– Development Tax Allowances – In specific regions of the country,
corporate tax may be reduced by 10%, 30% or 50% of the value of
certain types of investments (up to 80% of the annual corporate tax
base).
– Tax incentives for small and medium-sized companies. Immediate
tax deduction may be available for the purchase of new fixed assets or
intellectual products for small to medium sized enterprises.
– Immediate tax deductions (up to 50% of pre-tax profit and
HUF10billion) for future significant asset purchases if the future
investment is financed from retained earnings tied in so-called
development reserve which is to be used up for investment into assets
in the subsequent 4 years. It is to be noted that this is not a permanent
tax saving but only a deferral, since the assets to be purchased from
development reserve cannot be depreciated for tax purposes (up to the
amount of the development reserve).
– Tax allowances are available to companies undertaking research
and development (R&D) activities via a reduction of the tax base for the
direct costs (including salaries) of basic research, applied research and
experimental development performed by the organisation itself. In
certain cases – for example, research performed in collaboration with the
Hungarian Academy of Science, institutions of higher education and/or
non-profit organisations, may treble the corporate tax benefit available
up to a maximum of HUF50m.
– A tax allowance for development is available for capital investments
between HUF100million and HUF6billion if certain conditions are met
(depending on the characteristics of the investment and the status of the
company that makes the investment).
