The representation that increases corporate tax base, business gifts of personal income tax exemption limit for Income Tax Act contains no value.
This restriction may be granted on the basis of a business gift.
However, taxpayers should be hardly separated depending on who gives the business gift but it can be decided only the way how the business taxed as a gift.
- subject to corporation tax
- not subject to corporation tax
If the taxpayer is a company:
Then in all cases (regardless of the value!) required to increase the corporate tax base because according to the TAO Act § 8 (1) d) and 3 Appendix representation and business gift are not the costs that incurred for the company therefore should increase the tax base with it! Since based on the law of TAO is charged (19%) so the Personal Income Tax Act. qualifies for exemption!
If the giver is not subject to corporation tax (Eva, self-employed, Ekho)
In this case there is no basis for TAO can be increased so based on 69 § (7) under the personal income tax law is not tax-free basically (only under conditions).
However, if he remains within a specified threshold, such as distributor under personal income tax than the gift remains a tax-free allowance as well.
Payer (7) - if the representation, business gifts that would otherwise not exempt under the law, notwithstanding paragraph (5) - is not required to report and pay:
payer that is not mentioned above in a) b) points
aa) after the revenue determined on the basis of representation (4) is calculated tax rate by an amount which is not more than the year's total annual revenue accounted for 1 per cent but not more than 54 percent of 25 million forints,
b) the tax year in question, the unique value of 10 thousand HUF, not exceeding business gifts as defined on the basis of income after the tax rate under paragraph (4) calculated numbers as described in paragraph(9) 54 percent of value calculated by 5000 HUF per person;
b) the social organization, public body, religious entity, the Foundation (including the public foundation) in the case of the representation and payment of 10 thousand HUF unique value not exceeding business gifts as defined on the basis of income after (4) the rate of profit after tax, and mission-related activities incurred in the year's accounts for 10 per cent of total expenditure recorded of 54 percent, but accounted for more than the year's total annual revenue of 10 per cent of 54 per cent)
8.38. it is income defined on the basis of representation and business gifts if the paying company must take into account as item to increase tax base.
What is important: if a company buys business gift in the value of 100.000FT then it
once put into the costs (-100.000Ft)
puts in the corporate tax base (e.g. revenues) +100000Ft
These two items knocks each line so no extra revenue generated but not the cost.
Example:
Company Revenue: 2.000.000Ft
Company Cost: 1.800.000Ft (costs of the 100,000 business gift that is included in the bill to the amount of TP)
Corporation tax (19%): 200,000 * 19% = 38.000Ft
Correction calculation in the calculation of corporation tax
Company Revenue: 2.000.000Ft
Company Cost: 1.800.000Ft (costs of the 100,000 business gift that is included in the bill, the amount of TP) Corporate Taxes (19%): 200 000 + 100 000 (item to be increased tax base) * 19% = 57.000Ft
57,000 -38,000 = 19,000 tax difference therefore it means that you pay TAO then.
If distributor is not subject to corporation tax (Eva, self-employed, Ekho) he will pay personal income tax (25% or 97.89% or 0%)
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