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Hungary: a good option for companies and bank accounts. LAVECO

Tuesday, 13 December 2016

Hungarian corporate tax rate -10%

Type of company

Kft. – Limited Liabiliy Company

Similar to German GmbH

 Registration

1.Owners and Director sign formation documents in front of lawyer

2.Lawyer submits papers to court of registration electronically

3.Process takes approximately 1 week

Capital

  • Initial capital: min. 3 000 000 HUF
  • Must be paid up.

Owners

  • Ownership set down in M&A
  • No share certificates are issued
  • Corporate owners allowed (including foreign companies)

Registered office

Each company must have a registered office.

Bank account

  • Hungarian companies must open at least one bank account in Hungary within 15 days of registration
  • Signatories must be present in person
  • Can also open accounts abroad

Accounting

  • New companies must register with the tax authorities
  • Annual accounts must be filed by a qualified accountant
  • They must also register for VAT
  • They can apply for an EU VAT number at the same time

Auditing

Required if:

  • The company turnover exceeds 300 000 000 HUF for two consecutive years

OR

  • The company has more than 50 employees

Taxation

  • 10% on profits up to 500 000 000 HUF approx. 1 600 000 EUR
  • 19% on profits over 500 000 000 HUF
  • + Local municipality tax – 2% on profits
  • Dividends - 0% tax on incoming and outgoing dividends
  • Intellectual property – 50% discount on taxation of intellectual property (5/9%)

Capital gains

  • 10% up to 500 000 000 HUF
  • 19% above 500 000 000 HUF

Interest

  • 10% up to 500 000 000 HUF
  • 19% above 500 000 000 HUF

Hungarian company – the advantages

  • EU membership
  • Low corporate tax
  • EU VAT number can be obtained relatively easily

Hungarian company – the disadvantages

  • Relatively high paid up capital
  • Very high standard rate VAT

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