On 14 April 2020, Hungary published the Government Decree on rules of special retail tax that was re-established due to the COVID-19 crisis. The new regime will be applicable to both the resident taxpayers and the foreign seated e-commerce corporates.
The tax is levied on net sales generated from retail activities and the additional revenue from services provided to the suppliers. The tax base also considers the discount allowed by the suppliers to the retailers.
List of sectors that fall under the regime include:
- Retail sale of light motor vehicles and cars
- Retail sale of furniture, household appliances, hardware, clothing, cosmetics, jewelry, toys and sporting goods
- Retail sale of food, beverages and tobacco
- Retail sale of pharmaceutical and medical goods
- Retail sale of books, newspapers, stationary
- Retail sale of information and communication technology products
- Mail order, internet-based retail
The rate of the retail tax will increase progressively:
- 0% up to tax base of HUF 500 million
- 1% for tax base between HUF 500 million to 30 billion
- 4% for tax base between HUF 30 billion to 100 billion
- 5% for tax base exceeding HUF 100 billion
The tax payable will be computed by multiplying the tax base with the respective rates. This will then be proportionated with the days of crisis. It is obligatory for the taxpayers to file first the tax return by 31 May 2020, where the tax payable will be calculated on one-twelfth of the net sales of the previous year, closed before 1 May 2020.
The taxpayers can also avail of a reduction in advance if the net sales in the previous month of the due date of the tax advance did not reach 60% of the net sales of the same month in the previous year.