Extra profit taxes levied on other sectors

1.    Airline contribution

As of 1 July 2022, airline contribution liability should arise on passengers departing from Hungary (excluding transit passengers), depending on the destination. Despite its name, the airline contribution will not be imposed on airlines, but on ground handling service providers.

For European destinations - excluding Belarus, Russia and Turkey - the contribution amount should be HUF 3,900, while for other destinations it should be HUF 9,750.

The first assessment, declaration and payment should be due for the month of July 2022, and thereafter the tax obligations will be due on a monthly basis, by the 20th day of the month following the assessment month. The contribution assessment should be supported by appropriate internal records.

2.    Special tax on pharmaceutical distributors

In 2022 and 2023, instead of the current single 20% tax rate, a "two-rate" tax will be introduced on medicines and baby food subsidised by social security and sold in pharmacies:

• 20% for medicines with a producer price not exceeding HUF 10,000;
• 28% for medicines with a producer price exceeding HUF 10,000.

Liable taxpayers:

• the marketing authorisation holder of the medicine, or
• the distributor (if the authorisation holder does not carry out distribution activities in Hungary), and
• the applicant for social security subsidy for a nutritional product or its distributor (if the applicant is not the same as the distributor of the product).

The special tax should apply for the first time to the payment due by 20 July 2022, i.e. the tax should be payable on April 2022 turnover.

3.    Telecommunication surtax

Taxpayers providing electronic communication services should be liable to pay the telecommunication surcharge for the tax years 2022 and 2023 (therefore, network operators are not automatically taxed).

Tax base: net turnover as defined in Hungarian Act C of 1990 on Local Taxes. The tax rate is progressive in bands: 0% on revenue of less than HUF 1 billion, 1% on the part between HUF 1 and 50 billion, 3% on the part between HUF 50 and 100 billion and 7% on the part above HUF 100 billion.

For the tax year including 1 July 2022, in addition to the telecommunication tax already applicable, the telecommunication surtax should be assessed by 30 November 2022 on the basis of the net turnover of the liable taxpayers for the tax year starting in 2021. In addition, they should make advance payments (equal to the amount of the 2022 surtax) until the last day of the 5th month of the tax year starting in 2023.

Under certain conditions, the income of affiliated companies should be aggregated and the effective tax should be apportioned between them in proportion to their turnover. The aggregation rule is intended to prevent such restructuring that would help avoid the tax liability, so it will only apply to companies created by division or spin-off after 1 June 2022 or to transfers of assets between existing related parties after that date.

4.   Retail sales tax

Until 30 November 2022 an additional, one-off retail tax liability should apply to companies subject to retail tax for the tax years including 1 July 2022, or the tax year beginning after that date. The amount of the additional tax liability should be 80% of the amount of the retail tax for the (last) tax year beginning in 2021, calculated on the basis of the calendar days of the tax year for 365 days (annualized).

For the tax year beginning in 2023, the retail tax rates should be as follows:

1. 0% on the part of the tax base not exceeding HUF 500 million,
2. 0.15% (instead of the present 0.1%) on the part of the tax base exceeding HUF 500 million but not exceeding HUF 30 billion,
3. 1% on the part of the tax base exceeding HUF 30 billion but not exceeding HUF 100 billion (instead of the present 0.4%),
4. 4.1% (instead of the present 2.7%) on the part of the tax base exceeding HUF 100 billion.

  June 9, 2022

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Should you have any questions regarding this newsletter, the tax experts of VGD Hungary will be pleased to assist you.

This newsletter provides general information and does not constitute tax advice.