Hungary
Scope of Income Tax
If
a company is a Hungarian resident, it is taxed
on its worldwide income. Non-resident companies
are only taxable on their Hungarian sourced
income.
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Hungary 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 HUF500mio. 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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Hungary
Calculation of Taxable Base
The tax base is the accounting profit in the
annual financial statements, adjusted by rules
on the deductibility of various items prescribed
by the Tax on Corporate Income Law.
There is a minimum tax base for all taxpayers,
which is 2% of all revenues received by the
taxpayer.
Hungary Filing Requirements and Payment of
Tax
A self-assessment tax system operates in Hungary.
The individual tax year is the calendar year,
and businesses may use the calendar or business
year.
For
companies whose tax year follows the calendar
year, the deadline for paying corporate income
tax is 31 May. If the company’s tax
year differs from the calendar year, the deadline
is 150 days from the end of the fiscal year.
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Hungary Withholding Taxes
In Hungary, withholding tax is not imposed
on dividends, interests or royalties.
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