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The first section of the decree published yesterday in the Hungarian Gazette (639/2020. (XII. 22.)) establishes the following:
“In the fiscal year ending in 2021, in the case of an entrepreneur (hereinafter: entrepreneur) in accordance with Law C of 1990 on Local Taxes (hereinafter: Htv.), Which complies with the provisions of the Law of 2004 on small and medium-sized enterprises and their support for the development of the conditions for classification as micro, small and medium-sized enterprises in accordance with Law XXXIV of In the case of the SME Law, the net sales revenue or the limit of the total value of the balance sheet specified in Section 3 (1) (b) of the SME Law shall not exceed HUF 4,000 million (in ahead: micro, small and medium enterprises), the local business tax rate will be 1 percent, if the tax rate established in the municipal decree applicable in the fiscal year ending in 2021 is greater than 1 percent. “
These companies must “pay 50 percent of the tax advance due in 2021, on the given anticipated payment date, declared in accordance with the Law and declared in 2021 at the tax rate in accordance with the tax regulation of the local government in each due date”.
In other words, the tax halving applies to companies with a total balance sheet or net sales of less than HUF 4 billion.
In accordance with the other sections of the decree, the tax authority automatically reduces the amount of the employer’s business tax advance obligation, without making a decision, by the amount of the unpaid advance. The quality compliance of a micro, small and medium-sized company is determined as follows:
- the reporting entity is the last report prepared and approved in accordance with Law C of 2000 on Accounting, in the absence of an approved report, available on the first day of the tax year beginning in 2021, the estimated total of the balance sheet, billing and the count data;
- The entrepreneur is not obliged to prepare a report with the billing and staff data for the fiscal year ending in 2020, in the case of an entrepreneur who starts its activity in 2021, the estimated turnover and the template data.
The halving can also be applied if the contractor declares to the municipal tax authority of its registered office or establishment before February 25, 2021 that:
- qualifies as a micro, small and medium business,
- is entitled to use the amount corresponding to the aid content of the measure in the first stage in accordance with a separate government decree as transitional aid, and
- On December 31, 2019, Decree 37/2011 on the state aid procedure and the regional aid map in the sense of the competition law of the European Union did not qualify. (III. 22.) Government Decree (hereinafter: Atr.) In accordance with Section 6, Paragraphs (4a) – (4b).
Eligibility is also subject to the condition that, if you have not done so by then, the CL. has not done so in accordance with point 29 (1) of annex 1 of the law – announces the address of its premises. The above declaration can only be submitted through the state tax and customs authority, electronically, in an electronic form provided by the state tax and customs authority.
Cover image: Getty Images
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