The Hungarian government aims to attract further investment to Hungary by having the lowest general corporate income tax rate in the European Union (with the same rate available only in Bulgaria and Cyprus).
From 1 July 2010, companies will only have to pay 10% corporate income tax on their tax base up to HUF 500 million (c. € 1.7 million), without any further conditions.
The 19% corporate income tax rate will continue to apply on the excess, although companies may seek to avoid it by splitting existing or future operations into several companies.
As the change took effect in mid-year, the tax base for 2010 tax calculations should be divided pro rata according to the number of days in the tax year falling before or after the rate change.
For the period from 1 January to 30 June 2010, the tax should be calculated according to the previous tax rules; while, for the period from 1 July to 31 December 2010, the preferential 10% tax rate can be applied up to a tax base of HUF 250 million.
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