There are very few changes in Hungary’s pending tax bill except that it makes tax evasion harder, was how PricewatehouseCoopers partner Gabriella Erdos summed up the bill for the media on Thursday.
There are no changes in either the income tax portion or the corporate tax portion of the law, she said. All new features are in a section on tax law implementation, focusing primarily on petty cash and on cash payment of bills. She noted that businesses will be required to pay significant bills – over 250,000 (about 1,000 euros) through bank transfers which must be backed by invoices.
Petty cash will also be in for greater scrutiny, with amounts allowed to be kept as petty cash limited to 1.2 percent of the total inflow from the previous fiscal year or 500,000 forints (about 2,000 euros), whichever is larger.
Businesses that do not provide invoices or receipts can expect heavy fines, she added.
Erdos noted that the government had included a passage in the bill aimed at encouraging households to demand receipts for repairs and services. Under certain circumstances households will be permitted to deduct 30 percent of these receipts – the tax is 20 percent – but the cap is 100,000 forints/year. In addition, the deduction is limited to people whose annual income is less than 3.4 million forints (about 13,000 euros).
Erdos applauded a change in the law on taxing vehicles used in business. The tax has been lowered significantly, but more people will be required to pay it, she said.
Unless parliament passes the bill by November 13, the new laws will not be able to go into effect on January 1, Erdos warned.