A government decree published late Saturday clears how high the extra tax of the different sectors will be in Hungary. The fifth Orbán administration announced before that they would like large companies to pay a tax based on their “extra profit”. Among others, there will be an extra tax on plane tickets, the company car tax will double, and we will have to pay after each Revolut-type transfer. Here are the details!
According to hvg.hu, the government published its relevant decree after their three-day away session in Sopron. The government calls the extra tax on plane tickets the airliners’ contribution. In that case, there will be two tariffs. If the flight’s destination is the EU, the United Kingdom, Northern Ireland, Albania, Andorra, Bosnia and Herzegovina, North Macedonia, Iceland, Kosovo, Liechtenstein, Moldova, Monaco, Montenegro, Norway, San Marino, Switzerland, Serbia or Ukraine,
the extra tax’s rate will be 3,900 HUF (EUR 10.18) per passenger. In other cases, it is 9,750 HUF (EUR 24.88).
The extra tax concerns only passengers departing from Hungary. As a result, the decree does not apply to transit passengers.
Theoretically, the subjects of the new tax are the ground service companies, not the passengers. However, companies may include the extra tax in the ticket prices.
For example, Wizz Air already announced that they might raise their prices because of the government’s extra tax.
Based on the government decree, the transaction duty on securities transactions will be 0.3 percent. The maximum will be 10 thousand HUF (EUR 25.52). We will have to pay that when we buy the securities. The only exceptions will be the investments offered by the Hungarian State Treasury and the Hungarian Post. Interestingly, companies providing cross-border financial services will also have to pay the transaction duty like Revolut or Wise. It will be 0.3 percent per transaction, while its maximum will be 10 thousand HUF. Before, the maximum was 6 thousand HUF (EUR 15.31).
The extra tax on banks will be 10 percent in 2022 and 8 percent in 2023. The basis of the tax assessment will be the previous year’s net income. Insurers will have to pay a progressive extra tax ranging between 2 and 14 percent in 2022 and 1-7 percent in 2023.
Pharmaceutical companies, not including small pharmacies, will have to pay a 20 percent extra tax after medicines below 10 thousand HUF (EUR 25.52) and 28 percent after drugs above that threshold. The basis of the tax will be the producer price or the import price.
Telcos will pay after their net revenue. It will be 0 percent below 1 billion HUF (EUR 2.5 million), 1 percent between 1 and 50 billion HUF (EUR 2.5-127.5 million), and 3 percent between 50 and 100 billion HUF (EUR 127.5-244.1 million). The highest tax rate will concern companies having more than 100 billion HUF income: 7 percent.
Moreover, retailers and energy sector companies will also have to pay extra tax after their income.
Excise duties on tobacco products and alcohol, and the public health product tax concerning energy drinks, flavoured beers, salty snacks will also increase.
Furthermore, the company car tax will double.
As we reported before, the government aims to raise an annual 300 billion forints (EUR 765.4 million) from the banking sector, including 50 billion by expanding transactions duties, Márton Nagy, the minister for economic development, said after the April 3 elections. A total of 50 billion forints will be collected from insurers and 300 billion from energy sector companies, with a large chunk to be collected from Hungarian oil and gas company MOL, the minister said. The government will collect 60 billion forints from retailers, 40 billion from telcos, 30 billion from airlines, and 20 billion forints from pharmaceutical companies, not including small pharmacies, he added.
Nagy told Kossuth Rádió today that the new tax on banks, energy and trading companies and airlines, among others, would be temporary and targeted.