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Economy & Policy

VAT exemption threshold remains at HUF 12 million

The move is Hungary’s way of defending the interests of the smallest businesses in Brussels by ensuring that the VAT exemption threshold remains at HUF 12 million.

Norbert Izer, the Finance Ministry’s state secretary for tax affairs, told MTI that the most popular tax treatment at present is the exemption from VAT. More than 812,000 people are taxed this way.  

The fact that the threshold can remain higher than the level provided for in the Accession Treaty until December 31, 2024, will save small businesses a total of around HUF 20 billion a year and make their taxation much simpler, Izer said. 

The government’s tax policy objective has remained unchanged since 2010 including tax reductions, simplification, and a significant reduction in administration, the state secretary stressed, adding that this can also be seen in the change of the exemption rule. 

He recalled that while in 2009 the threshold for the exemption was only HUF 5 million, it was raised to HUF 12 million by 2019.  In 2009, only around 367,000 businesses were able to benefit from the exemption, while now more than twice as many can, he said.

Izer noted that the government’s objective of keeping the tax rules for small businesses as simple as possible had been met. 

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