A number of tax-efficient or even tax-free solutions are available
It is a common practice among an increasing number of businesses in Hungary to give gifts to their employees not only at the end of the year, but also on special occasions during the year, such as Easter. The scope of this year's gifts will be influenced by both the current epidemic situation and current tax legislation, says Moore Hungary, a consultancy and audit firm.
If a certain amount is available for gifts, it is advisable for the company to choose an option that can be implemented at a lower tax rate, thus increasing the value for the employee.
„In principle, a gift is income from employment and this is up to double the cost of the gift - points out Andrea Kocziha, tax partner at Moore Hungary. However, if the gift can be classified as a certain defined benefits the value of the gift, the payer is only liable for 35,99 per cent aggregated tax and contribution payments obligation generated by.”
Some defined benefits are a gift of small value for employees and their dependants. A gift of small value the person ofonce a year, up to 10 percent of the minimum wage (HUF 16.740). A low-value gift may be a product, service or voucher redeemable for such products or services, provided that it can only be used for a specific product or service and cannot be redeemed for money.
At a corporate event the paying agent a much higher individual gift of up to 25 percent of the minimum wage (HUF 41,850) may be given as „certain specified allowances” if the event is a hospitality or leisure event. An important criterion is that the gift cannot be a voucher in this case, and the souvenir at the event must also be transferred.
Corporate event for the current even in a covid emergency can be held - in online form. According to the NAV online event it is sufficient if the gift is only given „orally”, i.e. they will tell you what the gift is and how to get it. And you can pick it up later by delivery or in person from the payer.
„Tax-free gifts the employer does not have the option, but in a pandemic, it can be a particularly motivating move if the employer, on Easter provide new tools for the job for employees. In this case the asset remains the property of the employer, but acan be used by the worker in the course of his/her work, or even partly for private use. Such a reward could be a new computer, mouse, mouse pad, laptop bag, a valuable pen or mobile phone handset, to name but a few.” - added Andrea Kocziha.
Moore Hungary
Moore Global, which started in a London office more than 110 years ago, is now one of the world's leading consulting and audit networks. Present in over 100 countries worldwide, the network has more than 600 independent offices and over 30,000 employees. The group's turnover for the last financial year exceeded $3 billion.
Moore Global's services will be directly available in the domestic market from March 2021. Moore Hungary has been offering a full range of consulting services in the fields of business, financial, tax, accounting and auditing with a team of almost 100 experts since its inception.
In our fast-changing world, Moore provides strategic guidance and practical advice to help clients navigate and understand the complex regulatory and changing market environment and industry conditions, and thereby find the best solutions.
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