Official: Tax cuts to continue in 2021

Families looking to buy homes and small businesses will be among the beneficiaries of the government’s tax cuts in the year ahead, finance ministry state secretary András Tallai said in an interview in daily Magyar Nemzet’s Saturday edition.

Hungarian taxpayers by now can expect the government to introduce tax changes at the start of the year that benefit them, Tallai said.

The state secretary noted that the VAT rate on newly built homes is reduced from 27 percent to 5 percent from Jan. 1. Also, all home purchases made with the government’s CSOK housing subsidy scheme are exempt from duties, he said.

For small and medium-sized businesses, the government has decided to halve the local business tax rate.

Companies with annual turnover of 4 billion forints (EUR 11.0m) or less and with fewer than 250 people on the payroll qualify as SMEs with regard to the measure, the state secretary noted. The tax cut will help some 800,000 businesses, he added.

The Small Business Tax (KIVA) has been lowered from 12 percent to 11 percent and the revenue eligibility threshold raised to 3 billion forints from 1 billion for first-time KIVA-payers and to 6 billion forints from 3 billion for companies that earlier opted to pay KIVA, Tallai said.

The government has also changed the rules governing the Itemised Tax for Small Businesses (KATA), he noted. KATA taxpayers who invoice a single company will now have to pay a 40 percent tax on income above 3 million forints.

Also, as of Jan. 1, households are allowed to make an annual 86 litres of palinka, the national eau de vie, for their own consumption tax free, Tallai said.

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Source: MTI