On 12 July 2019, the Hungarian Lawmakers approved the 2020 budget. The budget targets revenue of 21,426.0 billion forints and expenditures of 21,793.0 billion forints, producing a deficit of 367.0 billion forints.
Highlighted features of the budget:
- Cut the social contribution tax from 19.5% to 17.5% with effect from July 2019.
- Reduction in the rate of small enterprise tax (KIVA) from 13% to 12%.
- Cancel the simplified entrepreneurial tax (EVA).
- Cancel the advance tax payments for companies that realize an annual turnover in excess of HUF 100 million (the year-end top-up) so that such entities may settle their tax due with their annual tax return, instead of in the last month of the year.
- Decrease the VAT rate on accommodation services from 18% to 5%, while extending the 4% tourism contribution tax to such services.
The social contribution tax reduction applies from 1 July 2019, while the other measures generally apply from 2020.
