According to napi.hu, 2017 brings along a lot of changes in law. Selective tax reductions are coming, wages are growing, fringe benefits are shrinking, and cigarette prices are increasing. Furthermore, CSOK can reach even more people. Pensioners can hope for a mid-year rise, the regulations of funerals will be changed and student loan will be as cheap as never before.
Cheaper food and restaurants
The VAT rate of poultry, milk and egg dropped to 5% from last year’s 27% on the 1st of January. The VAT of restaurant services and internet subscriptions dropped to 18%, while the added tax of restaurant services will be further reduced in 2018. The reductions are quite selective, for instance the cases of schools’ public catering or office canteens didn’t come up, even though children and employees consume food made on the spot.
Good news for families
The tax allowance of families with two children grew by 5 thousand forints/kid to 15 thousand forints. Nursery and kindergarten services will be tax-free, which means that neither the employee, nor the employers have to pay tax after the certified service.
Just married couples get a 5 thousand forints worth state wedding gift/month for 24 months, even in the case of birth, which means that they can resort to it along with the family allowance from the withholding tax. This law is of ex post facto effect, so it can be applied in marriages contracted after the 31st of December, 2014.
Cigarette prices rise further
Since Hungary has to reach the EU tax minimum in the case of tobacco products until the end of 2017, the next step is on the way. The tax of a thousand cigarettes used to be 15.7 thousand forints, but this will grow to 16.2 thousand. Navy cut consumer tobacco started from 14 thousand and it reached 16.2 thousand with the start of the new year.
Also, the retail price of tobacco-products’ tax stamp will be removed, so they can only be marketed under the prices published on the National Tax and Customs Administration’s website.
From the 1st of January, excise tax is also charged on e-cigarettes. The millilitre of the liquid is charged with 55 forints, the tax of single use products is 10 forints/piece, while their liquid is charged with 70 forints/millilitre.
Minimum wages to grow
On the track of a 15% rise, the minimum monthly wage is 127,500 forints, minimum weekly wage is 29,310 forints, minimum daily wage is 5,870 forints, while hourly wages are 733 forints form the 1st of January. And the minimum wage of employees with at least secondary qualification is 161 thousand monthly, 37,020 weekly, 7,410 daily and 926 forints hourly.
Mayors to earn more
The income of settlement leaders will be adjusted to State Secretaries’ basic salary (which is gross 997.2 thousand forints/month currently). So the income of the mayor of a settlement with less than 500 habitants will be the 30% of a State Secretary’s, 40% up to 1500 habitants, 50% up to 2000 habitants, 55% up to 5000 habitants, 60% up to 10,000 habitants, 70% up to 30,000 habitants and 80% in the case of an even bigger population. The general assembly presidents of county municipalities are entitled to the 90% of the basic salary.
Cafeteria to further narrow
Even though 100 thousand forints worth cash can be given as part of the cafeteria with preferential taxation, experts predict the rollback of fringe benefits as the regulation will be more severe and the tax rate will eventually grow. Several cafeteria elements have been taken out of the preferential circle. Employers may allocate 100 thousand forints to public-sphere employees and 350 thousand forints to private-sphere workers.
The mobility of labour force is motivated by the increase of car travel allowance from 9 forints to 150 forints/kilometre. The performance and maintenance of workers’ accommodation will be evaluated preferentially in the case of corporation tax as well.
Being an entrepreneur is even better
The government trusts the reduction of corporation tax to 9% on flat rate. The social contribution tax also decreases from 27% to 22% this year. The small business tax decreases from 16% to 14%, while the income margin rate of itemised tax will grow to 12 million from 6 million.
Many things will change in connection with corporation tax, mainly the rules of investment encouragement. Thus, the conditions of development tax allowance are changing, enterprises investing in startup companies are getting allowance, while castle and energy efficiency investments are getting a gallant rateable values discount.
The flexibility of dividend payment is further narrowed: the dividend will stay at the parent enterprise for one year, which is probably not an ideal solution concerning accounting and finance.
Tax evasion: new let-outs are closed
From the 1st of January, bills sent out to inland tax entities must include the tax number of the buyer if the shifted tax reaches or exceeds 100 thousand forints. By the operative regulations, this margin rate is 1 million forints.
Online cash registers are spread further: mechanics, taxi drivers, exchange centres, plastic surgeons, fitness centres, dance halls, discos, laundries, saunas, solariums and massage saloons all have to operate online cash registers.
What about pensions?
Officially pensions and – among others – orphan support, official dues, widow allowance, employment and support allowance, casualty allowance, rehabilitative support and the personal allowance of the blind will grow by 1.6%. However, it seems like pension premium will have to be paid from next September, because the rate of economic growth will exceed 3.5%.
The age of retirement is also increased by six months, so employers can only retire at the age of 63 and a half.
CSOK will come easier
The rules of the government’s housing subsidy scheme are slackening. For instance, it can be requested for estates marketed from the designing table. In case of homes in undivided common property, families don’t even have to wait till the construction of the estate is finished. The subsidy scheme can also be requested for apartments built on undivided common properties.
25 institutions to be abolished or transformed
Bureaucracy reduction is on its way. The National Health Insurance Fund was renamed and its assignee is the Ministry of Human Resources in case of operational tasks, while its assignee is the Central Administration of National Pension Insurance in case of other regions of activity (sick pay, travel allowance etc.).
A further dozen institutions will be abolished or transformed. This way the Central Office for Administrative and Electronic Public Services will be abolished by a fusion, its general assignee is the Ministry of Interior. Budapest’s Government Department gets the citizenships rage of activities from the Immigration and Asylum Office, while the National Office for Rehabilitation and Social Affairs will be abolished, its assignee is the Budapest Government Department.
Change in financial conciliation
Financial institutions have to subject to the regulation of the Hungarian Financial Arbitration Board up to 1 million forints worth case value if they can’t agree with a client. Local district-courts can judge in the case of legal battles.
Moreover, call loans dropped by financial service providers are personal income tax-free for private individuals from the 1st of January.
The interest of student loan on a surprising level
The interest of student loans continues to decrease in 2017 because the Student Loan Centre limited the interest of the free usage loan type 1 at 3.35 %. This is the lowest the interest has ever been. The interest of the limited usage loan type 2 is still 2% due to the state support.
Change in the rules of funerals
From now on, a coffin burial can be requested beyond 15 days with the necessary conditions and permissions. In case of a coffin burial, the deceased has to be buried in 96 hours from the engrossment of the death certificate, or in 15 days’ time if the cooling of the cadaver is possible. This time can be extended with the necessary permission from the district office responsible for the public health scope of duty. The permission is valid for maximum 45 days after the engrossment of the death certificate.
The Happy Birthday song is public property
Just like in the European Union, an intellectual work becomes public property 70 years after the death of the writer in Hungary, so the works of authors deceased in 1946 belong to this category from 2017 on. This is how the ultimate birthday song, Happy Birthday, or the work of writer H. G. Wells and László Moholy-Nagy became public properties.
The tough life of drones
The strict drone law has been entered into effect, which means that all flying gadgets have to be registered at the authorities, the taking out of liability insurance is obligatory, and the control over some of them is bound to a training course. However, some kind of easement is on its way.
Copy editor: bm