Economy 10 July 2024, 12:55pm

Important details unveiled about new Hungarian tax package

Portfolio

From January 2025, telecommunication companies and pharmaceutical manufacturers will no longer have to pay extra profit tax, and insurance companies will also be able to deduct half of their windfall profit tax liability, under certain conditions, commercial broadcaster ATV cited Economy Minister Márton Nagy as saying at a press conference on Wednesday. Revolut and Wise will not have to pay the additional transaction tax if they exchange at the mid-rate.

From January 2025, telecoms and pharmaceutical companies will no longer have to pay an extra profit tax, but Márton Nagy said the special levy on banks is justified.

As banks have not increased their holdings of government securities, the rules had to be changed "to make clear the government's will", i.e. that they need to buy instruments that mature after 2027.

"Basically, the thinking was that we would halve [the extra profit tax] if the banking system bought government securities. The banks' profits can absorb this extra profit tax, they had a very good year in 2023," the minister said in response to a question from ATV.

Márton Nagy confirmed that the bank tax will be around HUF 280 billion in nominal terms, of which HUF 140 bn can be deducted and HUF 140 bn will have to be paid.

Insurers will also be able to deduct 50% of the extra profit tax, under certain conditions, during a period determined by the purchase of government securities and the accrual, the minister said.

In response to journalists' questions, Márton Nagy also said that if Revolut and Wise switch at the middle rate, they will not have to pay the increased duty.