On 17 November 2020, the parliament approved a bill introducing amendments to the corporate income tax. The bill includes the following tax measures:
- The small business tax rate will be reduced from 12% to 11% effective from 1 January 2021. In addition a wider range of companies will be eligible to choose this type of tax, the threshold of income, as condition for eligibility, will be increased from HUF 1 billion up to HUF 3 billion. The revenue limit above which the taxpayer automatically loses the status of small business is increased from HUF 3 billion to HUF 6 billion.
- The abolition of advanced corporation tax payments applies to companies with an annual turnover of more than HUF 100 million. This means that the concerned companies must make their tax payments with their tax returns by May 20th of each year and not by December 20th of the previous year.
- The gradual reduction in the project value threshold for the development tax discount from currently HUF 500 million to HUF 50 million for small companies and to HUF 100 million for medium-sized companies by 2023.
- A reduction in the VAT rate on supplies of hotel and accommodation from 18% to 5%.
