Corporate income tax: Corporate tax is set at 19% (tax base is profit before taxes) and tax payable

may be reduced by various tax incentives. Corporate tax can be reduced to 10% for the sum of a company's tax base that does not exceed HUF 50 million if:     corporate tax benefits are not effected at least one person is employed employees are paid at least double the minimum wage on average the company is not subject of a labour law penalty.

The sum saved must be spent on investments or recruiting unemployed persons or career starters; or on the repayment of loans in the following 4 years.

Personal income tax: Taxable base (income in HUF) 0-5,000,000 (EUR 17,491) Rate 17%

5,000,000 – Over 850,000 + 32% (on the excess over 5,000,000) Tax base = gross wage + social security contributions (27%) Fringe benefits Employer may choose to reward employees with the following benefits: Employers will be liable to pay tax at a preferential rate of 25% on certain fringe and other benefits from 2010:        local travel pass tuition fees (up to 2.5 times the minimum wage) holiday cheque (up to the official monthly minimum wage per year of HUF 71,500) children’s school starting support (up to 30% of the minimum wage) meal ticket for restaurants only (up to HUF 18,000 per month) voluntary health insurance fund payments voluntary pension fund.

The following benefits will be subject to 54% personal income tax:    culture ticket meal ticket gift ticket.

The general corporate tax rate in Hungary. was also abolished at the same time.5m) in this year's central budget resulting from slower-than-expected growth. Any interest and royalty income (and dividends from low tax jurisdictions) received by Hungarian-resident companies will be taxable. Withholding tax: Hungarian withholding taxation on dividends paid out to corporate owners was generally abolished as of 1 January 2006. Excise duty on cigarettes and spirits is also likely to increase as part of the government's plan to raise taxes on items not connected to everyday necessities. A 50% tax deduction. since 2009 this tax is based on the vehicle's engine performance and the vehicle's age. Vehicle tax: In Hungary. on 1 January 2010 Hungary introduced a high withholding tax of 30% (this time on interest. 75 % of the interest income received from abroad will be deductible. this tax was based on the vehicle's weight and unofficially it was called a weight tax. under the same corporate tax regime as all the other regular income of those Hungarian-resident companies. in general. royalties and service fees) on payments directed at countries which have not entered into a DTT with Hungary. However. which used to be 16%. applied under certain circumstances in respect of gains on interest received from related parties. In general there is no Hungarian tax to be withheld from dividend.Gambling tax: Gambling tax could be set to rise in Hungary as part of a measure to fill a HUF 100bn gap (approx $483. as of 1 January 2010. However. while halting every expenditure that could be postponed by one or two years. . Before this so-called performance tax. royalty or interest payments made to corporate beneficiaries. from the corporate income tax base. under certain circumstances. increased to 19% and the 4% solidarity surtax was abolished on 1 January 2010.

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