We summarised the most important tax changes that took effect on 1 January, 2018.
As of 1 January, 2018, the new minimum wage in Hungary is 138,000 HUF (appr. 440 €) for positions that do not require qualification; and 180,500 HUF (appr. 580 €) for qualified positions. This represents an increase of 8% compared to the past year’s level. At the same time, in order to compensate the employers for the increased employment costs, the Parliament decreased the rate of social tax from 22% to 19.5%.
The fringe benefit system has been amended with a new item: employers may now provide subsidy to their employees to payback student loans which is tax free up to HUF 27,600 provided that the employee presents the loan agreement as well as the transfer of the regular payments. The tax rate on specific fringe benefits, such as meal vouchers (‘Erzsébet-utalvány’), work canteen tickets, local transport ticket, school start allowances, gift vouchers, private health fund and pension fund contributions, has been decreased from 43.66% to 40.71%.
From 1 January, 2018, employers will no longer be entitled (nor obliged) to prepare tax returns for their employees. On the other hand, since last year the Tax Office prepares a draft tax return for all employees (who, if they agree, may simply accept and return the draft and thereby comply with their obligations). From this year, not only employees but farmers and VAT payer private individuals may choose this option.
Consumable fish, certain processed pork products, internet service, restaurant food and non-alcoholic, local-made beverages are now subject to the beneficial VAT rate of 5%. However, restaurants shall pay a new tax, namely the allowance for the development of tourism which is 4% of the net fee of the concerned services.
The Ministry of Internal Affairs confirmed that as of 1 January, 2018, all companies shall use the Entity Gate (‘Cégkapu’) as the single point of contact with authorities in Hungary. This means that any request or communication with state organs shall be made electronically via this platform. The statement followed the statement of the Tax Office saying that they were unable to keep the deadline to integrate their processes to the new system and, therefore, the Entity Gate will not be mandatory in tax procedures yet.