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Lawmakers approve tax changes

Parliament on Tuesday approved legislation affecting a number of tax changes, according to a report by state news wire MTI.

The law was approved with a vote of 124 for, 20 against, and 32 abstentions.

It doubles the annual revenue threshold for Small Business Tax (KIVA) eligibility to HUF 3 billion.

Businesses that opt for KIVA pay a flat rate on a tax base of payroll expenditures plus dividends and capital transfers. KIVA businesses are exempt from the payroll tax, training tax, and corporate tax.

The law introduces a full tax exemption for specified volumes of pálinka, the Hungarian eau de vie, distilled for private consumption, in line with a recently issued European Union directive. The exemption is in force from January 1, 2021.

It raises the excise tax on cigarettes from January 1 and again April 1, 2021 in order to comply with EU rules on the tax content of tobacco products.