Hungary Approves and Updates its GloBE Law

On November 21, 2023, the draft law to implement the EU Minimum Tax Directive was approved by the Hungarian Parliament. It was sent to the Hungarian President on November 22, 2023 for signature.

On November 30, 2023, Act LXXXIV of 2023 on ‘Additional taxes ensuring a global minimum tax level and amending certain tax laws in connection with this’ was published in issue 171/2023 of the Hungarian Official Gazette.

This enacts the EU Minimum Tax Directive into Hungarian Law with the IIR and QDMTT applying for accounting periods beginning on or after December 31, 2023.

The law includes some changes from the original draft law, particularly as regards the operation of Hungary’s domestic minimum top-up tax (intended to be a QDMTT). In the original draft law, the QDMTT was included in Sections 11 and 11/A. In the amended draft law, all the provisions have been included in Section 11 and Section 11/A has been removed.

The QDMTT provisions have been extended and there are new rules relating to partially-owned entities, JVs/MOCEs, when local accounting standards/currency can be used and withholding tax on Hungarian dividends.