Corporate Income Tax

From 1 July 2010, the corporate income tax rate is 10% on the first HUF 500 million of the positive tax base without any further preconditions, the tax base above this limit will remain to be subject to 19% corporate income tax. As the 10% corporate income tax rate is amended in the middle of the tax year, this year’s corporate income tax base will be split up proportionately based on the calendar days. The taxpayer has to comply with the earlier legal requirements (e.g. number of employees, tax saving to be used for investment) in the case of reduced tax rate (10%) applicable to the first half year’s tax base until HUF 50 million.

10% tax rate is applicable without any preconditions to the second half-year’s proportionate tax base up to HUF 250 million.

Real Estate Transfer Tax

As an addition to the earlier regulation, the transfer of a real estate owning company’s shares between related parties is exempted from real estate transfer tax. The new rule can be applied for those real estate transfer tax cases which were not ruled on by 1 July 2010. The definition of a company owning real estate and the regulation which is applicable for the real estate transfer tax was enacted on 1 January 2010.

According to this regulation, the acquirer is subject to real estate transfer tax, if it owns (directly or indirectly) at least 75% of a company which owns real estate in Hungary.

Communal tax of entrepreneurs

The communal tax of entrepreneurs is to be repealed from 1 January 2011, in order to decrease the administrative burden of the companies. "

Source: Portfolio Online Financial Journal