Multinationals in trouble: Hungarian government imposes new special tax, keeps excess profit tax
Last year, the Hungarian government promised to abolish the “excess profit tax” on banks, multinationals and energy companies in 2024. However, instead of doing so, it is now imposing a new excess profit tax on these companies. In addition to the transaction tax, the government is imposing extra charges on foreign exchange transactions.
Multinationals to have an even harder time in Hungary
During Monday morning’s Cabinet Briefing, Gergely Gulyás, the minister in charge of the Prime Minister’s Office, said that
a “defence contribution” will have to be paid to multinationals that made “excess profits” during the war.
The same applies to the banking sector and energy companies, Economx reports.
The government negotiated a reduction of the bank tax, but according to Gulyás, many financial institutions took advantage of a loophole in the purchase of government securities, with all banks that did not increase their total holdings of government securities having to pay the bank tax in full.
In effect, the measure means that the government will not eliminate the special taxes on multinationals, banks and energy companies. What is more, it will impose extra charges on foreign exchange transactions in addition to the transaction tax.
Budget deficit reaches HUF 2,656.4 billion at end-June
Hungary’s cash flow-based budget deficit reached HUF 2,656.4 billion (EUR 6.8 billion) at the end of June, the finance ministry said in a preliminary release of data on Monday.
The central budget had a 2,640.1 billion forint deficit at the end of the month and the social security funds were 161.9 billion in the red, but separate state funds were 145.6 billion forints in the black.
The budget deficit reached 107.8 billion forints for the month of June alone.
Interest expenditures, which included large payments on retail government securities, came to 2,009.5 billion forints in January-June, up 649.4 billion from the same period a year earlier, the ministry said.
Expenditures for European Union-funded programmes reached 945.7 billion forints, while transfers from Brussels came to 578.2 billion forints, the ministry said.
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