Page 6 - 20140114_PS-Newsletter_On-Changes-of-Taxation

PS Newslett er

14 January 2014

taxable person not established in Hungary may be Repayment of debt denominated in a foreign
represented by a foreign private individual, legal person currency
or other organisation in front of the Tax Office. Deferred exchange losses arising from the one off repay-
VIII Green tax ment of loans or bonds denominated in foreign currency
before their due date but not later than 31 December
st
Green tax warehouse 2014 will be allowed to be accounted for in instalments
over 3 years.
The amendments will introduce the concept of green tax The rule can also be applied for debts paid off in the
warehouses from 1 July 2014. Within such warehous-
st
es goods will be allowed to be manufactured, received financial year of 2013.
and stored without the payment of green tax. The ware- Consolidated annual report
houses can be operated for 5 years under the licence The benchmarks set for consolidation requirements has
of the Customs Office. This period will be possible to be been elevated considerably in terms of both balance
extended by an additional 5 years.
sheet total and net revenues.
Other changes Parent companies will not be required to draw consoli-
Record keeping obligations prescribed for reusable dated reports provided two of the three indices do not
packaging materials will be changed. Furthermore, in exceed the limits indicated below:
addition to the currently existing reusable packaging sys- 1. balance sheet total of HUF 5,400 million,
tem – granting exemption of the environmental fee obli- 2. annual net sales of HUF 8,000 million,
gation – a new rental system will be introduced, which
will be available only under the licence of the Environ- 3. the average number of employees of 250.
mental Protection Authority. In addition, recorded return- According to a 2011 amendment effective from 2014 the
able pallets will not incur green tax liability provided they audit of books shall not be compulsory for companies
are used as reusable packaging within 365 days of their with annualized net sales under HUF 300 million on the
procurement. average of the two financial years preceding the finan-
cial year under review (this threshold is currently set at
IX Special tax of financial HUF 200 million). The other condition relating to staffing
institutions (the number of employees shall not exceed 50) remains
unchanged.
The effect of special tax of financial institutions, cred-
it institutions and credit institutions’ contribution will be Accounting treatment of transfer pricing
extended also for 2014. The tax base for the special tax adjustment
of financial institutions is to be determined on the basis A modification implemented on 30 June 2013 will allow
th
of the 2009 annual report as before. intercompany entities to capture transfer pricing adjust-
The Act introduces a one-off special tax called credit ments – provided these adjustment are actually settled
institutions’ contribution: credit institutions will be com- – in the accounting records instead of the tax return.
pelled to pay corporate income tax on the revenues The corrections should directly adjust the original account-
resulting from the cancellation of previous years’ risk ing entry, sharing the same accounting treatment. As a
provision even if losses would otherwise allow for an off- result, the transaction will be recorded at arm’s length
set of such revenues. price in the books as sales revenue, acquisition value
The definition of the financial enterprise also changes. or material cost. No other revenue and expense will be
From 1 January 2014 financial institutions established incurred unlike in the case of other schemes based on
st
for the sole purpose of carrying out group financing shall subsequent credit and discount methods.
not be considered as financial enterprises, therefore As the regulation basically provides for an alternative for
they will not be subject to the law. conventional tax base transfer price adjustments, the

X Accounting rules corresponding entries can be backed up with any adequate
documentation satisfying the general formal and content
requirements prescribed for accounting documents.
Bookkeeping in foreign currency, conversion
rules XI Other

From 2014 the books will be permitted to be kept and
annual reports to be presented also in USD. Energy taxes
The official exchange rates declared by European Cen- From 2014 taxpayers will be allowed to exercise the right
tral Bank will also be applicable for the conversion of for- to reclaim in any tax period within limitation without self
eign currency transactions. revision.

On changes Of taxatiOn 6