Hungary adopts new tax bill
The extension of the scope of online billing could not only bring up to tens of billions of forints to the central budget but it will also ease administrative burden on businesses as the tax authority will make their draft VAT returns starting from the spring of 2022.
Parliament has passed a bill that could contribute to Hungary's economic growth through cleansing the market and easing the administrative burdens of businesses,
the state secretary said.
At present, online billing only forwards data to the National Tax Authority (NAV) on invoices that are made out to domestic VAT subjects and the VAT value is above HUF 100,000. This limit will disappear from next year, which means the NAV will in theory receive data on all invoices. Starting from 1 July, the tax authority will receive a copy of all invoices on B2B transactions, with invoices made out to private individuals to follow suit on ' January 2021, Izer explained. This could minimise the risk of tax evasion for all players in the economy, which could lead to substantial extra budget revenue, he added.
Market players estimate that online invoicing brought in extra tax revenue of HUF 200 to 250 billion this year. The new system could result in tens of billions of forints more, but will also lead to tangible direct profit for fair players as it will put a damper on the activities of fraudulent taxpayers.
Tax cuts will continue in 2020 as well, Izer said. The government will offer a lifelong exemption from personal income tax to mothers of four or more children, the small business tax rate will drop from 13% to 12%, and the tax on commercial accommodations will be 9 percentage points lower. Parliament will vote on a bill on contributions next week that would offer exemption to all working pensioners.
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