As usual, the new year brings with it several changes to Hungarian tax law.
New types of corporate tax incentives are available for a starting investment of more than 6 billion HUF (approximately EUR 19 million) or job-creating investments of more than HUF 3 billion (approximately EUR 9.5 million) that are aimed at diversification of products or the innovation of procedures in a company.
Investments improving energy efficiency and those made into start-up companies are also supported through tax incentives (which have already been available since 2017). Similarly, as of 2017, Hungarian resident taxpayers may enjoy the most beneficial corporate tax rate (9%) in the European Union.
As part of the government’s programme to gradually decrease the financial burden of employment, the rate of social security contributions payable by the employer will be reduced from 22% to 19.5% from 2018. The minimum wage will be increased to HUF 138 thousand (approximately EUR 440).
After abolishing the earlier 10 per cent limit from 2018, all newly acquired shareholdings may benefit from the participation exemption rules if a shareholding is sold after a one-year holding period.