Hungary Proposes Improved R And D Tax Reliefs

12/02/2020

The Hungarian Ministry of Finance announced that the Government is considering further tax cuts for businesses, including improvements to the deductions available for research and development spending, following a meeting of the National Competitiveness Council.

According to the ministry, the proposal would enable companies to deduct five times their expenditure on qualifying research and development for local business tax purposes. This would be in addition to existing deductions for spending on R&D. Depreciation costs may also be added to the list of eligible costs that may be deducted from LPT taxable income.

Levied at local level, the local business tax is based on a company's total revenues, minus certain costs, at rates of up to two percent.

The National Competitiveness Council has also proposed abolishing the requirement for businesses to make advanced, estimated payments of their local business tax obligations, which are due each December. If approved, this change would apply from 2021.

Source: Pride Partners International