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Parliament approves 2010 tax changes

Parliament on Monday approved the Bajnai government's package of tax changes for 2010 with a vote of 211 ayes, 152 nays and a single abstention. The changes were a condition for Hungary's €20 billion support package from the IMF, EU and World Bank.

The package will raise the threshold for the lower, 17% personal income tax bracket to HUF 5 million in 2010 and to HUF 15 million in 2011 although the tax base will also be raised to include payroll taxes.

A 25% tax will be levied on extra-wage benefits such as hot-meal vouchers. The vouchers were earlier tax exempt. The preferential tax will apply to vacation vouchers up to the monthly minimum wage, to hot-meal vouchers up to a monthly HUF 18,000, to training contributions up to two and half times the minimum wage, to school-starting support up to 30% of the minimum wage, to voluntary pension fund contributions up to half of the minimum wage and to voluntary healthcare funds up to 30% of the minimum wage.

The state tax office APEH will collect the Local Business Tax, although local councils will remain the recipients of all revenue from the tax.

The package raises the rate for the Simplified Business Tax to 30% from 25% next year, and it introduces a tax on incomes that go to offshore companies.

It introduces a 19% tax on revenue from sales of stakes in or capital withdrawals from companies in which real estate comprises more than three-fourths of assets.

The tax on home purchases will remain 2% up to HUF 4m, but fall to 4% from 6% on any value over that.

The package raises the excise tax for petrol, diesel, alcohol and cigarettes. Taxes on energy will also increase.

The National Culture Fund will be supported with a tax on revenue from sales of the state lottery company's popular pick-five game. (MTI-ECONEWS)