles.
No fiscal charge for tenants and inheritors after buying real estate.
The owners of green vehicles don’t have to pay vehicle tax.
2016 TAX LAW CHANGES IN HUNARY
PART 2
Value Added Tax
Restriction of validating Tax reduction right duration
In case of purchasing within the EU and in case of VAT established by self taxpaying- tax reduction right will be validatable only in the period when the reducable tax revealed.
Periodically settling transaction changes
In case of periodically settling transactions the period of performance will be the last day of the paying period or settlement according to the main rule.
Changes for grouped taxpayers
From 2016 the possibilities to join the VAT group of economic companies operated by Govt. or local autonomies will be increased.
Exemption of Invoice issuing
If foreign taxpayer provides telecommunication, media or other E-communication service for Hungarian individuals, he/she doesn’t have to issue invoice, only if the customer requires.
5% VAT key for newly built real estates
This new law applies to apartments with have less than 150 sqm place or houses with less than 300 sqm place. The new VAT key can be applied for invoices issued after 1st January 2016.
Lump sum price for product fee liable vehicle parts
New option for vehicle manufacturers and dealers. An option for quantity based lump sum price paying. The first domestic distributor or stockpiler can choose the lump sum price payment for vehicle parts.
Registration tax
No tax will be applied for the 100% electronic, aerial charged hybrid electronic, zero emission and extended range hybrid vehicles.
Ready Made Companies
Each investor willing to set up a company is aware that time is money and any entrepreneur who has a good idea for a business must begin to implement it as soon as possible.
As the procedure for setting up a company from the beginning requires more time and effort, Ready Made Companies are an excellent profitable choice for a quick acquisition and immediate business start up.
We have a wide range of available European Ready Made Companies. Buying a shelf company is a perfect option for business investors who do not want to register a new company. Our ready made companies have already been incorporated but have been left dormant. This means that these companies did not perform any business activity during their lifetime, have no public debt or any other outstanding obligation. The purchase agreement will include this statement. The only steps you will need to make are to change the ownership, the scope of activities and optionally the name of the company. This is the quickest option to have your business fully operational immediately!
Benefits of a Ready Made and Aged Companies
- Immediate acquisition and business start up providing there is the supply of sufficient IDs and company documents.
- Shelf Companies are already incorporated but left dormant. This means companies did not perform business activities during their lifetime and have no public debt or outstanding obligations. The purchase agreement will include this statements.
- Usually have bank accounts open and completed EU VAT number registration, which could save you many weeks or even months in some countries!
- An Aged Company is established in the market, giving it credibility and age which in turn can be very useful for creditors and tender biddings.
- Change of ownership, directors, scope of activities, bank signatories and optionally the name of the company are sufficient to fully operate your business.
- Company purchase documents can be signed off anywhere in the world.
How does it work?
Shelf company purchase steps
You can purchase a ready made company remotely from your country or set up an appointment with us in our Budapest office. With an appointment you need to spend only one day in Budapest.
If you decide to buy your company remotely, the order process is the following:
You get ahold of us via email/chat/phone and we liaise about your inquiry. If necessary we provide more general and country specific company information to our clients.
You either fill out our order form or our colleague is going to send you an email with a questionnaire, including Your suggestions for company name and future scope of activities.
In the next step we are going to send you a 50% advance pro forma invoice. You can pay it either by bank wire or by cash.
You need to send us a copy of your valid Passport, for EU citizens government issued ID is sufficient, and a copy of your address card. For EU citizens these items have to be notarized and sent back to us. For non-EU citizens the documents have to be notarized by the local consulate of the destination country or notarized and apostilled.
We will send you the necessary corporate documents to sign either via email or post, whichever is your preference.
For EU citizens these documents have to be notarized and sent back to us. For non-EU citizens the corporate documents have to be notarized by the local embassy of the destination country or notarized and apostilled.
In most European countries the company’s bank account can be assigned remotely by authorization. Please ask for country specific details from us or visit our Company Registration menu on our website!
Please select your ready made company below
We try to collect all subjects about the related services and publish on our pages to help you make a better decision. If you have any further questions or need scheduled services please contact us at email@irodacenter.com email address.
