The upshot would be that both companies would pay considerably more in taxes than they do now.

According to the motion, drug companies would not be able to deduct their R&D expenses from the base of a 12% surcharge paid to the health insurance fund and the medical representative fees.

An amendment approved last year allowed drug companies to fully write down their R&D expenses from the tax base comprised of these two elements.

This boosted Egis’s operating profit by Ft 2.4 billion and that of Richter by Ft 2.1 billion. Shares of both companies dropped by around 1.5% last week on the news. "

Source: Hungary Around the Clock

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