background image

Hungary Amends Temporary Windfall Taxes on Extra Profits of Financial Institutions, Petroleum Product Producers, Airlines, and Others — Orbitax Tax News & Alerts

Hungary recently published several government decrees amending the application of the temporary windfall taxes on the extra profits of financial institutions, energy companies, retailers, and others that were introduced through Government Decree 197/2022 in June 2022 (previous coverage). Some of the main amendments are summarized as follows:

  • Financial institutions - the tax base for the surtax on financial institutions, which was originally the annual net revenue of the preceding year computed in accordance with the Local Taxes Act, is amended such that income from the sale of goods and services not derived from usual business activities is excluded from the amount of net revenue;
  • Petroleum product producers - with effect from 1 August 2022, the special tax of 25% is increased to 40% on the difference between the price of oil purchased from Russia and the international market price (Brent crude) per month;
  • Airlines - the departure fee, originally HUF 3,900 or HUF 9,750 per passenger depending on the destination (generally European or non-European), is amended with effect from 1 January 2023 so that the fee also takes into account the emissions of aircraft:
    • for European destinations:
      • HUF 2,700 per passenger in the case of aircraft with an emissions value below 10.50 kilograms per seat;
      • HUF 3,900 per passenger in the case of aircraft with an emissions value below between 10.50 kilograms and 17.50 kilograms per seat; and
      • HUF 5,100 per passenger in the case of aircraft with an emissions value of 17.50 kg or more per seat;
    • for non-European destinations:
      • HUF 6,800 per passenger in the case of aircraft with an emissions value below 10.50 kilograms per seat;
      • HUF 9,750 per passenger in the case of aircraft with an emissions value below between 10.50 kilograms and 17.50 kilograms per seat; and
      • HUF 12,700 per passenger in the case of aircraft with an emissions value of 17.50 kg or more per seat;

In addition to the amendments above, a new extra profit tax is introduced on power plants providing energy balancing capacity at the rate of 10% for 2022 and 13% for 2023. The tax base is the revenue from the provision of balancing capacity, with the tax to be generally paid by the 20th of the month following each month. However, payment for the period 1 January to 30 November 2022 is due in two equal installments by 20 December 2022 and 20 February 2023.