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Hungarian government submits tax bill

Banking

The Hungarian government today submitted a package to Parliament containing the previously announced amendments to the tax bill, Hungarian news agency MTI reported.

According to the bill, the top rate of the bank levy would be reduced from 0.53% to 0.31% in 2016, and to 0.21% in 2017. Hungary introduced the extraordinary bank levy as a temporary measure for three years in 2010, but it became permanent in 2013. The Hungarian government has recently been suggesting that the levy could be lowered in exchange for banks in Hungary increasing their lending

"From 2019, the tax rate will be on par with European Union norms," according to the justification attached to the bill.

The bill would establish the tax base for the bank levy from total assets in 2014, rather than from total assets in 2009, MTI said, adding that it would also stipulate that no bank would be required to pay a bigger bank levy than what they are expected to pay in 2015.

The bill would reduce the personal income tax rate from 16% to 15% from next year. It would also double the tax preferences for families with two dependents over four years from 2016.

It would reduce the VAT rate on unprocessed pork from 27% to 5%. Hungaryʼs Poultry Products Council earlier called for equal treatment in a statement today following the government’s approval of a reduction in VAT on unprocessed pork, while the rate for poultry remains at 27%.

The bill would allow a five-year tax deferral on the utilities tax for new data networks with a transmission speed of at least 100 Mbps.

The bill would make a one-off healthcare contribution by tobacco companies this year "permanent" from 2016.

The bill would exempt GPs whose annual income does not exceed HUF 10 mln from the local business tax. The preference would qualify as a de minimis subsidy.

The bill would allow tax deferrals on profit increase that it dubs a "growth tax credit".

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