Autumn tax package – Tax benefits may continue to grow

The autumn tax package was submitted to the Hungarian Parliament on 12 November 2019. The new legislative proposal recommends to combine four types of contributions – i.e. the pension contribution, in kind and financial health insurance contributions and social contribution – into one single social security contribution. As a result, from 1 July 2020 the new unified contribution would be 18.5%, which is overall the same amount. The new proposal ensures that primary producers and those in agency relationships will also be eligible for labour market benefits. This fusion of contributions will also change the share of each social security fund. Until now, it has been clear that the pension contribution is the revenue of the Pension Insurance Fund, while and the health insurance contribution is the revenue of the Health Insurance Fund. After the fusion, the tax authority will transfer 54% of the contribution to the Pension Fund, 37.9% to the Health Insurance Fund, and the remaining 8.1% to the National Employment Fund.

Another important element of the tax package is to allow for trusts and private foundations to open permanent investment accounts (PIA) for the purpose of distributing the assets to the individual beneficiary. In this context, the financial assets received by the individual will not be categorized as an income if he/she obtains the profit derived from PIA. Furthermore, the proposal extends the scope of property acquisition stamp duty allowances to private foundations, thus unifying the levy exemptions of the trust and the private foundations.

Newsletter

Archives

MEMBERSHIPS

inla logointernationabar assocoation logoAmcham Logo

AWARDS

Chamber LogoLegal 500 Logo 2015emea leading firm logo 2016Legal500 emea_leading_firm_2017emea_leading_firm_2018MND-3667-AwardGraphic