Hun­gary to cut cor­po­rate tax rate to EU low

Kuwait Times - - BUSINESS -

BU­DAPEST: Hun­gary is seek­ing to lower cor­po­rate tax to nine per­cent start­ing from 2017, the low­est rate in the Euro­pean Union, Prime Min­is­ter Vik­tor Or­ban said Thurs­day.

“Next year, cor­po­rate tax will be set at a sin­gle, eq­ui­table fig­ure of nine per­cent, for small and medium en­ter­prises, and large cor­po­ra­tions alike,” he told re­porters in Bu­dapest. Hun­gar­ian com­pa­nies with a turnover of un­der 500 mil­lion forints (1.6 mil­lion euros, $1.7 mil­lion) cur­rently pay 10 per­cent of their earn­ings in tax.

Larger cor­po­ra­tions pay 19 per­cent. The de­ci­sion to lower taxes rates was taken on Thurs­day af­ter con­sul­ta­tions with Econ­omy Min­is­ter Mi­haly Varga.

“With these taxes, Hun­gary will of­fer the Euro­pean Union’s best fis­cal con­di­tions,” Or­ban said.

To date, Bul­garia, Ire­land and Cyprus have had the low­est cor­po­rate tax rates in the EU.

Varga said in a state­ment that the 2017 bud­get had been de­signed to ac­com­mo­date a short­fall of 145 bil­lion forints as a re­sult of the cor­po­rate tax re­form. “That means 145 bil­lion (forints) more will re­main in the pock­ets of cor­po­ra­tions. The re­serve fund of 200 bil­lion will be more than suf­fi­cient to cover this gap,” he added.

The Hun­gar­ian press said it feared the na­tion could be­come a tax haven. “If the gov­ern­ment’s aim is to at­tract multi­na­tion­als and in­vest­ments, ev­ery­one knows that these giants pay less at­ten­tion to cor­po­rate tax than to pay­roll taxes,” the In­dex.hu web­site said.

MONTELIMAR: Peo­ple walk past closed stored dur­ing a “Life­less town op­er­a­tion” (“Op­er­a­tion ville morte”) as store­keep­ers protest against the de­pop­u­la­tion of the city cen­ter and the con­struc­tion of a shop­ping mall in the out­skirt of the town yes­ter­day in Montelimar, south­east­ern France.

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