- Nowadays, working with offshore companies is becoming increasingly difficult and sometimes impossible, and as a result it is now necessary to choose between various jurisdictions which offer relatively low tax rates. One such country is Hungary.
- Hungary offers the LOWEST RATE of corporation tax in the EU – 9%.
- In addition, the tax on dividends (both received by and paid by the company) is 0%. The exception to this is dividends received from companies registered in low-tax countries, i.e. offshore jurisdictions, in which case the dividend tax is 9%.
- Such preferential tax rates make Hungary a unique country for the registration of companies within the EU. An additional «bonus» is that Hungary does not sound “offshore” and is accepted without question as a partner by any company in the world
Advantages of Hungary
- Low income tax – 9%;
- Tax on dividends – 0%;
- Tax rebates on income from certain types of intellectual property;
- Possibility to open a current bank account in Hungary (company + account in one country) relatively quickly, even if the owners and directors of thec ompany are non-residents;
- Automatic receipt of Hungarian and European VAT numbers;
- Full EU membership;
- A wide network of treaties for the avoidance of double taxation;
- The company is considered tax resident in Hungary through registration, regardless of the place of management.
Disadvantages of Hungary
- The existence of a municipal tax (0% to 2% on profit);
- High level of VAT – 27%;
- High level of social contributions to employees (23%);
- The company’s initial capital must be paid up.
Such preferential tax rates make Hungary a unique country for the registration of companies in the EU. An additional “bonus” is that Hungary does not sound offshore and is accepted without question as a partner by any company in the world.