Extension of 10pc corporate tax to have little effect on company tax burden, MAX says

Budapest, November 4, 2010 (MTI-ECONEWS) – The government’s raising of the 10pc corporate tax to a tax base of HUF 500m will not affect the tax burden of companies operating in Hungary significantly, President Laszlo Zara of the newly founded Alliance of Hungarian Tax Consultants and Accountants (MAX) said on Thursday.

Mr Zara said that the extension of the 10pc preferential corporate tax rate will have no influence on the tax burden of micro-enterprises, which already fell under the preferential rate, while Hungary’s 2,300 major companies pay, in effect, around 10pc profit tax due to the various tax discounts.

    On the whole, the introduction of the extraordinary taxes (the so-called crisis taxes levied on the energy, telecom and trade companies as well as the financial sector) will by and large offset the impact of the extension of the preferential rate and the elimination of several minor taxes, Mr Zara said.

    Legislation approved at mid-year extended the limit for a 10pc preferential corporate tax rate from annual profits of HUF 50m to HUF 500m. Companies whose tax base is higher now pay a 19pc corporate tax rate.