Coronavirus – Hungarian government issues tax relief decree

Hungary’s government has issued a decree on tax relief which will leave over 200 billion forints (EUR 564.7m) with businesses and households, the finance ministry said late on Tuesday.

The decree was issued under a state of emergency declared to contain the spread of the novel coronavirus.

The decree lowers the payroll tax rate by two percentage points to 15.5 percent from July, saving companies 160 billion forints in the second half of the year, the finance ministry said in a statement.

The reduction is part of an agreement reached late in 2016 between the government, employers and unions pairing minimum wage rises with payroll tax cuts.

The rate of the Small Business Tax (KIVA) is being reduced from 12 percent to 11 percent from next year, a measure expected to save some 51,000 businesses a combined 10 billion forints, the ministry said.

Spring deadlines for filing annual reports as well as tax returns for corporate tax, KIVA and Local Business Tax (HIPA) have been pushed back to September 30 for some 600,000 companies.