Understanding the Global Minimum Tax
Due to changing tax regulations, companies must prepare for new obligations – delays may result in serious financial consequences.
Who is Affected?
If your company is affected, you need to act now!
If your corporate group meets the following conditions, your company is also affected by the global minimum tax regulation:
– Annual revenue exceeds 750 million euros (approximately 286 billion HUF) in at least two of the past four years.
– The group’s affiliated companies operate in multiple countries.
– Country-by-country reporting obligation (CbCR).
What is the Global Minimum Tax?
The global minimum tax is a measure developed by the OECD to combat aggressive tax planning. The regulation introduces a 15% global minimum profit tax for multinational corporate groups and large domestic companies, regardless of where they operate. Its goal is to reduce tax avoidance and encourage companies to pay taxes where they conduct real economic activities.
Risks of Non-Compliance
Delays Can Carry Serious Risks:
– Penalty for non-compliance: Up to 5-10 million HUF if there are errors or deficiencies in data reporting.
– Tax penalty: Up to 50-200% of the determined tax shortfall.
– Problematic audit and three-column reporting obligation: This could harm your company’s reputation with tax authorities and business partners.
Global Minimum Tax Deadlines
– May 31, 2025 – Deadline for the annual report, which must include information related to the global minimum tax.
– November 20, 2025 – Deadline for declaring and paying the minimum tax prepayment.
– June 30, 2026 – Deadline for the annual minimum tax declaration.
Take Action Now
Do not wait until the deadlines! Delays can bring significant financial and administrative burdens.
Under transfer pricing rules, the penalty for non-compliance can be up to 5 million HUF per transaction, so after just a few transactions, the penalty can easily accumulate to 20 million HUF.
The Hungarian Tax Authority (NAV) closely monitors transactions between related companies, and inadequate documentation can result in severe financial consequences.
Further Information and Assistance
If you need more valuable information, subscribe to our newsletter. If you need help with GDPR compliance, feel free to contact us with your questions.
Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)
___________________________________
Katona és Társai Ügyvédi Társulás
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobil: + 36 70 344 0388
Fax: +36 1 700 27 57
g.katona@katonalaw.com