Hungary: New expected tax takes effect

Banking

The law replacing the “expected tax” took effect July 1. The government hoped to have Ft 60 billion yearly extra income from the original version of the tax; which was eventually annulled by the Constitutional Court in February.

The stricter inspections that replace the earlier regulation and the companies' fear of them may boost the budget incomes by Ft 10 billion – Ft 15 billion ($54.7 million- $82 million). According to data of the Tax Office, 118,000 companies make losses and 18,000 break even from the existing 315,000; which means only the rest of them pay the 16% profit tax. The situation is even worse among individual entrepreneurs: 210,000 of 321,000 make no profit according to their tax returns. According to the regulation, companies and entrepreneurs whose profits do not reach 2% of their turnover may choose to pay the tax after 2% profits or fill out a questionnaire by which the Tax Office will decide if a closer inspection is necessary. (NG 4)

 

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