The Autumn taxation draft law
On 7 November, 2024, the government submitted a draft Law to the Hugnarian Parliament, introducing several tax measures for individual taxpayers and companies.
It can be accessed on the parliament's website by clicking here. The following significant changes are expected.
By increasing the family tax allowance, the amount of the family tax allowance will increase significantly (by 50%) from July 1, 2025.
The application of the 5% VAT rate on the sale of new residential properties has been extended until December 31, 2026, and in the case of protracted construction projects, this can even be extended until 2030. In addition, in the future, it will be possible to spend 50% of the employer subsidies transferred to the SZÉP Card on home renovation.
The draft includes the exemption from duty and building tax applicable to historic properties, and the reduction of the personal income tax exemption condition for sales following the renovation of historic properties from 5 years to 3 years.
The inflation-tracking calculation method will be applied to the following types of taxes:
• Excise tax: Itemized excise tax on alcoholic beverages, tobacco products and fuels (petrol, diesel, LPG),
• Car tax: Tax payable on motor vehicles
• Registration tax: Tax payable when motor vehicles are first registered
• Company car tax
• Fee on purchasing vehicles.
A change in corporate tax in the future will be the possibility of applying depreciation write-offs for land used for hazardous waste storage.
An important change in legal harmonization is that in the future, the individual tax exemption is expected to be applicable not only to domestic sales, but also to foreign sales. At the same time, the upper limit does not change, so according to the draft law, the combined amount of domestic and foreign sales of a Hungarian taxpayer may not exceed 12 million forints (unfortunately).
The tax package contains significant administrative simplifications in the area of accounting, raising the thresholds for simplified annual reports (balance sheet total would increase from 1.2 billion to 2 billion, while net sales would increase from 2.4 billion to 4 billion forints). In the spirit of simplification, the threshold for the obligation to prepare consolidated annual reports will also increase significantly (from 6 billion to 10 billion forints for balance sheet total, and from 12 billion to 20 billion forints for net sales), while the criterion for exemption from the audit obligation regarding net sales will increase from 300 million forints to 600 million forints. The conditions regarding the number of employees, on the other hand, do not change.