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Developments in the Member States

Part II

calculated for the surtax on financial institutions. The surtax on pre-tax profit is deductable from the surtax on
balance sheet, but the calculated difference can not be a negative amount. The rates of this surtax will be halved in


On 4 December 2010 a sector specific surtax came into force which retroactively covered 2010 and will be phased
out on 31 December 2012. Retail trading, telecommunication and energy supplier activities are subject to it. The
tax is 0.3 % and 1.05 % of the taxable turnover up to and over HUF 5 billion ( 16 million) respectively for energy
supply activities. Different progressive rates are applied for retail traders with a maximum rate of 2.5 % (over
HUF 100 billion ( 320 million) taxable turnover) and telecommunication activities with a maximum rate of 6.5 %
(over HUF 5 billion ( 16 million) taxable turnover).
The standard VAT rate was increased from 20 % to 25 % in July 2009 and to 27 % in 2012 while milk, milk
products, bread, bakery products, and accommodation services became subject to a reduced 18 % rate. VAT rate
on district heating services was first cut to 18 % on 1 August 2009, and on 15 January 2010 it was set to 5 %. This
preferential reduced rate of 5 % applies also to a few other products such as specific medicines and medical
materials, books, newspapers, etc. In accordance with Council Directive 2008/8/EC the place of supply of services
to taxable persons was changed on 1 January 2010.
In 2009 and 2010 the excise duties on tobacco, alcohol and fuel were increased and as a second step, from 1
January 2010 an additional increase in excise duties took place. With a further increase in 2011 the excise duties
for tobacco products are in line with the corresponding Council Directive 2008/118/EC. Excise duties on alcohol,
fuel and tobacco (the latter in two steps, in February and in July) was further raised in 2012.
Other taxes
From 1 January 2009 a new tax is to be levied on energy suppliers the Special Energy Tax. The tax base is the
pre-tax profit subject to certain tax base adjusting items.
A company car tax was introduced in 2009 at HUF 7 000 ( 23) per month per car below 1 600 cm3 and
HUF 15 000 ( 49) for cars over 1 600 cm3. This tax was increased in 2012; the tax due is determined by the car's
performance and environmental properties and varies between HUF 7 700 and 44 000 ( 25-142) per month.
Municipalities may levy a real estate tax on building and land; however, most of them apply a rate significantly
lower than the maximum and exempt housing real estate. 0.3 % of the GDP is collected by municipalities in the
form of property and communal taxes but the real estate tax revenue raised on the first residence of individuals
amounts to only about 2,5 % of this total. Taxes on the transfer of real estate and other valuable property amount to
0.6 % of GDP. A tax on valuable property was introduced in 2010 but its real estate section was swiftly set aside
by the Constitutional Court and the rest revoked by Parliament later that year.
Social contributions
In 2012 employers' contributions amount to 28.5% and consist of a training contribution (1.5 %), a pension
contribution, a health insurance contribution and contribution to the unemployment fund. The latter three amount
to 27 % and are collectively renamed 'social contribution tax' as from 2012. Employees' contribution is composed
by a 10 % pension contribution (whose base is capped at HUF 7.94 million ( 25 700) yearly), a 7 % health care
contribution (up by one percentage point compared to 2011) and a 1.5 % unemployment fund contribution.
A tax credit equal to 20 % of payments to voluntary funds or pension savings accounts is provided, up to
HUF 100 000 ( 320) a year.

Taxation trends in the European Union