The tax breaks of the coronavirus crisis could save businesses about four hundred billion forints in taxes this year, and favorable tax measures will also safeguard jobs, said Norbert Izer, Secretary of State for Taxation at the Joint Venture Association’s online Tax Conference.
During the period of mandatory closure for thirty days due to the control of the epidemic, the government will help the hospitality and leisure sector with a total of HUF 7 billion in tax relief, the Secretary of State added.
Businesses in the hospitality and leisure sectors were exempted by the government from paying employer taxes in November. The Ministry of Finance estimates that the tax relief will affect almost 15,000 businesses and about 100,000 employees. The measure, in addition to saving businesses a public burden of HUF 5 billion, will also ensure that the work of those who work there is maintained and paid in November, Norbert Izer concluded. He emphasized that the benefit of the rebate was also extremely simple: those concerned only had to tick the boxes provided for this purpose in the November tax return. Businesses still have two weeks to file, as the returns must be sent electronically to the tax office by 12 December, the secretary of state noted.
For the transitional period during which restaurants are closed, the government has reduced VAT on food delivered from 27 percent to five percent, Norbert Izer recalled. He added that the targeted VAT reduction could leave about two billion forints for caterers in total.
The Secretary of State recalled that the government introduced a number of tax breaks in the spring. He started the list with a two percentage point reduction in the social contribution tax. As he said: in view of the epidemic situation, the tax rate has been reduced to 15.5 percent from 1 July, and the reduction will leave HUF 160 billion to employers by the end of this year.
In connection with the spring tax measures, Norbert Izer also mentioned the waiver of the four-month tax and contribution for entrepreneurs in the sectors most exposed to the crisis caused by the coronavirus epidemic (such as tourism, hospitality, agriculture) and for catastrophes (itemized tax for small businesses). In total, the tax benefits helped to keep the work and business of more than 360 thousand people.
The tourism sector, which is most exposed to the coronavirus epidemic, has also been helped by a number of tax measures, said Izer Norbert. The public burden of the Széchenyi Pihenő Card (Szép card) has been reduced by less than half (to 15 percent), while the amount that can be transferred to the card has doubled. In the autumn, the National Assembly decided to continue the tax cut on the Szép Card until June 30, 2021, the Secretary of State emphasized, adding that next year it will leave a total of HUF 35 billion for those affected.
Tax cuts will continue, the Secretary of State underlined. Even this year, the most complicated – and at the end of the year – significant financial burden – administrative obligation of enterprises will be abolished. Last year, we no longer had to top up the corporate tax, and this year the top-up will also end in the local business tax. Thus, companies can continue to manage HUF 80-85 billion for five months, he recalled.
2021 will bring less tax burdens and less administration in taxation, Norbert Izer said. Highlighting the key changes, the Secretary of State said businesses could count on one of the government’s most significant tax assistance from July 2021. The tax office can prepare a draft VAT return for half a million businesses. The rate of the small business tax (kiva) will decrease (from 12 percent) to 11 percent, and the revenue threshold will increase from the current one to three billion forints, and the exit threshold from three to six billion forints. The VAT rate on new home sales will be reduced by 22 percentage points to 5 percent. With the exception of the issuance of certain documents, from 2021, first-instance administrative procedures will be duty-free, making the administration of one and a half million public administration cases free of charge each year.