Hungary – Muhasebe News

Hungary’s Inflation Drops To 25.2%

MuhasebeNews — Thu, 13 Apr 2023 06:34:38 +0000

Consumer prices were 25.2% higher on average in March 2023 than a year earlier. The highest price rises were measured for electricity, gas and other fuels as well as food over the last twelve months. In one month, consumer prices increased by 0.8% on average.

A price rise of 42.6% was recorded for food, within which the highest ones for the following: 74.0% for eggs, 72.8% for milk products, 68.0% for butter, 67.0% for bread, 66.2% for other confectionery products, 60.6% for cheese, 53.9% for pasta products, 50.4% for milk and 48.0% for rolls. The lowest price increases within the product group were observed for flour (9.7%) and edible oil (3.9%). Electricity, gas and other fuels became 43.1%, within which natural and manufactured gas 62.8%, firewood 55.9%, butane and propane gas 51.6% and electricity 27.6% more expensive. Consumers paid 11.2% more for consumer durables, within which 20.7% more for new passenger cars, 19.6% more for heating and cooking appliances, 18.9% more for kitchen and other furniture and 16.7% more for living and dining room furniture. Alcoholic beverage and tobacco prices rose by 19.7% on average, within which alcoholic beverage prices by 27.4%. Pet food prices increased by 62.3%, the price of detergents by 35.8%, that of toilet articles by 28.1% and household repair and maintenance goods prices by 26.9%. Motor fuels also became 26.9% more expensive. Service charges were up by 13.0%, within which a taxi cost 35.7%, other public entertainment tickets 27.7%, motorway use, renting a car and parking 26.4%, recreation in the country as well as the repair and maintenance of vehicles 24.4% and the repair and maintenance of dwellings 20.6% more for consumers.

In one month, compared to February 2023:

Consumer prices increased by 0.8% on average. Food became 1.5%, within which seasonal food items (potatoes, fresh vegetables and fresh domestic and tropical fruits) 6.1%, coffee 5.1%, non-alcoholic beverages 4.5%, buffet products and chocolate and cocoa both 2.6% and meals at restaurants 1.6% more expensive. Cheese became 3.7%, butter 3.1%, pasta products 2.3%, rolls 1.2% and milk 0.8% cheaper. The price of electricity, gas and other fuels lessened by 3.8%, within which 8.7% less was paid for natural and manufactured gas. Motor fuel prices were cut by 2.6%. Pet food cost 7.0%, detergents 2.1% and flowers and ornamental plants 1.9% more for consumers. On average, services became 1.9%, within which telephone and internet services 8.4%, TV subscriptions 6.5%, a taxi 4.6%, recreation in the country 3.2% and personal care services 2.1% more expensive.

Source: Hungarian Central Statistical Office
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

In January 2023, the volume of industrial production in Hungary declined by 0.2% year-on-year

MuhasebeNews — Tue, 14 Mar 2023 07:48:44 +0000

Based on working-day adjusted data production dropped by 3.2%. Production increased in some manufacturing subsections, with the largest growth in the manufacture of electrical equipment. According to seasonally and working-day adjusted data industrial output was 5.1% lower than in December 2022.

In January 2023:

The volume of industrial production decreased by 0.2% compared to the same period of the previous year. (Compared to the January data published in the first estimate, the data in the second estimate did not change.)

Industrial output in January – according to seasonally and working-day adjusted indices – was 5.1% below the level of the previous month.

The volume of industrial export was 0.2% lower than a year earlier. Transport equipment export, representing a 31% weight within export sales in manufacturing grew by 19.5%, the export in manufacture of electronical equipment accounting for a 14% weight, went up by 51%.

Domestic sales of industry fell by 16.5% and those of manufacturing by 11.5% compared to the same month of the previous year.

Production increased by 1.2% in manufacturing, which dominates industry with a 96% weight and fell by 16.6% in mining and quarrying having a small weight. The output of energy industry (electricity, gas, steam and air-conditioning supply) dropped by 19.5%, mainly due to the much milder weather compared with the previous year (according to the Hungarian Meteorological Service, the average mean temperature in January 2023 was 3.3(C higher than in January 2022).

The manufacture of transport equipment, accounting for 25%, the largest weight in manufacturing, was 20% up on a year earlier. Motor vehicles manufacturing went up by 29%, the manufacture of parts and accessories for motor vehicles rose by 14.4%.

The manufacture of electrical equipment having an 11% weight in manufacturing grew by the highest rate of all subsections, up 44%. Of the two largest groups by weight, the manufacture of batteries and accumulators went up by 97% and the manufacture of electric motors, generators, transformers and electricity distribution and control apparatus by 15.7%.

The manufacture of computer, electronic and optical products accounting for 11% of manufacturing grew by 10.8% compared to the same month of the previous year. Out of the two largest groups, the manufacture of electronic components and boards increased by 12.6%, while the manufacture of consumer electronics declined by 0.9%.

