Tax payment in foreign currency: a decision must be made within a few days
As of September 30, 2022, companies will have the first opportunity to pay their corporate tax obligations in euros or US dollars from the next tax year. The intention to change the currency of the corporate tax must be notified to the NAV by the first day of the month preceding the first day of the tax year. In the case of calendar year taxpayers – they make up the majority of companies – this means a deadline of December 1. It is also possible to pay the local business tax advance and local business tax payment due from January 1, 2023 in euros or US dollars.
Time to decide
“The deadline for corporate tax is void, if it is missed, there is no place to submit a request for verification, the defaulting company will be able to use the option of paying tax in foreign currency in the 2024 tax year at the earliest
– emphasizes Andrea Kocziha, tax consulting partner of Moore Hungary.
“The payment of the local business tax in foreign currency, however, is not subject to prior notification by the relevant government decree.”
Changing the currency of tax payment can be chosen regardless of the currency of bookkeeping, therefore, in addition to businesses that maintain their books in foreign currency, it is also worth considering the application of this option to those businesses that keep their books in HUF, but a significant part of their income flows in foreign currency, or carry out large amounts of foreign currency transactions.
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