Corporate Tax Benefits of Hungary
Contributed by Company Express kft
22 July, 2019
Since Hungary become a member of the European Union in 2004, the government has estabilished several auspicious measures in favor of the foreign investors. For instance, the current 9% corporate tax rate is the lowest now in Europe, and apart from that under certain conditions, the Hungarian Legislation allows the usage of certain tax benefits in regards to the corporate tax. Below you can find information about the most essential tax benefits.
The Hungarian Law decides favorably in the scope of the small- and medium-sized businesses, because if the company is considered as a small- or medium-sized business, on the last day of the tax year, in which the company established its Credit Agreement (the credit has to be resorted from a financial institution, and it can be only used for acquiring or producing tangible assets), the company can take tax benefits, which rate is currently the amount of the interest on the credit in the given tax year. This statutory provision can be really prosperous for smaller companies, since it significantly facilitates the conditions of the borrowing.
If you are planning to achieve a bigger start-up investment, it is worth for you to consider it performing this in Hungary, since the Government allows the usage of corporate tax benefits for small- and medium-sized businesses, and for large business in specific regions of Hungary, if the statutory conditions are met. On basically the tax allowance can be used in case of an start-up investment which value is at least 3 billion HUF, but the enables it in other cases too (for example in case of an environmental start-up investment which value is at least 100 million HUF). In this case the rate of the tax benefit is variable, but under such circumstances a Hungarian investment can be really favorable, because under such tax conditions, a larger investment can be especially cost-saving too.
In case of an investment/restoration for energy efficiency purposes, the Law also allows the usage of tax benefits, but in this case the benefits can be used for 6 tax years, and in this case a minimum amount for the investment is not established.
As you can see from the above, the opportunities for investors in Hungary are signficantly growing, and these are just getting better and better as time goes by. If you want to establish a properly working, successful business within Europe, with highly auspicious conditions, you should consider the incorporation in Hungary.
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