People you can rely on

2022 was anything but easy: war in the region, extremely challenging energy prices, and increasing inflation. But instead of slipping into depression, we can look back on 2022 at the successes we achieved.

New majority shareholder

in the Hungarian accounting regulations were related to the introduction of IFRS and, in parallel, a slight shift in Hungarian accounting principles towards IFRS in certain areas. Otherwise, accounting regulations were stable, and changes were generally easy to follow.

As regards tax regulations, some principles and concepts seem to be cornerstones in the Hungarian tax

Hungary, however, has a long history of changing tax regulations; it was rather usual that tax laws were changing at least once, if not twice, a year. The recent years’ economic (and budgetary) challenges increased the turbulence of tax law changes and, for 2022 and 2023, made the changes in areas like the “extra profit” surtaxes hard to predict. OECD and EU initiatives like reporting systems and obligations, or anti-tax avoidance directives, add another layer of complexity to regulations and would bring fundamental changes to tax systems at a fast pace.

Zoltán Lambert Managing Partner WTS Klient

In short, we cannot complain: for us, 2022 was explosive, in the positive sense of the word, of course. So much has happened to us that it could easily fill this entire edition of the Budapest Business Journal. In the spring, the Prague-based financial investor ARX Equity Partners joined the company as a new investor, after which we injected some real momentum into rejuvenating the company. Alongside the senior partner and division partner appointments, the addition of Robert Stöllinger as the new chairman of the WTS Klient Supervisory Board ensured the group’s uninterrupted organic growth.

We followed three main paths: the digital and technological upgrading of our office and work processes, the optimisation of our HR processes, and employer branding all took priority. It would take a long time to list all the things we have automated, and the many programmes created to ensure a more attractive workplace for our staff.

One brand – one company

And what about our plans for the near future? Perhaps the most significant change, yet the one with the smallest impact on our daily work, is that from 1 January 2023, the members of our group – which have been operating together so far under the WTS Klient brand name – merged and officially became one company under the name of WTS Klient Business Advisory Ltd. This completed our rebirth in 2022, and in 2023 we will continue down the road we have set out on. In the wake of this renaissance we will continue to rejuvenate our operations in every way, revamping the WTS Klient brand and further developing our digital capabilities.

Forward in numbers and in technology

Our accounting firm was established in 1998 by Hungarian individuals, we set up our tax consulting division in 2012, and a year later we joined WTS Global, one of the world’s leading tax and financial advisory networks. Almost a quarter of a century later, our sales revenue exceeded HUF 2 billion in 2022 with an increase of more than 15% compared to the previous year, and the number of employees rose to 130. As part of our strategic goal of technological innovation and the rapid deployment of state-of-the-art IT solutions, we developed automated IT solutions for VAT and personal income tax returns, also implementing automatic invoice reading for the bookkeeping system, and in cooperation with WTS Global, we developed a completely IT-driven online platform for joint proposals to network member firms, often covering more than 60 countries.

Last year, the company’s HR strategy was also revamped. Our work organisation takes account of the challenges of the post-COVID era with appropriate IT solutions, we offer our employees competitive compensation packages with increased fringe benefits, unlimited free medical examinations and personalised training support.

In times of such momentous change, the slogan of our company cannot remain unchanged either, so we have replaced it with: “People you can rely on”. A more fitting and accurate description of our company you simply will not find… at 13%, and CIT at 9%) remain unchanged, but this was possible as a result of introducing windfall taxes in specific sectors (energy, retail, banking, etc.) and increasing the rates of some extraordinary taxes. A significant part of these changes hit multinationals, and the question remains, how long do we have to plan with them? The 2023 tax and accounting changes were not fundamental, but companies must still review the effect of smaller tax law changes on their business.

Péter Hajnal: We see the regime as stable and very attractive for foreign investors. Hungary is a good location for foreign companies and foreign private persons from a taxation point of view.

Gyöngyi Ferencz: The most significant change was the introduction of the new extra profit taxes announced last summer and levied on companies for the business years 2022-2023, which are primarily aimed at ensuring budgetary equilibrium and providing resources to back up the utility cost reduction, similarly to the special taxes introduced in the 2010 crisis. We have a positive outlook regarding the regulatory changes for the coming years and do not expect to have to deal with any additional burdens that would discourage companies from investing.

Lajos Bagdi: The accounting regulations are reasonably stable; however, significant tax changes occurred for FY23. For example, transfer pricing regulations have been considerably amended; there is a new reporting obligation in the corporation tax return. In the coming months, we do not expect significant changes (except the introduction of the global minimum tax rules).

András Szalai: The accountancy regime is stable, with no significant changes for 2023. There were more changes in taxation, though still without significant impact or changes in the trend. The Hungarian concept continues focusing on higher taxes on consumption with lower taxes on income (corporate or individual). That is despite international trends aiming to increase income taxes, such as the global minimum tax and various global regulations on income data exchange. Highlights of the most critical tax changes include the extra profit taxes and the new transfer pricing data provision regulation.

Gábor Fajcsák: Hungary’s tax and accountancy regime can be considered reasonably stable. Among the tax changes applicable in 2023, the so-called “extraprofit taxes” should be highlighted, which are supposed to stay with us until the end of 2023. These measures are exceptional, as they were implemented under emergency legislation following the COVID19 pandemic and the war in Ukraine. However, the Hungarian government has guaranteed that these provisions will be abolished at the end of the current year.

Zoltán Lambert: The general tax rates (PIT at 15%, social security