|DLA Piper Horváth & Partners Law Firm|
|Jalsovsky Law Firm|
|Katjár Takács Hegymegi-Barakonyi Baker & McKenzie|
Hungary has a reputation as a country with a developed and stable tax code but also as a country where new taxes and taxation requirements can arise with little warning, generating uncertainty for taxpayers in the jurisdiction and those looking to invest there. This is exemplified in its transfer pricing requirements, which have been in place since 1992, however are set to change with a suite of BEPS-inspired legislation at an unconfirmed date.
"It's one of the major hurdles to investing in Hungary, from the point of view of multinationals. The core of the tax system is relatively stable, and from the point of view of Hungary as a place to do business, it is improving. Although every new tax is maybe a step backwards, as it does cause some headaches for investors," said Gergely Riszter of Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie.
Hungary is expected to implement BEPS in full. "What we are expecting is that as a result of BEPS, the Hungarian government will within the next year, maybe two years, try to fully adapt to the BEPS regulations," said Riszter.
The approach of the Hungarian revenue authority has been characterised by taxpayers as aggressive. This perceived aggression is based on a principle of anti-abuse, but advisers said that outside of anti-abuse, the authorities have increasingly begun to adopt a co-operative, rather than aggressive approach to taxpayers' structures.
Taxpayers who do not adopt artificial or overtly aggressive transfer pricing stances can receive fair treatment from the authorities increasingly with good dialogue, despite their bureaucratic reputation.
National Tax and Customs Administration
Large Tax Payers' Directorate
1077 Budapest, Dob utca 75-81
Postal Address: 1410 Budapest, Post Box 137
Tel: +36 1 461 3300
(As of April 2016)
|Corporate tax||10/19% (a)|
|Branch tax||10/19% (b)|
Net operating losses (years)
Source: EY 2016 Worldwide Corporate Tax Guide