Tax Alert

Tax Alert

Details on the new retail tax and surtax on credit institutions aiming to access Funds in support of the Action plan for Economic Safety


As indicated previously, in order to access government funding of economic measures taken in the current epidemic situation, it was announced that new surtaxes would be levied on the retail sector and on credit institutions.

New retail tax

Details of this new retail tax have been published in Governmental Decree 109/2020. (IV. 14.) (“Decree”) on 14 April 2020. Measures of the Decree will come into force on 1 May 2020.

The new retail tax shows substantial similarities to the provisions of the so called “crisis tax” effective in 2010-2012, although in some aspects it is even more extensive, as beyond applying to domestic retailers, it is also applicable to foreign retailers under certain circumstances.

According to the Decree, the following activities trigger tax liability:

  • Retail sale of motor vehicles and motorcycles, parts and accessories (TEÁOR 45.1, 45.32, 45.40 with exceptions)
  • Any other retail sale, including sales in non-specialised shops, via stalls and markets, via mail order houses or via the Internet (TEÁOR 47.1-47.9)

Foreign persons and entities which do not have a Hungarian branch office also become liable for the tax in relation to the goods sold to their customers through a delivery point located in Hungary. 

The basis of the retail tax is the net sales revenue deriving from the taxable activities, or, in case of foreign taxpayers, the net sales price increased by the income deriving from services provided by the taxpayer to the supplier of the goods sold, or the discount provided by such suppliers.

The rate of the retail tax increases progressively:

  • 0% up to a tax base of HUF 500 million
  • 0.1% to a tax base between HUF 500 million and 30 billion
  • 0.4% to a tax base between HUF 30 – 100 billion
  • 2.5% to a tax base exceeding HUF 100 billion

Related parties as defined by the Act on CIT should calculate their retail tax liabilities jointly as a group, provided that the related party status exists as a result of a legal transformation (demerger, spin-off) completed after the effective date of the Decree, or in case the taxpayer transfers or leases its assets necessary for the retail activity to a related party thereof. Group taxation does not apply if the parties can prove that the above transactions have been carried out for pure economic reasons and not with the aim of avoiding taxation.

Taxpayers are liable to declare and pay a tax advance by 31 May 2020, and, thereafter, pay advances in each month of the state of emergency period by the last day of the given month. The amount of the advance is calculated as 1/12th of the annual tax base determined on the basis of the organization's latest available Annual Report, or, in absence thereof, its estimated annual tax base of the current year.

The monthly advance may be proportionally reduced upon the separate request of the taxpayer filed with the tax authority, in case the monthly taxable income does not reach at least 60% of the taxable income realized in the same month of the previous year.

Annual tax liability for the tax year including 1 May 2020 is to be determined on the basis of the annual taxable income realized in the tax year, whereas the tax on that basis is to be calculated pro-rata according to the number of days falling within the state of emergency period as from 1 May 2020. The year-end tax return is to be filed within 30 days following either the end of the state of emergency period, or the financial year-end—whichever occurs first.

Surtax on credit institutions

Details of this surtax have been published in Governmental Decree 108/2020. (IV. 14.) on 14 April 2020. Measures of the Decree will come into force on 1 May 2020.

Based on this decree, due to the pandemic  credit institutions are obliged to pay surtax in the 2020 tax year. They are required to declare the amount of the surtax on a separate form by 10 June 2020 and to settle it in equal instalments by 10 June, 10 September and 10 December.

The base of the surtax is the part exceeding HUF 50 billion of the adjusted balance sheet total, which is based on the data of the annual report for the second tax year preceding the given tax year. The tax rate is 0.19%.

Moreover, taxpayers can choose the option to reduce their computed tax liability by a portion of the amount paid as team sport subsidies (determined by the CIT Act) which has not yet been used as a base of tax allowance for corporate income tax purposes (the reduction must not exceed 50% of the extraordinary surtax liability).

Based on a press release from the Ministry of Finance, an amendment to the Surtax Act could be forthcoming which would allow credit institutions to deduct the amount of this surtax from their usual surtax on financial institutions in equal instalments over the five tax years that follow.


© 2024 KPMG Hungária Kft./ KPMG Tanácsadó Kft. / KPMG Legal Tóásó Ügyvédi Iroda / KPMG Global Services Hungary Kft., a magyar jog alapján bejegyzett korlátolt felelősségű társaság, és egyben a KPMG International Limited („KPMG International”) angol „private company limited by guarantee” társasághoz kapcsolódó független tagtársaságokból álló KPMG globális szervezet tagtársasága. Minden jog fenntartva.

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