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The Finance Ministry has submitted a bill on tax exemptions to parliament, the ministry said.
With the amendments, the small business tax will become more favorable next year, businesses will receive assistance in completing their VAT returns, the vast majority of first instance civil service cases will be tax free, and private home cooking and the salaried kitchen will once again be tax-free.
The proposal also contains new rules for the European Union, which must be applied in all member states, according to the statement.
The bill includes proposals from the Economic Protection Operational Tribe (GOT) to reduce fiscal bureaucracy, which, during the coronavirus crisis, continue to help Hungarian companies and ensure employment protection declared the prime minister.
Communication emphasizes Businesses can expect one of the most significant tax breaks from the government starting in the second half of 2021. The tax office can prepare a draft VAT return for half a million companies. In addition to preparing the more complicated return, startups can count on greater relief. The period of special and personalized assistance, the so-called mentoring period, has so far been extended to one year. It will also be easier to pay off tax debts. People with a debt of up to one million guilders and companies classified as trustworthy based on their tax history can request a 12-month installment payment with no installments on their debts, with one simple application.
Significant business tax breaks are also included. This is because construction activity that lasts less than 180 days will no longer be subject to business tax on temporary activity next year, which may give another boost to the national construction industry in addition to five percent of the VAT on new homes. Approximately 94,000 companies with more than one location will also benefit in 2021, as they will not have to submit their local business tax returns to all affected municipalities, it will be enough to send a single one to the National Tax and Customs Administration, the statement explains.
The tax incentive system will be simplified and made more transparent. Following the example of the family tax credit, the so-called personal benefit for certain illnesses is also calculated from the tax base next year. The amount of the discount continues to grow year after year along with the minimum wage. The corporate tax credit system will also be affected by the simplification, which will remove the 10 billion HUF limit on the development reserve of companies next year.
In addition to easing bureaucratic burdens, tax breaks can be expected from small business tax voters, fruit growers, public administration administrators, and travel agents. Exempting middle sellers from paying the contribution to the development of tourism, which could leave around 3 billion guilders in around 2,000 tourism businesses, will make things easier for some players in the tourism sector most exposed to the coronavirus epidemic, said the Prime Minister.
They point out that the small business tax (kiva) will be even more favorable next year not only because the tax rate will be lowered to 11 percent, but also because more businesses will be able to choose the most competitive type of tax in Hungary. The income threshold will increase from the current one billion to three billion guilders, and the exit threshold from three to six billion guilders.
Except for the issuance of certain documents, as of 2021, the administrative procedures of the first instance will be tax-free, allowing the administration of one and a half million cases of the public administration becomes free every year. The Hungarian government has been fighting for free beer brewing since 2010 and all EU citizens have been able to enjoy this opportunity. The government will apply the favorable rules as of January 1, 2021. Next year, all Hungarian fruit-producing citizens can cook 86 liters of fruit brandy per household in their private kitchen duty-free. The exemption also applies to contract firing up to the same amount of distillate per year.
The proposal also contains new European Union rules that must be applied in all Member States. One of them is the European Union e-commerce VAT package, which, among other things, removes the tax exemption for import shipments that do not exceed € 22. That is, from July 1, 2021, all goods ordered from abroad (non-EU countries) will be subject to VAT. Foreign traders who benefit from the tax exemption rule have hurt not only the budgets of the Member States, but also the fair companies operating in the European Union market. Some fraudulent companies within the EU have abused the provisions of the single market, but this loophole is also closed with an amendment in favor of national farmers, which establishes that from 1 July VAT must be paid in principle in the State consumer member for distance sales. and PM.
Hungary must also apply the rules of the European Union’s tobacco tax directive. Waiting as long as possible, the government will increase the excise tax on tobacco products in two steps starting on January 1, so that on April 1, 2021, the excise tax rate will reach the lowest minimum level required by The EU.
AT / 13258. Bill No. “modifying certain tax laws” is available at this link, said the Ministry of Finance.
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