Budapest

From 1 July 2012, a new tax is payable on various telecommunication services, such as phone calls, SMS and MMS messages. (This article is available in Hungarian only.)

Companies often receive services that are directly recharged to their customers or to other entities within the company group. Special VAT and local business tax rules apply to these services, which are not new, but give rise to a lot of misunderstanding in practice. Therefore, our article summarizes the key aspects that should be considered with regard to such services. (This article is available in Hungarian only.)

The new Labour Code entered into force on 1 July 2012. Our article summarizes the key changes, which concern among others the rules of overtime, granting of holidays, termination of employment, work allowances and the liability of managers and certain other employees. (This article is available in Hungarian and German.) (*) Our summary was prepared together with the law office Bánki & Partner in cooperation with TaylorWessing e|n|w|c. Contact: Dr. Orsolya Bánki, o.banki@taylorwessing.com, www.taylorwessing.com

From 2013, a new financial transaction tax will be introduced. Among others, the following financial transactions will be taxable: bank transfer, direct debit, cash payment from bank accounts, cash transfer, payment on cheque, etc. (This article is available in Hungarian only.)

To promote the maintenance of jobs, employers may receive various allowances from the social contribution of 27% and the training fund contribution of 1.5%. Benefits apply for the employment of persons under the age of 25 and above the age of 55, for the employment of permanently unemployed or unqualified persons, or for employees returning from child care. (This article is available in Hungarian only.)

A new insurance tax will be introduces from 2013. At the same time, the insurance surtax of financial service providers will be abolished. The insurance service is taxable if the risk covered is located in Hungary. The tax is payable by the insurance service provider based on the gross insurance fees. (This article is available in Hungarian only.)

Two new optional tax schemes will be introduced from 2013 for small entrepreneurs: the flat tax ("KATA") and the small entrepreneurs' tax ("KIVA"). This article summarizes the key rules and conditions of the small entrepreneurs' tax. (This article is available in Hungarian only.)

Two new optional tax schemes will be introduced from 2013 for small entrepreneurs: the flat tax ("KATA") and the small entrepreneurs' tax ("KIVA"). This article summarizes the key rules of the flat tax scheme. (This article is available in Hungarian only.)

Key changes: Transfer of a business unit. Cash-flow based VAT. Invoicing, simplified invoices, electronically issued invoices. Extension of the domestic reverse charge procedure. The threshold for tax exempt small enterprises increases to HUF 6 million. Place of supply rules of the long-term hiring of vehicles. VAT deduction on repair and maintenance services related to passenger cars. VAT refund for foreign taxpayers. (This article is available in Hungarian and German.)

Key changes: Special tax rules of intangible assets and shares reported to the tax authority. Definition of a controlled foreign company (CFC). Calculation of the alternate minimum tax base. Triple tax base allowance for research and development (R&D) costs. Thin capitalization. Loss carry-forward. Development tax allowance. Deductibility of product samples transferred. Non-deductibility of subsidies provided to small entrepreneurs that are subject to the special tax scheme ('KIVA'). (This article is available in Hungarian and German.)