Group Corporate Taxability in Hungary as of 2019
As of January 2019 Hungary will introduce a new opportunity for merging the tax base of affiliated companies subject to Hungarian corporate tax. More information about the rules and benefits can be read in our newsletter.
Dear Clients! Dear Readers!
As of next year in Hungary it will be possible to create group corporate taxability for Hungarian corporate taxpayers, which will provide attractive tax planning opportunities. Below is a more detailed description of the conditions of entry and the expected benefits.
Who can choose the group corporate taxability?
Group corporate taxability can be chosen by companies, branches (or establishments of foreign companies without a branch),
- which on the basis of at least 75% of the voting rights are each other's affiliated enterprise,
- their balance sheet date and accounting currency are identical and
- they perform accounting according to identical accounting principles.
Why is it worth choosing it and what are the benefits?
Group corporate taxability might be chosen by the affiliated companies whose combined tax base would be less than the total amount of individually determined tax bases. This can be realized if loss-making companies or companies with tax relief join the group.
Further benefit can be achieved as the obligation to prepare transfer pricing records becomes avoidable if the transaction is performed between taxpayers belonging to the group. Regarding members outside the group it is also sufficient to prepare transfer pricing records by the group's representative.
The notification deadline for group corporate taxability is 15 January, 2019.
Provided the Hungarian taxpaying corporate meets the above conditions, our consultants will be happy to prepare calculations of the expected benefits of group taxability.
If this option has attracted your interest, our consultants will be glad to be of your assistance.
Kind regards,
ABT Treuhand Group
Date: 21. December 2018 | Topic:
The above summary is provided for information purposes only. We recommend that you consult our experts before making any decision based on this information.
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