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Tax Connect Flash | Hungary: Proposals for special bank levy and 10% corporation tax

08/07/2010

A special levy on banks and a new 10% corporation tax rate were among the key changes to the tax system contained in the new government’ first comprehensive tax bill outlined on 2 July 2010.


The proposed bank levy involves additional taxation for:
• banks, of 0.45% of their total asset value 
• insurance companies, of 5.2% of their total insurance premiums due 
• other financial institutions, of different rates and tax bases depending on the type of business

The levy will be based on the most recent (2009) financial statements and must be declared by 10 September 2010. It is payable in two instalments, on 10 September and 10 December 2010.

The new 10% rate of corporation tax will apply to all corporate taxpayers on the first HUF 500 million (€1.7 million) of their annual pre-tax profits. The previous 19% rate will continue to apply to pre-tax profits above this threshold. Around 99% of all Hungarian businesses would only be liable to pay tax at the 10% rate, which is among the lowest in Europe.

The proposals are not expected to undergo significant changes, given the government’s two-thirds majority in Parliament. Further details will be provided once the bill is adopted.


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