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Hungary: Domestic Corporate Taxation

Income Tax Rates

The corporate income tax rate on net profits was reduced to 10% with effect from July 1, 2010 for a tax base up to HUF500m. Above that, a tax rate of 19% applies. The profit base for corporate tax purposes is the accounting profit, based on world-wide profits of the company. No distinction is made between capital gains and regular income. Arm's length standards are required.

A local business income tax of 2% applies in many towns, which is based on gross profit (revenues minus cost of goods sold and subcontractor fees). Hungarian offshore companies are exempted from local income tax.

Small businesses are taxed at a flat rate of 25% under EVA (simplified enterprise tax), which eliminates any other income tax or levy.



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