Here’s a list of how we tax this year

Budapest – Almost everyone will be affected by the tax cuts in 2022.

In total, more than HUF 150 billion will remain with families, young people, small and medium-sized enterprises, cryptocurrency traders, as well as the vast majority of employees through tax cuts and an increase in the minimum wage, said Norbert Izer to MTI. .

The Secretary of State for Taxation was the first to highlight the family tax rebate. He recalled that parents raising children and those entitled to family benefits (such as pregnant mothers or recipients of invalidity benefits) receive a total of more than HUF 600 billion in family tax refunds.

The tax exemption for young people under the age of 25 will debut this year, leaving a total of HUF 140 billion for about a quarter of a million young people. From 1 January 2022, those affected will be exempt from paying 15 per cent personal income tax up to the amount of their average earnings.

The third favorable change affecting the population will affect cryptocurrency traders, the secretary of state said. They are already eligible for favorable rules for cryptocurrencies in the PIT return to be submitted this year. The tax rate will be halved to 15 percent, clearing the domestic crypto market and further whitening the economy, which could bring significant revenue to the budget, he explained.

Norbert Izer was the first of the tax changes affecting businesses to highlight a four percentage point reduction in the public burden of work. While 33.5 percent of the tax was levied on businesses in 2009, from January 1, 2022, less than half: only 13 percent, he noted.

The one and a half percent vocational training contribution will be abolished this year, followed by a two and a half percentage point reduction in the social contribution tax payable by businesses. The change will leave almost HUF 600 billion to those affected, and will also mean a significant tax simplification, as another independent type of tax will be abolished. By abolishing the contribution of the vocational training company and a complicated administrative obligation, the enterprises providing the Hungarian education and dual training can essentially claim the benefit from the social support tax, as before, the Secretary of State emphasized.

The small business tax rate has been reduced by a further 1 percentage point to 10 per cent, with the Secretary of State moving to SME relief. The already outlined companies account for HUF 10 billion at the tax temperature, but it can already be seen that this amount will be higher, as almost nine thousand new companies have already indicated their change of interest by 31 December due to a favorable discount.

He emphasized that this year the discount for small and medium-sized enterprises is valid in the local business tax, ie in 2022 the tax will be paid in most cases to those concerned, with a maximum tax rate of one percent for those affected. Through the measure, SMEs can save a total of HUF 150 billion. This year, businesses, families and the general public will be protected by the rule that the local tax ordinance or the municipal tax ordinance, which would increase the tax rate or reduce the tax benefit, will not apply, and in 2022 local governments will not have the opportunity to to introduce a non-existent local tax or municipal tax.

According to Norbert Izer, the big winners in 2022 could be micro-enterprises. He reminded that the flat tax will be completely renewed this year, and its choice is worth considering not only for the smallest companies, but also for those who work as sole proprietors in addition to many employment relationships. The income of a self-employed person with a flat tax is tax-free up to half of the annual minimum wage, which means that the flat-rate taxpayer does not have to pay personal income taxes up to HUF 2 million, recalling the Secretary of State.

Norbert Izer also indicated that 2022 will also make it easier for venture capital fund managers, the stock exchange and commodity exchange service providers to tax, as the special tax liability of financial institutions will be abolished in their case.