last updated on 16 May 2023.
The end of May is an important time in the life of Hungarian companies. Yearly reports and taxes must be submitted by 31 May. Are you ready for the year-end closing?
Year-end closing and annual reporting
For most Hungarian companies, the fiscal year is the same as the calendar year. After the end of their fiscal years, companies have 5 months to publish their annual financial reports. During the year-end closing, you and your accountants must check on the status of your incoming and outgoing invoices, see if everything was duly invoiced and paid, then calculate profits, and make sure all taxes and contributions are paid on time.
If you miss the 31 May deadline, you will get a notice to publish your annual financial report as soon as possible. Then you still have another 2 months to comply. If you fail to do so, the tax number of your Hungarian company will be deleted, which means you will not be able to issue any more invoices, and you will not be able to reclaim VAT for your costs.
Taxes that must be paid until 31 May
- Corporate tax
- Small business tax (KIVA)
- Local business tax
- Innovation contribution
Make sure to pay these taxes on time, by 31 May the very latest. If you fail to do so, your company may be fined.
Corporate tax
Hungarian companies make an advance payment on their corporate taxes every quarter, which is necessarily only an estimate. After the precise amount of corporate tax to be paid is calculated during the year-end closing, you must pay the difference between what you have already paid and the precise amount (if the precise amount is bigger than what you have paid).
Small business tax (KIVA)
With KIVA, small and medium-sized companies also make advance payments, but monthly. KIVA must also be reported by 31 May, and differences should be paid to the Tax authority.
Watch out! If your company leaves the KIVA tax regime during the year, you must pay your KIVA taxes in full by the end of the fifth month after your last month still as a KIVA taxpayer, and not by the end of May.
Local business tax
While the local business tax is paid to the municipality of your registered seat address, the tax returns should be submitted to the Tax Authority, preferably through their official form submission program (ANYK).
Innovation contribution
As the owner of a Hungarian SME, you are probably not required to pay the innovation contribution, which is 0.3% of your tax base. If you have less than 50 employees and a yearly revenue under EUR 10,000,000, you will be exempt. Otherwise, companies make an advance payment on the innovation contribution monthly, so with the year-end closing they only have to pay the difference, and submit a report.
Year-end closing with Helpers Finance
The better you take care of your finances during the fiscal year, the less work there remains to do when the time for year-end closing comes. Are you in regular contact with your accountant? Do you submit all incoming and outgoing invoices promptly? Do you pay your taxes in time?
The team at Helpers Finance has plenty of experience working with small and medium-sized companies with a foreign owner. Precise bookkeeping and extensive know-how let our colleagues support your company throughout the year and conclude the year-end closing without problems.
