Hungary Andorra Tax AgreementFebruary 2023
The 2022 double tax agreement, DTA, between Hungary and Andorra applies from January 1, 2023.
According to the DTA the tax withholding rates are 5% for dividends, when holding in the paying company capital at least 20%, otherwise the rate is 15%.
The tax withholding rate for interest is 15%.
For royalties and technical fees the rate is 10%.
Hungary Andorra Tax AgreementOctober 2021
Hungary and Andorra signed on October 8, 2021 a double tax agreement, DTA, between the two countries.
The DTA which was signed during the visit of the Hungarian foreign minister to Andorra is expected to boost the bilateral economic ties between the countries.
For Andorra the new tax treaty is the 8th DTA so far.
Hungary V.A.T. RefundJune 2021
On June 8,2021 the summer tax package was enacted in Hungary.
The package relates to different time periods allowed for claiming V.A.T. refund for bad debts.
The filing period depends on the date when debts became bad debts. July 2021.
Hungary V.A.T RefundJuly 2021
Following the Hungarian summer tax package enacted on June 8, 2021 taxpayers can file late refunds for bad debts.
When a debt became a bed debt after 8.6.21 the V.A.T. refund has to be filed up to one year from the date on which the debt became bad.
When the debt became a bad debt within one year before 8.6.21 the refund form has to be filed before 8.12.22.
Hungary Tax ExemptionJanuary 2021
The Hungarian prime minister Viktor Orban announced on January 15, 2021 that taxpayers aged under 25 will be exempt from paying income tax on income under the average wages in Hungary.
It is estimated that the cost to the government will reach HUF 130 to 150 billion.
The exemption is expected to start before January 1, 2022 at the latest.
Hungary 2020 V.A.T. UpdateFebruary 2020
Starting January 1, 2020 the V.A.T. for certain accommodation services was reduced from previous 18% rate to 5%.
Hungary 2017 Tax UpdateDecember 2016
Starting January 1, 2017 a new flat 9% corporate income tax rate will replace the current 10% and 19% corporate income tax rates.
The social security tax will also be reduced in 2017 from 27% to 22%.
Hungary Saudi Arabia Tax TreatyJune 2015
The double tax treaty, DTA, between the two countries entered into force on May 1, 2015 applying from January 1, 2016.
The tax withholding rates according to the DTA will be 5% for payment of dividends and 5%/8% for payment of royalties.
The DTA also states that interest will be taxable in the recipient's country of residence.
Hungary Switzerland Tax TreatyOctober 2013
Hungary and Switzerland signed on September 12, 2013 a new protocol replacing the existing 1981 double tax treaty between the two countries.
According to the tax treaty the tax withholding rate for payments of dividends is 0%/15% depending on the type of recipient interest and royalties are taxable only in the country of residence of the recipient party.
The new tax treaty has yet to be ratified by the parliaments of both countries.
In general double tax treaties between two countries are boosting mutual investments between the countries offering reduced tax withholding rates from payments of dividends, interest and royalties.
The tax treaty often includes an exchange of tax information clause and definition of a permanent establishment for activities carried in the other country.
It also clarifies certain cross border tax issues.
E.g the treaty would define in what country tax is to be paid when a service supplier/consultant from country A provides services in country B.
In some treaties there is a tax credit under certain terms. E.g. an exemption to a consultant from country A of X dollars per each day of staying in country B in order to supply the taxable services.
Hungary's New 27% V.A.T. RateJanuary 2012
As we updated in our December update starting January 1, 2012 the new standard V.A.T. rate in Hungary increased from previous 25% to 27%.
Following the increase Hungary's standard rate is the highest in the EU.
Hungary Income Tax Rates 2011October 2011
In 2011 there is a new flat 16% tax rate for individuals replacing the 2010 rates of 17% and 32%.
For companies, income of up to HUF 500 million is subject to 10% corporate tax, replacing the 2010 ceiling of HUF 250 million.
Hungary 2011 Tax UpdateDecember 2010
There are several tax changes starting 1.1.2011.
The Hungarian personal income tax rate will change to a single 16% flat rate, replacing the 2010 tax rates of 17% and 32%.
