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Hungary – Changes in Income Tax and Social Security Legislation

Changes in Income Tax

Background

The Hungarian Government has presented to Parliament changes to the income tax and social security contribution acts. Some of the proposed changes have already been adopted for 2011.

From 1 January 2011, the social security procedural rules on registering, filing, making payments and reporting obligations for foreign employers and employees liable to Hungarian social security charges will change. It is anticipated that the changes will have a significant effect no foreign companies and their employees working in Hungary.

A tax return extension procedure is also being implemented where returns are filed after the deadline for reasons outside of their control.

Other proposed changes include the implementation of a 16% flat rate tax rate applicable to income in the comprehensive tax base (e.g. employment income) and private income. There are also proposed changes to family allowances, the taxation of non cash benefits and reforms to social security contributions. The proposed changes will have a significant impact on how assignment related benefits are taxed and the compliance requirements in terms of social security.

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Download  Hungary – Additional Changes in the Hungarian Social Security and Tax Administrative Rules as of 2011 (PDF)
Download  Hungary – Important Changes in Personal Income Tax and Social Security Legislation (PDF)

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