Tax News - Extra profit taxes

The retail sector’s tax is raised from 4.1% to 4.5% in the highest category, and this new rate shall be already applied for the calculation of the tax advance for 2024.

The extra profit tax of the credit institutions and financial services is prolonged for 2024, too, with significant changes in its methodology. In 2024 the base of the tax is the profit before tax reported in the 2022 financial statement, reduced by revenues from dividends and profits obtained through non-ordinary activities. The tax base is elevated by the banking tax, transaction fee and extra profit tax included in the 2022 results. The rate of the extra profit tax is 13% for the part of the tax base not exceeding HUF 20 Billion, and 30% above. The tax liability may be reduced if the  daily average stock of Hungarian government bonds held by the taxpayer is increased between January-November 2024, compared to the stock held during January-April 2023. The rate of the reduction is 10% of the stock increase, up to the maximum of 50% of the tax liability.

The extra tax on the pharmaceutical sector is extended for 2024 in case of both the producers and the distributors. However, the rate of the tax in 2024 is reduced to 50% of the previous rate with respect to producer companies. The tax rate of distributors is increased from 28% to 40% in case of medicine with a producer price exceeding HUF 10,000, and this increased rate is already applicable for the calculation of the tax payable until 20 July 2023.

The tax package elevates the rules of the extra profit taxes introduced previously via government decrees to the level of legislation with unchanged content in case of the airlines’ contribution, the income tax of energy suppliers, and the rules of transaction fees, public health product tax and excise tax. Insurance and telecommunication taxes are also extended for  2024 with unchanged content.