Regulation changes during the summer

In our previous posts we informed you about the amendments of the tax regulation due to the end of the state of emergency. In our current one we would like to draw your attention to the further summer tax law amendments. In the first part we concentrate about the relevant measures of the tax package adopted on 14 July, in the second part the changes of the Act on Duties are described.

EKAER

In order to comply with the EU law, the rules of EKAER has been amended. The most important change is that there will be reporting obligation only in terms of the road transportation of risky products which value or weight exceeds certain limits as of 1 January 2021. The law describes the definition of product unit and the rules in connection with the imposition of default penalty has been specified. As for the further detailed rules we will inform you in a separate newsletter after the EKAER decree has been published.

Reduced VAT rate in case of construction of new homes in brownfield areas

Under the conditions laid down in separate legislation the government may designate brownfield action areas by decree. Regarding sale of new apartments with a total useful floor area under 150 square meters developed in a multi-apartment residential property constructed on the brownfield area the applicable VAT rate is 5%. The reduced VAT rate may be applied first in terms of transactions where the date on which the VAT becomes chargeable follows 21 June 2020.

Online cash-registers

Taxpayers required to operate online cash-registers will be obliged to provide their customers with electronic payment option starting with 1 January 2021.

Small taxpayers itemized lumpsum tax (KATA)

As of 1 January 2021, a private individual may be a small taxpayer only in connection with one legal relationship, the tax authority will delete the registrations regarding the legal relationships other than the first one.

If a small taxpayer receives income from an affiliated party, the income will be subject to a 40% surtax. Furthermore, even if the income is received from a non-affiliated party, also the 40% tax-rate is applicable if the cumulated income from the same partner reaches HUF 3 million annually. The tax is paid by the payer unless it is provided by a foreign payer (in this latter case the small taxpayer will be obliged to pay the amount of the tax). The income subject to surtax should be disregarded when calculating the annual KATA threshold of HUF 12 million, however, the payment of the surtax does not exempt the small taxpayer from the itemized, monthly tax payment obligation.

Additionally, the administrative burdens will be tightened. Small taxpayers will be obliged to inform the payer contracting with them in written form on their small taxpayer status (in terms of contracts concluded in 2020 or earlier the deadline is 15 January 2021) and any subsequent changes in their status. The payer is obliged to inform the small taxpayer by 31 January of the following year about the annual amount taken into account when determining the 40% surtax.

Inheritance and gift duty

In order to extend the duty exempt asset transfer between family members the amendment of Act on Duties exempted inheritance and gifts between siblings as of 8 July 2020. Within the interpretation of the amendment rule sibling means a person with at least one parent (adoptive parent) being the same as the parent (adoptive parent) of the testator, donor. Such acquisition of property does not have to be reported to the tax authority.