Hungary: MOF introduces draft legislation on BEPS 2.0 pillar two to parliament


On 31 October 2023, the Hungarian Ministry of Finance presented the draft legislation to the parliament regarding the implementation of  EU Directive 2022/2523 on the global minimum tax.

As previously reported, the Ministry of Finance released the draft legislation for public consultation on 18 October 2023.

The draft legislation includes:

  • An Income Inclusion Rule (IIR) and a Qualified Domestic Minimum Top-up Tax (QDMTT) will be introduced from 1 January 2024;
  • An Undertaxed Profits Rule (UTPR) will be effective from 1 January 2025;
  • A transitional Country-by-Country Reporting (CBcR) Safe Harbor and QDMTT Safe Harbor will be introduced;
  • Covered taxes will include corporate income tax, local business tax, innovation contribution, and energy suppliers’ tax;
  • A Substance-Based Income Exclusion will be implemented;
  • A deferred taxation/tax accounting concept will go into effect for Pillar Two purposes;
  • A new refundable R&D tax credit incentive will be introduced.

Hungary has decided to maintain its holding regime with a total exemption for dividends and capital gains until 24 February 2024. Furthermore, there will be no domestic withholding taxes and corporate payments from Hungarian entities to foreign companies.



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