Accounting treatment of Hungarian extra profit taxes
– where to present these items in the Income Statement?

As reported in a previous newsletter (more details here: https://vgd.hu/en/news/professional-publications-newsletters/hungarian-extra-profit-taxes-2022-summer ), on 4 June 2022 the Hungarian Government promulgated Government Decree 197/2022 (VI.4.) on Extra Profit Taxes, which imposed additional tax burdens on many sectors of the national economy or increased existing burdens.

Accounting treatment of these extra profit taxes may raise questions. Clearly, where the Government has only increased the existing tax rates, the accounting treatment should be the same as the established practice. However, the accounting treatment of the newly introduced taxes requires consideration.

For many companies affected, the focus is not only on the Hungarian financial statements, but also on a parent company reporting package that is sent to the headquarters every month or quarter. In these companies, it is common for managers’ performance to be evaluated on the basis of these reports, so the classification of new items in the reporting packages is particularly important. There are several aspects to consider to comply with the external and internal regulations that apply to the company.

The experts of VGD Hungary are ready to assist Clients to ensure that the current changes are dealt with in their financial statements in accordance with the regulations.

30 June, 2022

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This newsletter provides general information and does not constitute professional advice