The final stretch of the 2022 accounts has arrived. Businesses with a normal financial year (1 January to 31 December) must prepare their accounts and declare their corporation tax on their 2022 profits by 31 May 2023. Experience shows that almost every second company fails to take advantage of the tax base reduction and tax relief opportunities available to them, which in today's economic environment can be a serious waste of money," says Csaba Szabó, Professional Director of ICT Europa Finance Zrt.
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The corporate tax reduction is based on three pillars: tax deferral, tax base reduction and tax relief.
The best-known example of tax deferral and tax deferral is the creation of a development reserve. This method is used by businesses that expect to make investments in the next 4 years. This is because they have to use the development reserve (with one or two exceptions) in the next 4 years, failing which they will have to repay the previously unpaid corporation tax with a penalty. In many cases, companies that have no investment plans but are facing liquidity problems also make use of this possibility and thus delay the payment of this tax," the expert believes.
The range of tax base reduction options and tax incentives in Hungary is very wide. They are mostly linked to small to large investments, but also include R&D discounts, the possibility of offering spectacular team sports, regional and other discounts, and discounts for small and medium-sized enterprises. The significant difference is that while tax deferral options defer tax and are paid over time, tax relief and certain tax base reduction options save actual tax revenue.
The professional director of ICT Europa Finance Zrt. points out that, as a result of their tax due diligence on more than 100 companies in recent years, almost every second company examined has identified unused tax benefits in the order of millions of euros.
The company's audits found an average of 1.6 million forints of tax paid that would not have been due if the discounts had been taken into account. In today's difficult economic environment, not taking advantage of legal tax deduction opportunities can be a serious waste of money for businesses, so it is worth consulting an experienced tax adviser before preparing the final corporate tax return," says the expert.
