Business infrastructure

Administrative burden on farmers to be reduced

The legal framework for family farms is changing, reducing the administrative burden for 290,000 producers and 83,000 farmworkers.

The transformation aims to strengthen family farms and support generational change, the Minister of Agriculture István Nagy said on the Kossuth Radio program “Good Morning, Hungary.”

The minister added that three forms of operation will be established: primary producer, family farm of primary producers, and a family farm company.

As a result of the amendments, the value limit of the tax exemption for primary producers will increase starting in 2021. There will be no personal income tax on the income of the primary producer if it does not exceed five times the annual minimum wage. The primary producer can also opt for flat-rate taxation if his annual income does not exceed HUF 19.3 million.

The new form of operation of the family farm of primary producers is created by merging the primary producer activity and the current family farm. In this form, they can opt for a flat tax as long as their annual income does not exceed 40 times the minimum wage, or HUF 77.28 million.

The income limits were tied to the current minimum wage so that new regulations do not have to be applied every year.

The family farm company category is available for agricultural holdings, cooperatives or forest ownership associations set up by relatives. It will provide a basis for encouraging agri-generational change and competitive growth.

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