The Hungarian corporate income tax rate will remain 10% and 19%, depending on the annual income, in 2011 and 2012.
The tax rate will change to a single flat 16% rate starting 1.1.2013.
There are also changes regarding tax withholding rates for payments to non-residents.
From 1.1.2011 payment of interest and royalties will be exempt from tax withholding.
Hungary New 10% Corporate Tax RateJuly 2010
The Hungarian parliment approved on July 22, 2010 a bill reducing the previous 19% corporate tax rate to 10% retroactively from 1.7.2010.
The new reduced 10% rate, the lowest in the EC relates to a tax base of up to HUF 250 million,from 1.1.2011 onwards up to a ceiling of HUF 500 million, about $ 2.3 million.
Hungary Tax Rates 2010March 2010
There are some significant changes in 2010.
From 1.1.2010 the new corporate income tax in Hungary is 19%, compared to the previous 16% rate.
The personal income tax rates are 17% and 32% , compared to the previous 18% and 36% rates.
A new net wealth tax was introduced from 1.1.2010.
The tax is imposed on luxury assets including aiplanes, boats and luxury cars and flats.
Hungary U.S. New DTAFebruary 2010
Hungary and the U.S. signed on 4.2.2010 a new double taxation treaty replacung the previous DTA from 1979.
For additional info visit www.ustreas.gov.
Hungary V.A.T. UpdateJuly 2009
As mentioned in our May update the standard V.A.T. rate was raised from 20% to 25%, effective from 1.7.2009.
A new reduced 18% rate , relating to hotels and basic food , was introduced too.
From 1.7.2009 social security contribution was reduced from 29% to 26% , up to a ceiling, twice the minimum salary.
Hungary V.A.T. UpdateMay 2009
The Hungarian prime minister presented on April 19, 2009 the new tax amendments.
The standard V.A.T. rate will be raised from the current 20% to 25%, effective 1.7.2009.
A new reduced 18% V.A.T. rate would be introduced for certain basic foodstuff.
The current reduced 5% V.A.T rate relating to books newspapers and medicines would remain unchanged.
From 2010 the corporate tax rate will be raised from the current 16% to 19%, while the 4% solidarity tax for companies would be canceled.
A new real estate wealth tax would be imposed from 2010.
Hungary Income TaxSeptember 2008
The Hungarian government proposed some tax changes, effective from 1.1.2009, if confirmed.
The corporate income tax rate is expected to rise from the current 16% to 18%, while the current 4% solidarity tax would be abolished, in total a 18% corporate income tax rate, compared to the present effective rate of 20% (including solidarity tax).
Other proposals include, inter-alia, full tax deduction for interest expense paid between related parties, compared to the current limitations relating to thin capitalisation and 50% tax deduction for interest between related parties.
The proposals have yet to be confirmed by the parliment.
Hungary Tax Rates 2008January 2008
Hungary tax rates for 2008 are similar to 2007 rates.
Hungary's corporate tax rate is 16%. Personal income tax rates are 18% and 36%, with slight changes in the tax brackets, compared to 2007.
The standard VAT rate in 2008 is 20%. there is also a reduced rated of 5%.
Hungary TaxesJANUARY 2006
From 1.1.2006 there are some major tax changes in Hungary.
The top V.A.T. rate is 20%(previous rate-25%).
The top marginal personal income tax rate is 36%(previous rate-38%).
Corporate income tax for the first HUF 5 million taxable income is 10%, 16% for taxable income in excess.
From 2008 the local business tax would be abolished.
Hungary Income Tax 2005OCTOBER 2005
The Hungarian government proposed some tax amendments to be effective from 1.1.2006
The amendments have not been confirmed yet by the parliment.
The major amendments include:
-Lowering the top marginal tax rate for individuals from 38% to 36%.
-Taxation of individual capital gains from securities at a rate of 25%.
-Increasing of tax credits and family allowances.
Hungary Taxes 2004JANUARY 2004
From 1.1.2004 the new corporate income tax rate in Hungary is 16%(previous rate-18%).
-The new tax rate for offshore companies is 4%(previous rate-3%).
-The offshore companies in Hungary will end after 2005.
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