General information
In December 2021, the Hungarian Parliament had taken into consideration Bill No. T/17882 with the aim to amend the special retail turnover tax amidst a few other changes. Soon after, the same institution has accepted the mentioned Bill and introduced changes regarding the retail turnover tax for the category of large taxpayers in this country.
The law has been amended to increase the tax rate for the highest band of the tax base above HUF 100 billion in 2022, the relevant retail tax rate will be set at 2.7% instead of the previous 2.5%.
In practice, this means that the rate of the retail tax will increase by 0.2 percentage points in the case of retail chains with an annual turnover of over HUF 100 billion. The changes will enter into force as soon as February 2022.
The other important change is an introduction of a food waste reduction penalty where a Food Rescue Centre (FSC) will be set up to collect food products with an imminent expiry date from retail companies (voluntary donations are accepted from companies with a turnover of less than HUF 100 billion) and coordinate their redistribution with the help of charities.
The amendments impose additional obligations on retailers with a turnover of over HUF 100 billion, including a food waste reduction plan. Exceeding the annual food waste target by more than 2% or failing to submit a food waste reduction plan should be sanctioned by a food waste reduction fine of HUF 15,000 up to 0.6% of the food chain supervision fee for the previous business year.
In other words, the current amendment is doubly unfavorable news for the largest multi-chains (e.g. Lidl, Aldi, Tesco, Spar and others): on the one hand, they have been fined for saving food and, on the other, the special retail tax they will have to pay will increase from February 2022.
As a reminder, retail tax is charged on Hungarian resident or foreign resident person/legal entity retailers, selling goods on a commercial basis as per the following NACE codes including the sales without using a fixed establishment, i.e. through an online shop.
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