The tax allowance system will become simpler from 2021. The adopted legislative proposal modifies the rules pertaining to personal allowance while keeping the conditions giving rise to the entitlement unchanged. From 2021, a personal allowance may be applied as an item reducing the consolidated tax base, its rate shall continue to depend on the minimum wage. The legislation provides that the personal allowance may be used after the allowance of a mother raising four or more children but before the allowance of those in their first marriage and before the family allowance.
In addition, the difference between the so-called recreational limit amounts established for the tax obligation of fringe benefits provided by budgetary authorities and other employers will be abolished. As of 01 January 2021, the limit will be HUF 450 000 for every employer, and any provided benefit exceeding such amount shall be regarded as a certain specified benefit.
Based on a provisional rule (Act LVIII of 2020), between 01 January and 30 June 2021, by derogation from the Personal Income Tax Act, the following shall remain unchanged in respect of the Széchenyi Recreational Card:
-the subsidy transferred to the place of accommodation sub-account up to HUF 400,000 per year;
-the subsidy transferred to the hospitality sub-account up to HUF 265,000 per year;
-the subsidy transferred to the leisure time sub-account up to HUF 135,000 per year
shall qualify as a fringe benefit. The annual recreational limit amount shall be HUF 800,000 in the case of other employers and HUF 400,000 in the case of budgetary organizations until 30 June.
Concerning Széchenyi Recreation Cards (SZÉP Cards), it is important to note that benefits provided by other employers shall be taken into account again as of 01 July 2021 when determining the annual limit amounts.
The range of tax-free benefits shall be expanded, too, within the scope of the Family Home Subsidy action plan, in respect of the home renovation subsidy for families raising children; in addition, in view of the current pandemic situation, the case where the payer provides an epidemiological screening test to the private individual in any form shall qualify as a tax-free income. This provision can also be applied to screening tests performed during the first wave of the pandemic.
From 2021, in the case of a closed-end lease or purchase by instalments, title to a passenger car qualifying as own property can also be proven with a valid lease contract or loan contract.