TAX CHANGES 2020

As in previous years, significant changes in tax legislation have taken place from 1 January 2020. VGD Hungary launches a series of newsletters to highlight key legislative changes. In this newsletter, we would like to give you a comprehensive overview of the areas most affected by the new rules, while in the coming weeks we will be sending out regular newsletters detailing the most important amendments.

Given that each business may have a different area of interest, if you have an issue / question other than the one discussed in more detail in the coming weeks, please feel free to contact us.

Top areas of the tax changes – Highlights of our Newsletter-Series:

• VAT on uncollectible receivables as a tax base reduction – opportunities and dangers;
• Changes on invoicing and invoice data services effective from 1 April 2020, 1 July 2020 and 1 January 2021;
• Provisions on withdrawal of capital in the corporation income tax;
• VAT exemption conditions for Intra-Community supplies and methods of proof of delivery from 2020;
• New VAT rules for stock inventory harmonized at EU level;
• Rules for determining the place of performance for VAT in chain transactions.

Other areas of tax changes to be highlighted in 2020 include:

Value added tax (VAT)

• Decrease in the tax rate of commercial accommodation services
• Introducing a special tax refund
• Changes in the rules of travel organizations

Personal income tax (PIT)

• Introducing the online tax advance form
• Conceptual change in the private accommodation
• Change in the terms of long-term investment contracts made by a private foundation

Corporate income tax (CIT)

• Changes concerning the corporate taxpayer groups
• Reductions in retention conditions of tax relief of development
• Increase in the limit of offering tax advances
• Rules for hybrid structures and tax avoidance

Excise duty

• Changes in new types of tobacco products
• Increase in tax rates for cigarettes, fine cut and other smoking tobacco from 2020

In addition, we would like to emphasize that the Customs Act was amended in 2019, as well as on 1 January 2020, and the simplified entrepreneurial tax (abbreviated in Hungarian as “EVA”) was abolished as of 1 January 2020.

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Should you have any questions or practical issues related to the above, please contact our tax expert colleagues.