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Parliament passes bill reducing payroll tax

The Hungarian Parliament yesterday passed a bill that will reduce payroll tax from 27% to 22% from next year, and to 20% from 2018, as well as adjusting the healthcare contribution accordingly, reducing it from 27% to 22% in 2017, according to Hungarian news agency MTI.

The bill also establishes a 9% flat-rate corporate tax from January 1, 2017. The corporate tax rate is currently 10% on a tax base up to HUF 500 million, and 19% over that, MTI added. 

The bill was submitted to Parliament by Minister for National Economy Mihály Varga early this month, after plans for cutting the payroll tax were announced in November and the government claimed to have reached agreement with employers and unions on a big minimum wage increase.

The bill also allows local governments to extend a building tax to surfaces used for advertising. Municipal councils could decide on the scale of the annual tax, which the bill would cap at HUF 12,000 per square meter, MTI added.

The bill was passed with 146 voting in favor, seven voting against, and 27 abstaining.