The gift market has become more regulated

As of January 2011, several changes occurred in the personal income tax law, which also have an effect on business and promotional gifts.

• Business gift: The value of a business gift cannot exceed 25 percent of the minimum wage – that is HUF 19,500. This type of gift remains to be exempt from personal income tax and contributions do not have to be paid after it. If the value of a business gift exceeds the sum mentioned above, the person who receives the gift is obliged to pay the tax after it because in this case the gift falls into the category of ‘other type of income’.

• Other type of gift with a promotional purpose: The value of an other type of gift with a promotional purpose cannot exceed 1 percent of the minimum wage – that is HUF 780. The law established a new category here as legislators realised that companies simply cannot attach a certificate to each refrigerator magnet given away. If the value of the gift exceeds the sum mentioned above, the person who receives the gift is obliged to pay the tax after it.
• Small value gift: The value of a small value gift cannot exceed 10 percent of the minimum wage – that is HUF 7,800. This type of gift can only be given three times a year to employees or to any private person who does not receive other income from the provider in the tax year
. • Discount granted with a business policy purpose: Point 8.14 of Annex 1 of the Act on Personal Income Tax regulates discounts, returns or other benefits granted with a business purpose. There has been no change in this field, if the conditions laid down in the text of the law are met then the discounts, returns or other benefits are exempt from tax. Large scale sales-increasing campaigns belong to this category, just like free samples.