Parliament approves tax laws for 2016

Banking

The Hungarian Parliament today approved a package of previously announced tax changes for 2016, with 133 voting in favor and 39 voting against, Hungarian news agency MTI reported.

Under the law, the rate of personal income tax will fall by 1% from 16% to 15%. Additionally, tax preferences for families raising two children will double to HUF 20,000 per child a month gradually over four years as of next year.

The VAT rate on unprocessed pork will be significantly reduced to 5% from 27%, a measure which has led to an outcry by poultry producers.

Under an agreement signed between the Hungarian government and the European Bank for Reconstruction and Development (EBRD) on February 9 of this year, the top rate of the bank levy will be reduced to 0.31% of total assets in 2016 from 0.53% this year and will be lowered further between 2017 and 2019. Although the Hungarian government introduced the extraordinary bank levy as a temporary measure, it later became permanent.

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