On 17 October 2023, Hungary’s Ministry of Finance initiated a public consultation process regarding a draft law for implementing the corporate minimum tax under Pillar 2 as per the Council Directive (EU) 2022/2523 of 14 December 2022.
The government initially opposed implementing a corporate minimum tax but eventually adhered to the OECD’s global minimum tax proposal. According to this directive, large multinational (MNE) groups must pay a corporate tax rate of 15% on their profits, provided that the consolidated annual turnover of the group is at least EUR 750 million. The rules apply to all domestic and international groups with a parent company or subsidiary in an EU member state.
If the country where the subsidiary company is based does not impose a minimum effective rate, the member state of the parent company can impose a “top-up” tax. The public consultation on the draft bill will continue until 25 October 2023. The proposed legislation will come into effect for fiscal years starting from 31 December 2023, except the UTPR, which will apply to fiscal years commencing on or after 31 December 2024.
