Development allowances in Hungary
The cheap and skilled labour force, the bridge role between Western and Eastern Europe, the membership in European Union makes Hungary ideal site for investments. The investments are fostered by the government through subsidies on several titles, municipality allowances. Development allowance on corporate tax is a very important facilitator of investments in Hungary.
Extent of allowance
The extent of development allowance is 50% of the present value of the investment under 50 million EUR, and may be drawn up to 100% percent of the payable corporate tax. Investments exceeding 50 million EUR the allowance may be drawn at increased rate of the present value. The present value may include: - historical cost of physical means, - historical cost of invention, patent, software, license, know how. The historical cost shall be calculated as defined in Accounting Act. The allowance can be drawn in the year of the investment and in the subsequent 9 years.
Titles to drawn the development allowance
There are several titles to drawn development allowance. The allowance may be drawn if
- the present value of the investment exceeds 3 billion forint,
- the present value of the investment exceeds 1 billion forint and the investment is realized in one of the regions of Hungary defined in decree,
- the present value of the investment exceeds 100 million forint and the investment is separate environmental investment,
- the present value of the investment exceeds 100 million forint and the investment serves research and development,
- the present value of the investment exceeds 100 million forint and the investment serves only film producing.
The investment shall be put into operation and operated in order to drawn development allowance. The investment shall result establishment of new facility or enlargement of existing facility. Allowances exceeding 100 million EUR shall be applied to the Ministry of Finance. The application shall be filed preceeding the beginning of the investment. The general deadline is 60 days. The environmental consideration must be taken into account, the pollution emission must be under the values laid down in laws or defined in licenses. The separate environmental investment shall serve the reduction of pollution, protection of human health, preserving natural resources, etc.
Send this article in e-mail
illing our form You can send our article 'kvglaw' to Your friend or to Your own e-mail address.
If You want to send this article to Your own e-mail address, please fill the fields 'Your name' and 'Your e-mail address'.
If You want to send the article to one of Your friends, please fill 'Recipient's name' and 'Recipient's e-mail address' fileds.