Business News from Hungary by Peterka & Partners
Introduction of new environmental, social, and governance law
On 1 January 2024, a new environmental, social, and governance (“ESG”) law entered into force in Hungary. The new legal regulation concerns environmental and social responsibility promoting sustainable finance, and unified corporate responsibility by imposing relevant obligations on both the Hungarian state and certain companies (such as large companies and SMEs).
Tax implications of mandatory deposit return system
Hungary introduced the mandatory deposit return system (“DRS”) on 1 January 2024. The DRS is a return system for products with a mandatory deposit fee. The new legal regulation entails the following tax implications: (i) the deposit fee shall be listed separately on the invoice, (ii) the deposit fee shall form a tax base at distributors operating the DRS, and (iii) the distribution of deposit fee products not subject to the DRS remains unchanged, i.e., the deposit fee (packaging) sales continue to form a value-added tax base.
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