Corporate Tax in Hungary (Part 3): Extra Profit Tax

This article is the third in a seven-part series on the important rules of corporate taxation in Hungary. After explaining the basic framework and special rules of corporate tax in Hungary, we offer you a summary of the special profit tax. Later in the series, topics such as cross-border treatment, combating tax avoidance, investing in corporate assets and penalties for non-compliance will also be covered.
A special profit tax has been introduced for:

1. Financial service providers
   The tax base must be determined on the basis of the adjusted pre-tax profit of financial service providers in FS.
   The rate of the special tax is 13 percent tax on the part of the tax base that does not exceed HUF 20 billion and 30 percent tax on the part above that.
   A similar additional profit tax is imposed on
2. Banking sector
   After each bank transaction where money is transferred from a Hungarian payment account to another Hungarian or foreign bank account, the bank charges transaction fees in the form of a withholding tax paid by the banks to the tax authorities.
3. Insurance companies
   Insurers must pay an additional insurance tax. The tax is based on the amount of insurance premiums for the various insurance services. The tax rates vary between 1 and 7% depending on the tax base and activity.
4. Petroleum product producers
   A very high additional profit tax (up to 95 percent) is imposed on petroleum product producers.
5. Robin Hood tax
   The special tax of 41 percent is imposed on producers of electricity from renewable energy sources or waste.
6. Pharmaceutical manufacturers, pharmaceutical distributors
   The special taxes imposed on pharmaceutical manufacturers are the tax base

• 0.5 percent for a partial amount not exceeding HUF 50 billion,
• 1.5 percent for the part exceeding HUF 50 billion but not exceeding HUF 150 billion,
• A fee of 4 percent is levied on the amount exceeding HUF 150 billion.

1. Retail
   For the part of the tax base exceeding HUF 100 billion, the additional retail tax rate is 4.5 percent.
2. Telecommunications sector, airlines
   The telecommunications additional tax is levied on companies providing electronic communications services, based on net turnover, and on airlines.

This article provides a general introduction to corporate tax rules in Hungary and should not be considered as specific legal advice.