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BREAKING: Hungary To Cut Corporate Tax Rate To EU Record Low 9 Percent

Tamás Székely 2016.11.17.

Hungarian Prime Minister Viktor Orbán has announced today at the Regional Digital Summit in Budapest that as of 1 January 2017 corporate profit tax rate in Hungary will be lowered to a flat 9 percent, economic news portal portfolio.hu reported. The decision, which – as it stands now – would make the Hungarian corporate profit tax the lowest of its kind in the European Union, was made at a cabinet meeting on Wednesday, on the basis of a proposal by economy minister Mihály Varga and consultations with employers, the Prime Minsiter said.

The corporate profit tax currently has two rates in Hungary, 10% for smaller companies (up to HUF 500M or EUR 1.6M annual revenue) and 19% above that level, which means that the reduction will be a remarkable 10 percent for the bigger companies. According to portfolio.hu’s estimation, Hungary’s budget has received in HUF 689.9 billion corporate tax revenues for this year, up from HUF 548.8 billion posted in 2015. “The 2017 budget approved in the summer targeted HUF 734.7 bn corporate tax revenues, and it is unclear how much of this will be lost to the rate reduction”, the paper notes.

In his speech delivered at the Regional Digital Summit PM Viktor Orbán also said he asked Günther Oettinger, EU Commissioner for the Digital Economy and Society, to stand by the notion that digital services are one of the “basic needs”, such as milk or bread. He reminded that Hungary plans to lower VAT on Internet services next year to 18% from 27% currently and intends to take it to 5% in 2018, but the EU has refused to approve this for now.

via portfolio.hu and MTI photo: MTI