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Hungary: Proposed legislative changes, corporate and individual income tax

Hungary: Corporate and individual income tax

Draft tax legislation for next year (draft Law No. T/625) was submitted to Hungary's Parliament on 19 June 2018.


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Corporate income tax proposals

Measures in the draft law that would affect corporate income tax include:

  • Changes to the definition of “participation exemption” that would affect certain open-ended investment funds
  • Tax allowances for certain energy-efficient improvements
  • Tax deduction for childcare offered by employers at the workplace
  • An increase to the development reserve
  • Changes to research and development (R&D) rules
  • Rules concerning IFRS (accounting) treatment of tax depreciation of assets
  • Repeal of the tax on credit institutions (financial institutions) and a change to the threshold for application of the financial transactions tax
  • Changes to the taxation of insurance institutions

There are also proposals to revise the value added tax (VAT) rules in Hungary’s tax law.

Individual income tax proposals

Among the measures in draft Law No. T/625 are provisions that would make changes to the individual income tax law concerning:

  • The treatment of fringe benefits provided to employees
  • The definition of “permanent home”
  • The due date for filing income tax returns
  • The taxation of rental income
  • Social security and healthcare 


Read a June 2018 report [PDF 155 KB] prepared by the KPMG member firm in Hungary

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