The manufacture of food products, beverages and tobacco products having a 12% share in manufacturing dropped by 12.2%, owing to a decrease in both domestic and export sales. Output increased in only two groups: manufacture of other food products, including manufacture of cocoa, chocolate and sugar confectionery and manufacture of prepared meals and dishes, by 7.7% and manufacture of tobacco products by 48%. The processing and preserving meat and the production of meat products representing the largest weight (21%) fell by 15.6% year-on-year. Production decreased between 0.1 and 51% in the other eight groups, most notably in the processing and preserving of fish, crustaceans and molluscs, having a very small weight.

Out of the two medium-weight representing subsections the manufacture of rubber and plastics products, and other non-metallic mineral products dropped by 13.5%, the manufacture of basic metals and fabricated metal products declined by 12.9% compared to the same month of the previous year. Within the latter, the manufacture of basic iron and steel and of ferro-alloys has shrunk to around half of January 2022.

The decline in the manufacture of chemicals and chemical products continued (by 28%), primarily due to a considerable drop in the manufacture of plastics in primary forms as well as that of fertilisers and nitrogen compounds.

Output in the manufacture of coke, and refined petroleum products was down the most, by 35% from a year earlier, with sales falling in both directions.

Industrial output grew in four regions and declined in other four year-on-year. The highest volume growth was observed in Budapest (15.3%), the most significant decline (10.2%) was registered in Northern Hungary.

The volume of total new orders in the observed divisions of manufacturing was 1.0% higher compared to January 2022. New domestic orders dropped by 10.7%, new export orders grew by 3.1%. The total stock of orders at the end of January was above the previous year’s level by 3.4%.

Minimum Wages in the Other Countries

MuhasebeNews — Mon, 20 Mar 2017 12:51:20 +0000

Introduction
The amount of minimum wages for the next year is determined in the meeting made in December being the last month of the previous year.

The institution which determines the amount of minimum wage is titled “Minimum Wage Determination Commission”.

Members of the Commission are listed below:
– 5 people – Representatives on behalf of the Government
– 5 people – Representatives from Turkish Company Union (on behalf of workers)
– 5 people – Turkey’s Employers’ Association

The amount of minimum wage in 2017 is supposed to be declared before the year ends.

1- What were the Amounts of Minimum Wages in Turkey for the Last Years?
The gross amounts of Minimum wages for 13 years between 2005 and 2017 are shown in the table below.

In the last column of the table, one may see the increase rate of minimum wages in comparison with the previous year.

The increase rate of minimum wage in 2016 is higher compared to the previous years. As minimum living allowance was included in minimum wage. In the previous years, minimum living allowance was not included in minimum wage.

2- How much is the Minimum Wage in 2016?
Minimum wage in 2016 including minimum living allowance;
Gross:                              1.647,00 TL
Net:                                 1.176,47 TL
Minimum Living Allowance: 123,53 TL (minimum)
Net Paid:                          1.300,00 TL (including minimum living allowance)

3- How much is the Minimum Wage in 2017?
The gross amount of minimum wage in 2017 is 1.777,50 TL and the minimum amount for an employee is 1.404,06 TL including minimum living allowance. Minimum living allowance is included in that amount. There will not be added minimum living allowance to the expounded amount.

Minimum wage in 2017 including minimum living allowance;
Gross:                              1.777,50 TL
Net:                                 1.270,75 TL
Minimum Living Allowance: 133,31 TL (minimum)
Net paid:                          1.404,06 TL (including minimum living allowance)

4- Where Would You Like to Live?
If minimum wage is taken into consideration while giving an answer to this question, the answer will be Luxembourg, the Netherlands, Australia or Belgium. For those countries have the maximum amount of minimum wage, according to Organization for Economic Co-operation and Development. Below, one may find the amount of annual minimum wages of some countries in the World in line with the data given by Organization for Economic Co-operation and Development. Turkey ranks number 20 in the list.

Date: 20 March 2017

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Investment Legislation

MuhasebeNews — Mon, 13 Mar 2017 13:39:08 +0000

Turkey’s investment legislation is simple and complies with international standards, while it offers equal treatment for all investors. The backbone of the investment legislation is made up of the Encouragement of Investments and Employment Law No. 5084, Foreign Direct Investments Law No. 4875, the Regulation on the Implementation of the Foreign Direct Investment Law, multilateral and bilateral investment treaties and various laws and related sub-regulations on the promotion of sectorial investments.

