Dear Our Client!
Please let me tell you few words about the changing of Hungarian taxation rules in 2016.
- Change of Personal income tax rate
From 01/01/2016 the Personal Income Tax rate will be changed to 15 percent instead of 16 percent. This means
e.g..
- if somebody gets 122000 HUF gross salary, her/his net salary will be increased by 1220 HUF.
- At 200000 HUF gross salary level the net salary will be increased by 2000 HUF
At the same time the in-kind benefit taxes will be changed.
E.g. the tax for local travel pass will be changed to 34,22% from 35,1%. In case of representation, the tax will be 49,56% instead of 51,17%.
- Change of family benefits
In the case of families with one child the 62500 HUF tax base allowance (it means 10000 HUF tax benefits) won’t be change, only the amount of the allowance will align to the decreasing personal income tax rate.
In case of families with two children, a higher allowance can be used next year. It means 12495 HUF allowance per child.
Practically the net wages of employees are rising by 2495 HUF if she/he can use the tax allowance.
Also there is no change in case of families with three (or more) children.
Please note that the allowance can be used only for the amount of the real tax or other contribution payable.
Of course the sharing between spouses is available, so please take it into consideration at the beginning of the year.
- Health care contribution
The amount of monthly health care contribution will be changed to 7050 HUF. This tax is only payable for the retired entrepreneurs and uninsured persons.
- Change of the rules of invoicing
Major changes are expected in the area of “permanently-settled transactions”, which means periodic transactions (eg. rental fees, continous monthly fees). At first, it seems a very complicated legislation so please try to understand it completely. It must be used from the 1st of January, 2016.
Please note that the ad hoc invoicing (single works) won’t be changed. It is still in force that the invoices should be issued within 15 days after delivery/fulfillment date.
Permanently-settled transactions
Main rule: the fulfillment date is the last day of the period
First special rule: if the payment deadline and the date of invoice are before the last day of the period then the fulfillment date will be the same as the date of invoice
E.g.: monthly service of October fee is invoiced on the 5th of October and the payment deadline is before the 31st of Oct (eg. 15th of Oct). In this case the fulfillment date will be on October 5.
Second special rule: the payment deadline is after the settlement period
Part I: If the payment deadline does not exceed 30 days after the last day of the settlement period, the fulfillment date will be equal with the payment deadline (same as the actual rules)
E.g. monthly rental fee of October is issued on 31st Oct. The payment deadline is on the 10th of November and the fulfillment will be on 10th Nov.
Part II: If the payment deadline is later than the thirtieth day after the last day of the settlement period. In this case the fulfillment date will be the thirtieth day after the settlement period.
E.g. monthly rental fee of October is invoiced on 31st Oct, the payment for payment will be on 10th December. In this case the fulfillment day will be 31st October + 30 day = 30th November.
- Change of the regulation for invoicing-softwares
From 01/01/2016 the programs must provide data export function for the Tax Authority. Some softwares, which are currently unable to do it, need to be reprogrammed and the new features should be included in the program documentation as well.
For more information, please contact with the invoicing-program developer.
- Reliable and risky taxpayers will be distinguished
From 01/01/2016 the reliable taxpayers get positive treatment under the tax control, while the risky qualified taxpayers get more stringent treatment.
A company can be reliable taxpayer if all of the following conditions (together) are fulfilled:
- a) at least there is three closed years,
- b) at the last 5 years the tax authority did not find any tax difference (or max. 3%),
- c) at the last 5 years the tax authority did not apply enforcement proceedings,
- d) at the last 5 years there was no bankruptcy, liquidation or forced cancellation process;
e) at the first day of the quarter-year does not have more than 500000 HUF tax deficit;
f) at the last 5 years there was no tax number suspension; - g) at the last 5 years there was no tax number deletion;
- h) at the last 2 years there was no more than twice tax penalties;
- i) at the last 5 years the company was no under high risky procedure;
- j) the taxpayer is not considered risky taxpayer.
The taxpayers who receive the “reliable taxpayer” qualification:
– Tax audit won’t be more than 180 days;
– The tax authorities won’t use immediately fines or penalties, but draws the taxpayer’s attention to correct the reports;
– The tax penalty upper limit will be 50 percent of the generals;
– Automatically receive a 12 monthly free installment payment discount (once a year);
– In 2017 the VAT return will be 45 days; in 2018 it will be 30 days.
The Tax Authority qualifies the taxpayer “risky taxpayer” if the company is under the liquidation, winding up, not being forced cancellation proceedings and at least one of the following conditions are met:
– The company is on the list of non-taxpayers with large sum;
– The company is on the list of employing undeclared employees;
– Within one year there is two business closure
The taxpayers will qualify risky taxpayer for 1 year unless the company terminates the cause of risky condition or activity .
The punishment of the risky taxpayers
– Deadline for the VAT return will be stay 75 days according to the general rules;
– In their case-control tax deadline is extended by 60 days;
– Stricter treat will be used for the define of the tax fine,
- The tax authority fines can’t be ignored,
- The amount of the fines shall not be less than the 50% of the minimum fine and maximum will be 150% of the general.
The Tax Authority classifies the companies after the first quarter year of 2016.
- ’s obligatory registered capital rise
03/15/2016 is the final deadline to the old companies to increase the minimum registered capital amount to the minimum level (3000000 HUF).
The share capital can be increased with the positive results (if any) from the previous years, with shareholders’ loans, or with new (private) amount.
- Significant changes in accounting law
- In the future, the dividends will be recorded in the fiscal year.
In practice, it means that it is not necessary to determine in advance the amount of the dividend. It can be decided on during the year
- There will be a small change in the form of balance sheet and profit and loss account, There won’t be extraordinary result, and the profit and loss account will only contain how the profit after taxation is calculated.
Sources: adozona.hu, ado.hu, pallas70.hu
If you have questions with these points, please contact with us.
Budapest, 30th October 2015.
Best Regards,
Perscriptor Könyvelőiroda Kft.
