Corporate income tax – Disclosed shareholdings
According to the provisions of the Act on corporate income tax effective up to 2017, if the taxpayer acquires a shareholding of at least 10 % in a Hungarian or a foreign corporation and discloses the acquisition within 75 days to the Hungarian tax authority, the gains on the disposal of the disclosed shareholding, after a holding period of at least 1 year, are exempt from the 9 % corporate income tax. According to the amended rules effective from 2018, the 10 % threshold for shareholding rate is no longer a basic prerequisite: the disclosure to the tax authorities, and as a consequence the tax exemption on the gains from the disposal after the holding period of 1 year, can be used for all acquisitions independent of the shareholding rate.
Transfer pricing documentation
The Hungarian Ministry of Economics has issued a new decree on the rules for transfer pricing documentation. The new provisions have to be implemented for documentation prepared for the tax years from 2018. Until 2017 the transfer pricing documentation, which had to be prepared by the Hungarian tax payer, had to contain a Local File with information on the agreements made between the tax payer and the associated company. Optionally the transfer price documentation could also include a Master File containing basic information on the whole group of companies. As a result of the change in the law, not only the Local File but also the Master File are now obligatory components of the transfer pricing documentation.
Value added tax – invoice data reporting
From 01.07.2018 those entrepreneurs who issue invoices with Hungarian VAT in the amount of at least HUF 100,000 (ca. EUR 320), are obliged to immediately report the data electronically to the Hungarian tax authorities, if the invoices are issued electronically by an accounting programme. Data relating to subsequent invoice modifications or cancellations is to be reported in the same way. The IT standards that have to be taken into consideration regarding form and minimum content are also regulated in a decree from the Hungarian Ministry of Economics.
From 01.07.2018 those entrepreneurs who do not use a software programme to issue invoices are also obliged to report invoice data (VAT amount over HUF 100,000 (ca. EUR 320) to the tax authorities. Information regarding the client’s tax number, the VAT amount to be paid, and the assessment basis, the invoice number and the date have to be reported with the help of a pre-printed form as part of the due VAT advance return. According to Hungarian law, invoices can only be issued in one of the two ways mentioned above. In this way the Hungarian tax authorities receive precise data on business transactions made, with a VAT amount exceeding 100,000 HUF (ca. 320 EUR).
The aim of this news is to provide general information about tax changes in Hungary for enterprises and investors. In order to clarify what steps shall be taken so that your undertaking properly complies with the above changes, please contact our tax experts in Hungary individually.
TPA offers an overview of the most important tax innovations in the following CEE and SEE countries in which we operate: Austria, Albania, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia. Investing in CEE/SEE 2018
- All current tax changes at one glance: TPA business news from 11 CEE/SEE countries