Legal Framework of Foreign Direct Investment
1. Foreign Direct Investment (FDI) Law No. 4875

The aim of the Foreign Direct Investment (FDI) Law No. 4875 is:

to encourage FDI in the country
to protect the rights of investors
to align the definitions of an investor and investment with international standards
to establish a notification-based system rather than an approval-based one for FDI
to increase the volume of FDI through streamlined policies and procedures

The FDI Law provides a definition of foreign investors and foreign direct investments. In addition, it explains important principles of FDI, such as;

freedom to invest,
national treatment,
expropriation and nationalization,
freedom of transfer,
national and international arbitration and alternative dispute settlement methods,
valuation of non-cash capital,
employment of foreign personnel,
liaison offices.

The Regulation on the Implementation of the FDI Law consists of specifying the procedures and principles set forth in the FDI Law. The aim of the FDI Law with regard to the work permits for foreigners is:

to regulate the work carried out by foreigners
to stipulate the provisions and rules on work permits given to foreigners
2. Bilateral Agreements
2.a. Bilateral Agreements for the Promotion and Protection of Investments
Bilateral Agreements for the Promotion and Protection of Investments were signed from 1962 onwards with countries that show the potential to improve bilateral investment relations. The basic aim of bilateral investment agreements is to establish a favorable environment for economic cooperation between the contracting parties by defining standards of treatment for investors and their investments within the boundaries of the countries concerned. The aim of these agreements is to increase the flow of capital between the contracting parties, while ensuring a stable investment environment. In addition, by having provisions on international arbitration, they aim to prescribe ways to successfully settle disputes that might occur among investors and the host state. Turkey has signed Bilateral Investment Treaties with 94 countries. However, Turkey is a dualist country, where an international treaty has to be ratified and promulgated in order to become part of the national legal system. Within this regard, 75 Bilateral Investment Treaties out of these 94 have gone into effect so far.

75 countries
Afghanistan, Albania, Argentina, Australia, Austria, Azerbaijan, Bangladesh, Belarus, Belgium-Luxembourg, Bosnia and Herzegovina, Bulgaria, China, Croatia, Cuba, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Libya, Lithuania, Macedonia, Malaysia, Malta, Moldova, Mongolia, Morocco, Netherlands, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Syria, Tajikistan, Thailand, Tunisia, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uzbekistan, Yemen
Source: Ministry of Economy

2. b. Double Taxation Prevention Treaties
Turkey has signed Double Taxation Prevention Treaties with 80 countries. This enables tax paid in one of two countries to be offset against tax payable in the other, thus preventing double taxation.

80 countries
Albania, Algeria, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, China, Croatia, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Moldova, Mongolia, Morocco, Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Serbia and Montenegro, Singapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sudan, Sweden, Switzerland, Syria, Tajikistan, Thailand, Tunisia, Turkish Republic of Northern Cyprus, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States of America, Uzbekistan, Yemen
Source: Revenue Administration

Turkey is continuing to expand the area covered by the Double Taxation Prevention Treaty by adding more countries on an ongoing basis.

2. c. Social Security Agreements
Turkey has signed Social Security Agreements with 26 countries. These agreements make it easier for expatriates to move between countries. The number of these countries will increase in line with the increased sources of FDI.

26 countries
Albania, Austria, Azerbaijan, Belgium, Bosnia and Herzegovina, Bulgaria, Canada and the Province of Quebec, Croatia, Czech Republic, Denmark, France, Georgia, Germany, Libya, Luxembourg, Macedonia, Netherlands, Norway, Romania, Slovakia, Serbia, South Korea, Sweden, Switzerland, Turkish Republic of Northern Cyprus, United Kingdom
Source: Social Security Institution (SSI)

3. Customs Union and Free Trade Agreements (FTA)
A Customs Union Agreement between Turkey and the European Union has been in effect since 1996. The agreement allows trade between Turkey and the EU countries without any customs restrictions. The EU-Turkey Customs Union is one of the steps toward full Turkish membership of the EU itself.

Turkey has FTAs with 37 countries, creating a free trade area in which the countries agree to eliminate tariffs, quotas and preferences on most goods and services traded between them. This framework explains why many global companies are now using Turkey as a second supply source and manufacturing base, not only for the EU and rapidly growing Turkish markets, but also for the Middle East, Black Sea and North African markets, with the added advantage of a relatively low-cost but well-educated labor force, coupled with cost-effective transportation.

37 countries
Albania, Bosnia and Herzegovina, Egypt, Georgia, EFTA, Israel, South Korea, Macedonia, Morocco, Malaysia, Mauritius, Palestine, Jordan, Syria*, Tunisia, Montenegro, Serbia, Chile
Countries that have finalized the negotiation process: Faroe Islands, Ghana, Kosovo, Lebanon, Moldova, Singapore
Countries in the negotiation process: Democratic Republic of the Congo, Cameroon, Colombia, Ecuador, Gulf Cooperation Council, Japan, Libya, Mexico, Mercosur, Peru, Seychelles, Ukraine *suspended
Source: Ministry of Economy

Date: 13 March 2017