TAX LAW CHANGES 2022

Extraordinary payment facility

The Act promulgated on 17 November 2021 (Act CXV of 2021 on the Entry into Force of Act XCIX of 2021 on the Transitional Rules relating to the Emergency) extended the possibility to benefit from the exceptional payment relief introduced during the emergency until 30 June 2022. Accordingly, companies can benefit from a one-off tax reduction or an instalment reduction/deferral of payment in the period from 1 December 2021 to 30 June 2022, regardless of whether or not they have benefited from such a payment facility this year.

The terms of the extraordinary payment facility have not changed compared to the current rules:

• at the request of the taxpayer, for a tax of up to HUF 5 million, a one-off payment deferral of up to 6 months without surcharge fee or an instalment payment of up to 12 months without surcharge fee may be granted if the applicant, at the time of submitting the request, establishes that their payment difficulties are likely to be due to the emergency situation,

or

• at the request of the taxpayer, the tax debt may be reduced on one occasion only by up to 20%, but not exceeding HUF 5 million, provided that the payment of the tax debt would make the applicant's economic activities impossible for reasons attributable to the emergency. (A reduction may only be applied for in respect of one kind of tax).

The above tax reduction and instalment/deferred payment cannot be combined.

However, the good news is that the general restrictions set out in the Act on the Rules of Taxation do not apply to the extraordinary payment facility described above. This means that the exceptional payment facility should be also applicable to contributions and tax deducted from the taxable income of natural persons, taxes collected on behalf of other taxable persons, and also to any taxes payable by taxpayers who are members of the VAT groupings or corporate income tax groupings.

30 November, 2021.

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Should you have any questions regarding the latest tax law changes, the tax experts of VGD Hungary will be pleased to assist you.

This newsletter provides general information and does not constitute tax advice