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Hungary: tax changes for financial institutions

Hungary
05/08/2009
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Financial institutions are affected by tax changes adopted as part of the Government’s recent budgetary reforms, most of which came into force on 9 July 2009.

The key changes are:

  • from 2009 onwards, credit institutions with a negative tax base may carry forward the tax loss to reduce their pre-tax profits in subsequent tax years, subject to the generally applicable conditions
  • from 1 January 2010, individuals will be exempt from personal income tax and gift duty on any relief from debt given by a credit institution that saves them or their family from serious financial difficulties. Eligibility for the exemptions must be evidenced by a certificate from the credit institution
  • financial businesses are now also able to recognise, for corporate income tax purposes, the impairment of receivables relating to financial services and do not have to apply the thin capitalisation rules for debts from financial services
  • although the solidarity tax for companies will be abolished, credit institutions will still be liable to pay the 5% credit institutions’ contribution. Corporate income tax rates will also increase to 19%

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