Climate change taxation reforms and incentives in Hungary

Yes.

Yes, when any energy products are offered for sale, sold or used as motor fuel, as an additive or extender in motor fuels or as heating fuel, they are subject to excise duty at the rate applicable for the specific type of use (Act LXVIII of 2016 7. §; 108. §-).

Motor Vehicle Registration Duty is charged on passenger cars and motor homes and on motorcycles before they can be registered and placed into service in the territory of Hungary, and also in connection with the rental of a passenger car to a resident person by a motor vehicle fleet operator (Act CX of 2003).

Motor Vehicle Tax is charged on any motor vehicle, trailer and lorry registered in Hungary or registered abroad but operated in Hungary. Furthermore, Company Car Tax is charged on cars that are not exclusively for private use (Act LXXXII of 1991).

1. Environmental Pollution Charges include Air Pollution Duty, Water Pollution Duty and Soil Pollution Duty and are payable based on all units of emission of the pollutants by any polluter (Act LXXXIX of 2003).
2. Environmental Product Levy is charged on several product categories (e.g. batteries, plastic items, car tyres, electrical goods etc) because these are considered as potentially damaging to the environment. Conversely, solar panels are also subject to the environmental product levy (Act LXXXV of 2011).

Mining Allowance is payable on mined mineral and geothermal energy (Act XLVIII of 1993).

No.

The Act governing Corporate Tax in Hungary provides tax credits based on environmental reasons (Act LXXXI of 1996):

1. Tax allowance is granted for independent environmental projects with an investment value of at least HUF 100m. Taxpayers may reduce their corporate income tax liability by 80% through this tax credit.
2. Taxpayers are eligible for a tax allowance in connection with an investment the aim of which is to comply with energy efficiency targets. Taxpayers may reduce their corporate income tax liability by a further 70% (after taking into account certain other types of tax allowances, including those in point 1 above).
3. The cost of an electric recharging point may be deducted from the pre-tax profit.

Various subsidies are available from time to time to certain investments by the general public or companies that aim to support environmentally-friendly investments, such as insulation of houses, change of windows, purchase of more energy efficient household devices (washing machines, fridges etc) or the installation of small size photovoltaic projects. The conditions for these subsidies change from time to time and they are only available in certain dedicated time slots.

No. The Hungarian government is not a great supporter of climate change initiatives; they do not really approve of the theory that climate change is caused by human intervention.

N/A