Direct taxes - Corporate Income Tax

    Generic part

    Corporate income tax
    Társasági adó
    HU - Hungary
    HUF
    Date
    Year
    1997/01/01
    2019/01/01
    2019/02/06 13:50:58

    Contact information

    Administration

    Service

    Website

    E-mail

    Telephone

    Who sets

    The tax rate is set by

    • Central authority
    • Regional authority
    • Local authority
    • Social security

    The tax base is set by

    • Central authority
    • Regional authority
    • Local authority
    • Social security

    The reliefs are set by

    • Central authority
    • Regional authority
    • Local authority
    • Social security

    Beneficiary

    • Central authority
    • Regional authority
    • Local authority
    • Social security
    • Others

    Geographical Scope

    HU - Hungary
    No Yes

    Taxpayers

    Which entities are liable for CIT?

    • Legal persons
    • Organizational units having no legal personality
    • Tax capital groups
    • Associations
    • Foundations
    • Companies having their seat or management office in other countries, provided that in their country they are treated as legal persons and are subject to tax on income
    • Public corporations
    • Others

    Which entities are exempt from CIT?

    The bodies listed in Schedule No. 5 in Act LXXXI of 1996 on Corporate Tax and Dividend Tax are not subject to corporate tax.
    For example:
    ˗ the Central Bank of Hungary
    ˗ public media service provider as specified by law
    ˗ political parties
    ˗ the Hungarian News Agency
    ˗ institutions of higher operating in the form of budgetary agencies, and student hostels
    ˗ the National Asset Management Company

    Domestic-source income of non-resident entities is

    Taxed
    Not Taxed

    Tax object and basis of assessment

    As general rule, taxable income under corporate income tax includes also

    • Interest
    • Royalties
    • Dividends
    • Capital gains
    • Income from immovable property
    • Income from movable property not listed above
    • Income from agriculture

    Income considered

    Domestic income
    Worldwide income (subject to double-tax relief)

    Deductions, allowances, credits, exemptions

    Valuation of inventory

    • First-in first-out (FIFO)
    • Last-in first-out (LIFO)
    • Average cost
    • Specific identification

    Depreciation rules

    Buildings

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    50 Years
    2 %

    Other fixed immovable assets (e.g. machinery)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    3 Years
    33 %

    Movable (tangible) assets (e.g. cars, furniture, work equipment)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other
    7 Years
    14.5 %

    Intangible assets (e.g. patents)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other

    Land (if any)

    Depreciable
    Not-depreciable
    • Straight-line method
    • Declining balance
    • Production method
    • Combination of above
    • Other

    Are there limits to interest deductions (other than thin capital rules)?

    No Yes

    Is there an Allowance for Corporate Equity?

    No Yes

    Exemptions from taxable income

    No Yes
    • Income from participations (dividends)
    • Patents income (e.g. patent boxes)
    • Other, please describe

    Expenses that are generally not deductible:

    Costs or expenses not incurred in the interest of business operations listed in Schedule No. 3 in Act LXXXI of 1996 on Corporate Tax and Dividend Tax
    For example:
    - the consideration (whether in full or in part) for a service in excess of 200,000 forints without value added tax,
    - the book value of missing assets (adjusted book value of intangible assets and tangible assets),
    - the book value of a tangible asset recorded by value when retired from service,

    Losses

    Loss carry-forward exists?

    No Yes
    • Indefinite
    5 Years

    Loss carry-backward exists?

    No Yes
    • Indefinite
    2 Years

    Tax credits available?

    No Yes
    • For research and development investments
    • For training
    • Other, please describe:
    - On support provided to cinematographic works,
    - On sponsorship of popular team sports
    - On Investments, Renovations to Comply with Energy Efficiency Targets
    - On Live Music Services
    - Development Tax Incentive
    - Tax allowance for small and medium-sized enterprises

    Rate(s) Structure

    9 %
    9 %

    Special tax rate for SMEs

    No Yes

    Measures against profit shifting

    Do Thin Capitalization (TC) rules exist?

