On 26 May 2022, the Hungarian government published important taxation related fiscal measures for the next two years (2022-2023).
Sectors that make “extra profits” in the current difficult situation must contribute a part of their extra profits into two state funds.
Most effected sectors are energy industry, banking, insurance, large retail chains, telecommunication, pharmaceutical distributors, and airlines. Furthermore, advertising tax will be introduced again, there are actions planned to restructure KATA system that is the most popular tax on small entrepreneurs and increase of excise duties on tobacco and alcohol products, increase of public health product tax and company car tax increase is also planned.
Extra profit surtaxes being introduced are as follows:
1. Energy sector
Due to the additional profits from hydrocarbon extraction, power generation, fuel refining the energy sector will also pay a special surtax by the increase in mining royalty (approximately 6 times increase of it) and as a tax on refinery spreads (most effected firm will be MOL). On top of this bioethanol companies will become subject of Robin Hood tax (energy suppliers’ surtax).
2. Banking sector
Surtax will be based on net interest income plus on income from fees and commissions (exact rate is not yet published). On top of it, financial transaction tax will be extended as well.
3. Insurance sector
The surtax is supposed to tax the extra profit realized from the continuously growing demand for self-empowerment furthermore with the increased insurance premiums driven by inflation.
4. Retail sector
The existing sectoral surtax would be raised as follows:
- Tax bases between HUF 30 billion to HUF 100 billion will be subject to a tax rate of 1.0% instead of the current 0.4%.
- Over a tax base of HUF 100 billion, the tax rate increases from 2.7% to 4.1%.
Revenues from roaming, internet and cable TV services will be subject to the special surtax, exact figures are not published yet.
6. Pharmaceutical distributors
The surtax is planned to affect only companies with no manufacturing capacity in Hungary and the surtax will be based on the social security subsidy paid back to the budget, rising from the current level of 20% to 24%.
Surtax will be levied on airlines at a rate of around EUR 10 per passenger departure.
8. Advertising tax
Media companies, publishers, users of outdoor advertising space, internet advertising and, in certain cases, advertisers ordering advertising media, will have to pay the surtax on the advertising revenue or cost.