Taxes on extra profits will remain, and the population can also pay taxes on savings

The government is not abolishing the extra profit taxes introduced in the summer of 2022, but only halving the tax obligations for certain sectors in 2024. This has disappointed the affected sectors and the European Commission, who were expecting the complete elimination of the extra profit taxes. It seems that these originally temporary special taxes will eventually become permanent elements of the tax system, which is unfavorable for the investment climate in Hungary.

The government decision regarding the modification of regulations on investment fund investment rules brings significant changes in the field of investment funds. The regulation, which will come into effect on June 1st, essentially limits the investments of certain investment funds to government securities. This means that institutional investors will be required to purchase a significant amount of government bonds, representing a substantial intervention by the state in the activities of investment funds.

Furthermore, the government has also passed a new decree that increases the tax burden on retail investments. Natural persons will be required to pay social contribution tax on certain interest income, which was previously subject to interest tax. However, interest income from real estate funds remains exempt, and government securities will continue to be tax-free. The decree will take effect on July 1st and aims to increase state revenues, encourage savings in government securities, and stimulate consumption.