Hungary: mid-year tax changes

Some important tax changes have been introduced in the mid-year tax package apart from the much publicised bank levy and the 10% corporate income tax rate.

These include:

• A transfer tax exemption for the transfer of shares in a real estate holding company between related parties (since 1 January 2010, the acquisition of a real estate holding company has triggered a transfer tax liability)
• Gifts and inheritance between lineal descendants and antecedents are now free from transfer tax
• The abolition from 2011 of the communal tax on entrepreneurs and the water-management contribution, to reduce their administrative burden
• The repeal of the luxury tax on high value assets (e.g. luxury cars, ships, aircrafts)
• Simplified rules enabling the tax-free employment of household workers (e.g. cleaning workers, baby-sitters, gardeners) by individuals from 15 August 2010 if they report the employment electronically or by phone and pay a monthly registration fee of only HUF 1,000 (c. € 4)