On 15 December 2021, the Hungarian Parliament adopted the tax changes for 2022 submitted on 23 November 2021. The amendments include mostly tax cuts: social contribution tax has been reduced even earlier and more drastically than planned in the spring, the vocational training contribution has been abolished earlier, small business tax has been reduced, and the maximum 1% local business tax for SMEs will stay with us too. The tax package for 2022 also includes several changes affecting VAT.
Firstly, the adopted law repeals the provisions relating to the tax authority offering draft VAT returns, which means companies will have to bid farewell for now to the introduction of the e-VAT system which has already been postponed several times.
The reverse charge on the supply of certain cereal and steel products and on the transfer of the marketable right (allowance) on greenhouse gas emissions has been extended in line with changes in EU law. This means that reverse charging will not be abolished in these sectors after 1 July 2022 either.
The adopted changes provide a tax exemption with regard to product imports, purchases of goods and services by the European Commission or an agency or body established under EU law which are necessary for the performance of the tasks assigned to these institutions, so as to respond to the coronavirus pandemic. For goods and services initially imported and purchased free of tax under the new rules, the tax will subsequently become due if the goods are not used for the intended purpose. The exemption applies retrospectively to transactions carried out after 31 December 2020.
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