hungary update - kathalin bartha
DESCRIPTION
TaxationTRANSCRIPT
VAT – Reverse ChargeReverse Charge at domestic transactions in case of
services relating to real property• Works of construction (eg. turn-key contracts)• Services of construction-erection, • Maintenance, • Cleaning, cleansing,• Servicing,• Repairing, • Refurbishment and demolition • Temporary manpower services to the above
businesses
VAT - Cross-border TransactionsWork on goods within the EU
Reverse Charge at all kind of work on movable property, goods, even if it is cleaning, sortment, etc. provided that the customer identified for VAT purposes in another member state and the good are delivered to it
Chain Transactions Joint liability for all parties in the chain, if they are
• Domestic tax payers or should have been registered for VAT purposes in Hungary
• Affiliated companies
VAT refund
Claim for VAT refund
• Min. HUF 1 Million - obliged for monthly return, • Min. HUF 250 Tsd - obliged for quarterly return, • Min. HUF 50 Tsd - obliged for annual return,
(Only for VAT of which VAT has fully been settled.)
Retrospective registration for VAT purposes
VAT - Invoicing
Time limit for issuing invoices – within max 15 days after fulfillment
Rectified invoice, Summary invoice
Currency rate – rate of any banks having licence for money-change (not only the rate of National Bank of Hungary)
The amount of VAT in HUF always indicated!
VAT - Fixed establishment Fixed establishment in VAT – almost in line with
EU judgments• Permanent presence of human and technical
resources necessary for rendering services• Fully dependent on HQ• (To produce rational result)
VAT registration number as place of fulfillment – no more applicable
VATGroup Taxation - only in VATFor affiliated companies domiciled in Hungary No force of being involvedJoint and severe liability for all members and non-
members
Transfer Pricing in VAT - Market priceIf affiliated companies defer from it
VAT payable that is indicated on the invoiceVAT deductible at a maximum of VAT in case of market price
Transfer PricingHigher risks
– OTC transactions listed in the suppl. enclosure– Penalty HUF 2 Mio pro missing or not proper
documentations (contracts)– Has each affiliated company been declared to the TA?– Is the trasnfer price (amendments) correct? – Constant loss-makers– Comparable price within the company– Delivery of market / business activity
APA - Fee: 1% (HUF 5 – 12 Mio); Arbitration Convention
Corporate Income Tax
General rate 16 % + surplus tax 4 %10 % HUF 0 – 5 Mio HUF 0 - 50 MioPreconditions are stronger than before
Tax incentive for companies that are to be listed Reserve for development
25 % 50 % of the profit; max. HUF 500 Mio/year„Holding” incentive
Min. holding period of 2 years 1 year from 2008Definition of license has been amended
Personal Income Tax - InsentivesFamily incentives
up to HUF 6 Mio salary, 3 (+) children, HUF 4000/month/child
Even for EEC individuals
Employer’s contribution to Healthcare Funds 20 % 30 % of the minimum wage (THUF 69)
Employer’s Pension Fund50 % of the minimum wage (THUF 69)
PIT – Capital Gain TaxIncome from SWAP - 25 %
but pure stock exchange transactions (20%), no-risk transactions (other income)
Credit of loss with tax adjustment:– Pro transactions– No deduction by the disburser, but providing data to the TA– Declaration, tax paying by the individual
Income from interest – „collective investment securities”Listed securities 20 % (HU+EGT + OECD)Tax creditNo DTA; a minimum of 5 % tax
PIT – Capital Gain Tax
DividendDividend + advance payment of dividend from abroad10 % tax; EU EGT
Income from stock exchange transaction EGT – OECD definitionIncome pro tax year (not pro transaction), 20 % taxLoss from stock exchange transaction (within 2 years) by tax adjustment
Social InsuranceEmployer’s contribution 2007 2008
- health care contribution 8 % 5 %- pension contribution 21 % 24 %
= 29 % 29 %Employee’s contribution
- health care contributionin-kind 4 % 4 %financial 3 % 2 %
- pension contribution. 8,5 % 9,5 %= 15,5 % 15,5
%(Private pension contr. 8+0,5% 8+1,5%)
Thank you for your attention!
Contact:Contact:
ABT Hungária Tanácsadó Kft. Katalin Bartha cert. Tax Expert
Telephon: 430-3392
Fax: 430-3402
Website: www.abt.hu
E-mail: [email protected]