Hungary - Changes to Transfer Tax Regime for 2010 [29 May 2009]
Effective 2010 the stamp duty on the transfer of commercial real estate will be changed. The current 10% rate will be reduced to 4% for real estate valued at HUF 1 billion or less; for values in excess of HUF 1 billion the rate will be 2%. The maximum stamp duty will be capped at HUF 200 million.
At the same time transactions subject to transfer tax will be broadened to include also the transfer of shares if real estate is included in the assets; for this to kick in at least 75% of the shares should be transferred.
Hungary - Government Reveals its Plans for 2010 Personal Income Tax and Social Security Contribution Changes [27 May 2009]
According to a bill put forward by the Government, a number of provisions in the personal income tax act are being proposed to be amended for 2010. Please find below the most important amendments proposed.
- From 2010, the base of the personal income tax will be the gross income increased with the employers’ contributions. If the consolidated base is less than or equal to HUF 5 million, personal income tax at a rate of 17% will have to be withheld. If the annual income exceeds HUF 5 million, HUF 850,000 will be withheld and the part of the income above HUF 5 million will be taxed at 32%.
- The solidarity surtax will cease to exist in name, but will be incorporate in the highest income tax bracket.
- The personal income tax base will be redefined as consisting of the gross wage increased with the employers’ contributions.
- Effectively 1 July 2009 the employer social security contributions for wages up to twice the minimum wage will be reduced from 32% to 27%. For higher wages this reduction will become effective as of 1 January 2010.
- The itemized health care contribution (currently HUF 1,950/month) will be abolished.
Hungary - Government Reveals its Plans for 2010 Corporate Tax Changes [25 May 2009]
According to a bill put forward by the Government, a number of corporate income tax related provisions are being proposed to be amended for 2010. Please find below the most important amendments proposed.
- The corporate tax rate will be increased from 16% to 19%. However, at the same time the solidarity surtax of 4% will be abolished, thus effectively reducing the nominal tax rate with 1% from 20% to 19%.
- Capital gains realized on the alienation of shares in a Hungarian company will be subject to Hungarian corporate tax if the assets of the company consist to a significant extent (at least 75%) of real estate. Provisions of applicable tax treaties may however override this.
- The Hungarian participation exemption will no longer be available for subsidiaries which assets consist predominantly (at least 75%) of real estate.
- For interest, royalties and service fees paid to a corporate recipient domiciled in a country with which Hungary has no tax treaty with a 30% withholding tax will be introduced. The payer will have to determine and deduct this withholding tax.
- Credit institutions will be eligible for applying loss cary forward. This provision is intended to a retroactive working in the sense that losses incurred in 2009 can be offset against 2010 profits.
Hungary - Changes to the VAT Regulations [22 May 2009]
The Hungarian government has announced the following changes to its VAT Act to be effective as of 1 July 2009:
- The general VAT rate will be increased to 25%.
- For certain basic goods the VAT rate will be reduced to 18%; these good are - amongst others - milk, certain dairy products, bread and other bakery products and (subject to EU approval) from the 1st of August district heating.