Hungary

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

16%

   
Tax rate on long-term capital gains The tax rate on long-term capital gains is 16%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Since January 1st, 2006, dividends paid to resident or non-residents companies are not withheld at source.
   
Tax rate on branches Branches are subject to general corporate taxation rules .




Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year.
   
Income tax rate The incomes of individuals are subjected to a progressive tax rate that varies between 18% and 38%.
Tax schedule 2004:
Income Rate
0 - 800 000 HUF 18%
800 001 - 1 500 000 HUF 26%
> 1 500 000 HUF 38%
   
Tax deductions or other allowances Tax deduction are allowed as
school fees, interests paid annually for the purchase of a house, and sums paid to charity sales.



VAT rates

Standard rates 20%
   
Reduced rates A 5% rate applies to textbooks and certain medical materials and supplies.
Financial services, health and education services, and leases of dwellings are exempt.



Other important taxes


Name of tax
Rate
Gifts and inheritance tax  
11 - 15%  
Tax on transfer of large patrimony  
2 to 6% for the housing and 10% for the rest of the patrimony.  


 

Accounting

Introduction
Accounting as in all ancient soviet countries is regulated by the Ministry of Finance and undergoes a big influence on behalf of the government.


General accounting principles
The balance sheet is presented into accounts with liabilities composed of constant capital and debts, because there is a distinction between long and short-term debts.
The profit and loss account gives priority to the repository of the global production and lets the choice of the cost classification either by nature or by function.

Obligations and publications
Companies have to produce a balance sheet, a profit and loss account and an appendix.

Certification and auditing
The external control of the accounts must be given to a body of external auditors chosen by the company.

Professionals and representative organizations
Accountants associations have some difficulties to get organized, because of the importance of the State in the accounting system.



Useful links
Business2hungary.com
Ministry of Finance
Tax Administration
Customs Administration

Last modified in January 2007
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