Hungary publishes GloBE laws in the official gazette


On 21 November 2023, the Hungarian Parliament passed the legislation on BEPS 2.0 Pillar Two-global minimum tax (GloBE) rules. The president signed the law on 24 November 2023, and it was subsequently published in the Official Gazette on 30 November 2023 as a Gazette No. 171 of 30 November 2023.

On 17 October 2023, Hungary’s Ministry of Finance initiated a public consultation process regarding a draft law for implementing the corporate minimum tax under Pillar 2. The bill was presented to parliament on 31 October 2023.

One of the primary measures is implementing a defensive effort to prevent double non-taxation, which mentions that interest and royalty payments made to non-cooperative or low/no tax jurisdictions won’t be deductible for getting a tax advantage unless the payment is based on legitimate economic and commercial reasons.
Additionally, taxpayers are required to provide the following information for filing their annual tax return within the deadline. The filings should include detailed information on each cost and expenditure.

• The name, registered office, and tax number (or company register number) of the foreign person or establishment
• Information on the contract underlying the cost and expenditure
• The purpose of the underlying cost and expenditure
• The quantification of the actual economic benefits and tax benefits
• The amount of interest and royalties for which the foreign person or establishment has paid tax corresponding to the corporate tax and certification of payment.

Another significant measure is an extension of the suspension of the effective advertising tax. This is provided by maintaining a 0% tax rate and suspending certain invoice/receipt and declaration obligations.

The suspension was previously extended to 31 December 2023. However, the Law LXXXIII extends the suspension to 31 December 2024.

Law LXXXIII also includes amendments regarding the progressive retail turnover tax rates as follows:

• up to HUF 500 million – 0%
• over HUF 500 million up to HUF 30 billion – 0.1%
• over HUF 30 billion up to 100 billion – 0.4%
• over HUF 100 billion – 2.7%

Law LXXXIV of 2023 also implements the Pillar 2 global minimum tax (GloBE) rules as per Council Directive (EU) 2022/2523 of 14 December 2022. The law also introduces an R&D tax credit as a refundable tax credit under the GLoBE rules.



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