Hungarian autumn tax package effective January 1, 2018
The Hungarian Parliament adopted significant amendments to tax legislation affecting procedural rules for tax authorities and income taxation, effective January 1, 2018.
Key Administrative Changes
Two new acts entered into force: the Act on the Rules of Taxation and the Act on the Rules of Tax Administration. These reforms introduced stricter procedures for tax authority rulings with enhanced appeal mechanisms and enforceability provisions. Tax audits became more streamlined, with a maximum duration of 365 days. Taxpayers gained the ability to self-revise their returns provided the tax authority had not initiated an audit. Additionally, tax authorities may now offer assistance to startup companies during their first six months of operation.
Corporate and Indirect Tax Modifications
Development tax incentives tied to corporate income tax became available for tangible asset investments valued at least HUF 8 billion or job creation investments reaching HUF 3 billion or more. The VAT rate decreased to 5% for internet access services, restaurant-supplied food and non-alcoholic beverages, fish for human consumption, and certain specialized pork products.
Social Contributions and Healthcare
Both the social tax rate and healthcare charge rate were set at 19.5% effective January 1, 2018.