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Hungary Implementing Taxes on Extra Profits of Financial Institutions, Energy Companies, Retailers, and Others — Orbitax Tax News & Alerts

The Hungarian government has established temporary windfall taxes on extra profits through Government Decree 197/2022 (VI. 4.), which was published in the Official Gazette on 4 June 2022 and enters into force on 1 July 2022. The taxes are implemented in different ways for different company types. Some of the main taxes include the following:

  • Financial institutions - a surtax equal to 10% in 2022 and 8% in 2023 on the annual net revenue of the preceding year;
  • Petroleum product producers - a special tax at a rate of 25% on the difference between the price of oil purchased from Russia and the international market price (Brent crude) per month;
  • Energy (electricity) companies - a special tax of 65% on the amount to be established by the Hungarian Energy and Utilities Regulatory Office reduced by a mandatory acquisition price or a subsidized price applicable for the current year;
  • Airlines - a departure fee of HUF 3,900 per passenger flying to Albania, Andorra, Bosnia and Herzegovina, North Macedonia, Iceland, Kosovo, Lichtenstein, Moldova, Monaco, Montenegro, United Kingdom, Norway, San Marino, Switzerland, Serbia, Ukraine, or the European Union, otherwise, a fee of HUF 9,750 per passenger.
  • Pharmaceutical distributors - a 20% tax on the difference between the consumer price and the producer price or import price of products with a consumer price of up to HUF 10,000, and a 28% tax on the difference for products with a consumer price exceeding HUF 10,000;
  • Telecommunication companies - a surcharge on net turnover at progressive rates:
    • up to HUF 1 billion - 0%
    • over HUF 1 billion up to 50 billion - 1%
    • over HUF 50 billion up to 100 billion - 3%
    • over HUF 100 billion - 7%
  • Insurance companies - a progressive surcharge on insurance premiums from 2% to 14% in 2022 and from 1% to 7% in 2023;
  • Retailers - a one-off surcharge equal to 80% of the retail sales tax due for 2022 (i.e., 180% total retail sales tax), and a progressive tax on annual turnover in 2023:
    • up to HUF 500 million - 0%
    • over HUF 500 million up to HUF 30 billion - 0.15%
    • over HUF 30 billion up to 100 billion - 1.0%
    • over HUF 100 billion - 4.1%

Government Decree 197/2022 also includes several other measures for investment businesses and the commodity exchange providers, mining companies, motor vehicle taxes, excise taxes, and others.