المدونة

How does the 9% corporation tax rate affect your business?

فبراير 14, 2017 المحاسبة والمالية, تأسيس الشركات, تخطيط الأعمال, تصريح الإقامة, هجرة الأعمال

Whether you already have a company in Hungary or you are planning to register one, this information on the corporation tax rate is crucial to understand your finances in 2017.

Changes to the corporation tax rate in 2017

From the 1^st of January 2017, Hungary has lowered its corporation tax rate to 9%, making it the lowest business tax in Europe. During the previous system until the end of 2016, the government taxed companies at a rate of 10% on profits up to HUF 500 M (EUR 1.7 M) and 19% on profits above that threshold. Now a single band has been introduced applying equally to all businesses with a flat rate of 9%.

The new corporation tax rate has a great impact on the finances of small businesses, but has brought an even larger tax reduction for large corporations, as seen in the chart below:

For small businesses	Profit before taxes under 1,6 M EUR
	2016	2017
Revenue	EUR 650,000	EUR 650,000
Costs	EUR 520,000	EUR 520,000
Profit before taxes	EUR 130,000	EUR 130,000
Corporation tax	EUR 13,000	EUR 11,700
Taxes reduced by		EUR 1,300

And…

For big corporations	Profit before taxes above 1,6 M EUR
	2016	2017
Revenue	EUR 8,000,000	EUR 8,000,000
Costs	EUR 6,300,000	EUR 6,300,000
Profit before taxes	EUR 1,700,000	EUR 1,700,000
Corporation tax	EUR 177,839	EUR 153,000
Taxes reduced by		EUR 24 839

As you can see, the more profit your corporation makes, the more you can save on operation your company in Hungary.

Added value from Helpers

Helpers Hungary offers comprehensive solutions for setting up and managing Hungarian businesses, specializing in assisting international entrepreneurs and businessmen. Contact us for further information and let our tax advisors assist you with better understanding your corporate finances in Hungary.

Do you want to know more about taxation in Hungary? Do you need a reliable accounting partner? Do you need help setting up your own company in Hungary? Contact us at info@helpers.hu or call our office on +36 1 317 8570 to receive a free consultation.

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