An important deadline is approaching for taxpayers wishing to pay corporate tax in foreign currency

By: Trademagazin Date: 2022. 11. 22. 13:00

As it was announced at the end of summer / beginning of autumn on August 9, or published in the Magyar Közlönyök on September 26, taxpayers had the opportunity to pay their corporate tax liability, their local business tax advance and the local business tax itself in US dollars (USD) or euros (EUR). But for which group of taxpayers is this option open? Could this be advantageous for a company that maintains its books in forints? Are there any pre-requisites for this? Specialists from the international business and tax consulting firm Grant Thornton are investigating these issues.

Any company can pay in foreign currency

In the case of both corporate tax and local business tax, a common rule is that changing the currency of the tax to USD or EUR is independent of the currency of the relevant taxpayer’s bookkeeping. That is why this can be a favorable opportunity not only for companies that keep their books in these two currencies, but also for companies that, for example, realize most of their income in USD or EUR, or conduct large transactions in these currencies.

The possibility of paying corporate or local business tax in USD or EUR is therefore open to all Hungarian corporate tax or open to taxpayers obliged to pay local business tax, unless the payment has been brought under the scope of the enforcement procedure to be carried out by the tax authority and it must be paid into a separate account managed during the enforcement.

“The decision regarding both types of tax belongs to the business concerned: it is possible to pay both types of tax in foreign currency, it is possible to settle only one in this way, and of course there is also the option that a taxpayer does not use the option of paying in foreign currency in relation to either type of tax”

– emphasizes József Vizer, the head of the tax department of the international business and tax consulting company Grant Thornton.

At the same time, the regulation differs somewhat in relation to the two tax types, so below we present the most important information separately.