Based on the Hungarian government decree, the tax authority may, on one occasion, give a taxpayer up to 6 months of an interest-free payment deferral or up to 12 months of interest-free payments in installments based on a submitted application, if it is likely that the payment difficulties can be attributed to the state of emergency. The application and the justification for the payment difficulties must be submitted by 31 December 2021, and the relief may be requested for tax registered at the tax authority of up to no more than HUF 5 million.
If paying the tax debt would make it impossible for the applicant to continue its business activity for reasons attributable to the state of emergency, the tax authority may reduce the tax debt once by up to 20%, but by no more than HUF 5 million. Such applications must be submitted by 31 December 2021, and a tax reduction may be requested for one tax type only.
If a tax debt is reduced, no payment relief may be authorised for the remaining amount. A tax debt reduction may not be authorised if the tax authority has granted payment relief to the taxpayer.
Social contribution tax exemption
The regulation, which entered into force on 10 June 2021, exempts pensioners liable to pay social security contributions in respect of other income, also no social contribution is to be paid after 10 June 2021 for student contracts. This regulation is linked to the date of payment and not to the reference period.
SZÉP card and tourism development contribution
The government decree once again extends the social contribution tax exemption in Hungary on amounts that can be granted – as fringe benefits – under the Széchenyi Rest Card (SZÉP card) for 2021 benefits, and retains the amount of the allowance raised last spring and already extended on one occasion. Until 31December 2021 SZÉP card holders are free to use the balance on their cards for payments at the point of sale, regardless of the sub-account (pocket) on which they have it.
The lower tax burden on SZÉP cards has been maintained, only 15% Personal Income Tax has to be paid, and are exempt from paying social contribution tax until 31 December 2021. The exemption for companies with KIVA was left out of the amendments, so their SZÉP card benefits will again be subject to KIVA from 1 July 2021. (Hopefully, this regulation will be amended soon.)
No tourism development contribution needs to be assessed, declared or paid from 1 January 2021 until 31 December 2021 either.
Tax changes 2022
Social contribution tax
From 1 July 2022, the social contribution tax rate will be reduced by half a percentage point to 15%. The vocational training contribution - while the benefits will be maintained - will be included in the social security contribution, i.e. employers’ the tax burden on the wages will be reduced by a further two percentage points from 1 July 2022.
Income from a cryptocurrency transaction
Based on the new Hungarian rules, from 2022 the income from the sale of the crypto asset no longer forms part of the aggregate tax base, it qualifies as separately taxed income, and no social contribution tax has to be paid on it.
Based on a transitional provision, private individuals who did not assess income before 2022 in respect of the transfer or assignment of crypto assets may assess income under the new rules and take this into account as transaction income for 2022.
In Hungary, the method for determining the income from a transaction in crypto assets follows the logic similar to that for determining income from a controlled capital market transaction. Income is generated when the aggregate amount of the transactional profits for the fiscal year exceeds the aggregate amount of the transactional losses realised in the reporting year and the fees and commissions related to the conclusion of the transactions. The latter include the verified expenses for the reporting year not connected to the specific transaction but related to the holding of crypto assets.
Transactional profit is generated when the obtained revenue exceeds the verified expenses spent on the fees and commissions related to the acquisition of the crypto asset and the transaction. However, no transactional revenue has to (can) be established if the revenue from the transaction does not exceed 10% of the minimum wage in Hungary. The latter provision can be applied if, as of the date the income is acquired, the private individual does not earn income from other transactions regarding the same subject, and the sum of such income does not exceed the minimum wage in the fiscal year.