The Minister of State highlighted objectives proposed by the bill: for example, in 2017, 3.5-3.8 million personal income tax declarations are projected to be made by the National Tax and Customs Administration (NAV), while the most significant change for enterprises may be a recommendation to categorize taxpaying enterprises and provide several incentives for “good taxpayers.”

For the year 2016, tax declarations will be made by NAV and thus 3.5-3.8 million people will be exempted from filing tax declarations, he pointed out. Private persons who earn their income from only one employer will receive a draft personal income tax declaration and they can either approve it or send it back modified, even electronically.

Speaking about the proposed amendments of the details of corporate taxation, the Minister of State said that NAV will categorize enterprises after the first quarter of 2016, and “good taxpayers” will be offered several bonuses. Enterprises will be classified as either trustworthy, average or risky. Enterprises which have been operating for at least three years and have not had a tax difference exceeding 3 percent of payable tax or tax arrears exceeding HUF 500 thousand qualify as “trustworthy”. Among the advantages these enterprises will be entitled to the Minister of State mentioned that the duration of tax inspection will be maximized at 180 days and a tighter deadline will be set for VAT reclaims (instead of 75 days it cannot last longer than 45 days as of 1 January 2017, and 30 days as of 2018).

It is also among the proposed changes that the owners of environmentally friendly cars will be exempted from paying car registration fee, title transfer fee, motor vehicle tax and company car tax, András Tállai said.

The bill will also have an effect on road hauliers, as they can also receive several bonuses. They will be entitled, for example, to deduct from the local business tax e-toll fees paid for the usage of motorways abroad and 7.5 percent of road tolls charged for the utilization of domestic motorways.

András Tállai added that the distillation of home-made pálinka remains tax-free. However, the European Union expects the introduction of a “distillation tax seal”, which costs HUF 700 for every litre of 42-degree pálinka. Of these, at least five and maximum 86 can be purchased. They are to be controlled by the tax offices of local governments.

With these amendments, however, the overhaul of the tax regime is not over yet, he stressed. The structure and the management model of NAV are also to be modified: the tax authority will become a two-level instead of the current three-level organization, as some regional offices will be closed. The bill is scheduled to be submitted to parliament in November.

Source: Ministry for National Economy

Photo: Gergely Botár