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Support in innovation contribution calculation and return preparation

The rate of innovation contribution is 0.3%. Its base is that of local business tax not reduced by tax base decreasing items. The contribution is payable by the business associations having their seat in Hungary who do not qualify as micro or small enterprises for the purposes of the SME Act.

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Don't hesitate to contact us!

Diána Varga

Senior Manager, Tax services

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The rule of innovation contribution exemption of small and micro enterprises changed as of 1 January 2019! Special attention needs to be paid to the classification of small and micro enterprises as companies no longer qualify as small and micro enterprises individually, considering only the business association in question, but the following headcount, net sales revenue and balance sheet total have to be considered on an aggregate basis taking affiliates and related parties into account also. A company will qualify as a small enterprise if the total headcount of its employees is less than 50 and at least one of its annual net sales revenue or balance sheet total does not exceed the forint-equivalent of 10 million Euros. 

The companies becoming obliged to pay innovation contribution from this year will have to declare and pay the pro rata temporis part of their expected annual innovation contribution liability for 2020 for the first and second quarters until 23 April and 22 July respectively. In addition, from 31 May/30 September (i.e. prior to the filing of the return for the second quarter) an advance return will have to be filed for the period from 1 July 2020 to 30 June 2021  in a quarterly breakdown based on the figures of the 2019 financial statements. Finally, the entities obliged to pay innovation contribution will also have to file a tax advance top-up return until 20 December and pay any potential tax advance difference. 

In the case of a tax authority audit, a tax shortage will be established if any obligation is not fulfilled or assessed in a lower amount than the actual liability on which tax penalty and late payment charge will be payable also. HU TA may also impose default penalty in the case of failure to file or late filing of the contribution advance returns a NAV. 

Who is our offer for?

Members with a Hungarian seat of multinational or domestic company groups as the determining of small and micro enterprise status and innovation contribution payment obligation is the most difficult in their case. After a review of the preliminary data received, the trial balance and the financial statements, we prepare a special price offer based on the expected time requirement of our work and the complexity of the calculation. 

Why should you choose our Support in innovation contribution calculation and return preparation service?

  • Our qualified experts help you in determining your 2020 classification for the purposes of the SME Act and whether you are to pay innovation contribution. 
  • After collection of the necessary information and data, we calculate your company's innovation contribution advance payment obligation and prepare the necessary advance returns. 
  • After an assessment of the data expected at annual level, we prepare the calculation of your innovation contribution advance top-up obligation and the relating return. 
  • We prepare and, if required, review the innovation contribution calculation and return prepared by your company. 
  • We summarize our expert opinion and recommendations in the form of a letter of tax advice on any innovation contribution related matter. 

    If you have any question, please don't hesitate to contact our experts!

    Contact our expert directly or send us an offer request!

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