Hasznos

Changes to the subject tax exemption in 2025

From January 1, 2025, the upper income limit of the subject tax exemption may increase

from HUF 12 million to HUF 15 million. When calculating the income limit, all income derived

from the economic activity of the taxable person must be taken into account.

The condition for choosing the subject tax exemption is that the registered office or

permanent establishment of the taxable person is in the country, and the annual income

does not exceed the upper limit prescribed by law. Tax exemption is also available to those

who do not engage in activities that exclude tax exemption, such as real estate sales or

financial services.

Subject tax exemption cannot be selected if the company is obliged to charge VAT during

public procurement or import transactions. It makes sense to be subject to VAT if the

business wants to reclaim significant input VAT, or if larger investments are expected, such

as building a business premises, reclaiming VAT can be a significant advantage.

If the company starts its activities during the year, it can choose the subject tax exemption at

the same time as the domestic registration. It is important that you make a timely

declaration to the tax authorities for the tax year and ensure that the expected income from

the activity does not exceed the maximum limit.

If the tax-exempt taxpayer provides services or sells products abroad, the income from such

transactions must be taken into account when calculating the income limit. After such

activities, a VAT declaration and tax payment obligation arises.

If the business falls out of the subject tax exemption, a monthly VAT declaration obligation

comes into force, which must be submitted by the 20th of the following month.

To choose EU tax exemption, the company must register with the tax authority of the given

EU country and have a valid VAT number, and it is necessary that the annual income does

not exceed the tax exemption limit prescribed in the given country.

The new rules for subject tax exemption bring significant changes. The increased income

limit and modified administrative obligations offer new opportunities for small

entrepreneurs.

Source: Manager Practice