    No Yes
    2012/01/01
    • Explicit TC law
    • Part of CIT law
    • Arm’s length
    • Ratio
    :
    Internal
    Internal and external

    TC depends on shareholding?

    No Yes
    Direct
    Indirect

    Automatic remedy

    No Yes
    • Non-deductibility of interest
    • Reclassification as dividend
    All companies
    Foreign companies
    Non-EU companies

    Transfer pricing rules exists?

    No Yes
    No Yes
    • Fee
    • Tax base increase

    Special features

    Is group taxation available?

    No Yes

    Is there a specific anti-avoidance provision in the legislation?

    No Yes

    International aspects

     
    Treaty countries
    Non-treaty countries
    Repatriated profits are taxed according to the following system
    • Exemption system
    • Tax credit
    • Deduction
    • Exemption system
    • Tax credit
    • Deduction
    Interest received is taxed
    No Yes
    No Yes
    Tax rate on interest received
    9 %
    9 %
    Outgoing dividends withholding tax
    0 %
    0 %
    Outgoing royalty payments withholding tax
    0 %
    0 %
    Outgoing interest payments withholding tax
    0 %
    0 %
    Foreign losses (of either subsidiaries or permanent establishments) can be set-off
    No Yes
    No Yes
    If yes :
    Minimum direct or indirect shareholding to qualify loss-offset (if applicable)
    Loss carry-forward exists?
    No Yes
    No Yes
    If yes :
    Time limit
    • Indefinite
    • Indefinite
    Size limit
    Loss carry-backward exists?
    No Yes
    No Yes
    If yes :
    Time limit
    • Indefinite
    • Indefinite
    Size limit
    Controlled foreign company (CFC-) rules exist?
    No Yes
    No Yes
    If yes :
    Time limit:
    • Indefinite
    • Indefinite
    Size limit
    243,952,500
    243,952,500
    Threshold for capital or voting power held directly or indirectly by resident in non-resident company:
    50 %
    50 %
    CFC-rules apply if foreign tax rate is lower than:
    4.5 %
    4.5 %
    CFC-rules apply for passive income only?
    No Yes
    No Yes

    Tax due date

    When has the tax return to be filed

    • 3 months after closing of the tax period
    • 6 months after closing of the tax period
    • Later than 6 months after closing of the tax period
    • Date set by the Authority
    • Other
    • Extensions of the deadline are possible

    Advance tax payments due?

    No Yes
    • Monthly
    • Quarterly
    • Bi-annual
    • Annual
    • Other

    Tax collector

    General comments

    Economic function

    • Consumption
    • Labour Employed (paid by employers and employees)
    • Labour Non-employed
    • Capital income: corporations
    • Capital income: income of households
    • Capital income: income of self-employed
    • Capital stocks

    Environmental taxes

    • Energy
    • Transport
    • Pollution/resources

    Tax revenue

    d51o-c01
    Year Annual tax revenue (in millions) % of GDP % of total tax revenue -
    2017
    710,069
    1.8513 %
    4.833 %
    2016
    756,652
    2.133 %
    5.429 %
    2015
    539,777
    1.5701 %
    4.0505 %
    2014
    457,538
    1.4042 %
    3.6864 %
    2013
    322,467
    1.0661 %
    2.8098 %
    2012
    342,305
    1.1893 %
    3.1042 %
    2011
    316,620
    1.1186 %
    3.0573 %
    2010
    323,370
    1.1878 %
    3.1924 %
    2009
    385,543
    1.459 %
    3.7502 %
    2008
    482,524
    1.7744 %
    4.5058 %
    2007
    510,781
    1.989 %
    5.0536 %
    2006
    468,679
    1.9321 %
    5.302 %
    2005
    465,625
    2.064 %
    5.6496 %
    2004
    438,038
    2.0761 %
    5.6272 %
    2003
    413,662
    2.1614 %
    5.806 %
    2002
    396,556
    2.271 %
    6.0919 %
    2001
    351,856
    2.2819 %
    6.0223 %
    2000
    292,722
    2.1927 %
    5.6193 %

    Footnotes