Tax News HU - New special taxes for retail businesses and credit institutions

Special tax levied on credit institutions by the Hungarian Government

Based on the government decree number 108 of 2020 (IV. 14.) the government has levied a special tax related to the corona virus on credit institutions, which will have to be reported electronically before 10 June 2020, and will have to be paid in three equal instalments (until 10 June, 10 September, and 10 December 2020). The amount of the special tax is 0,19 percent of the tax base, which is the modified balance sheet total. The special tax paid will be returned to the credit institutions during the following five years in equal instalments by deduction from the bank tax.

Hungarian Government levies special tax on retail businesses with higher revenue

The government introduced the special tax on retail businesses in government decree number 109 of 2020 (IV. 14.). The tax is payable by companies operating in the retail sector – regardless of the form of sales or tax residency, thus foreign online traders are taxable persons as well. The special tax itself is progressive based on the net revenue of the previous business year, and the tax rate is 0 percent if the revenue does not exceed HUF 500 million (SMEs who fall into this category are not obligated to report the special tax either). The part of revenues exceeding HUF 500 million, but not exceeding HUF 30 billion are taxed at 0,1 percent, while the part between 30 billion and 100 billion is taxed at 0,4 percent, and the part that exceeds 100 billion is taxed at 2,5 percent. Taxable persons have to pay tax advances on a monthly basis, first time until 31 May, and they have to report the first months’s amount as well until the same deadline. Due to the fact that the tax advances are to be calculated based on the previous year’s net revenue, those companies who have suffered at least 40 percent of loss of business profits in the given month compared to the previous year’s same period may request a tax reduction. There is also a general tax reduction request available for those companies who suffered such a great loss of business profits due to the corona virus, that the amount of special tax they would have to pay would not reach the sum of tax advances payable in the tax year.