In the summer of 2010, the record low corporate income tax (“CIT”) rate of 10% for up to a ceiling of HUF 500 million tax base was introduced. At that time, the Hungarian Government wanted to implement the reduced CIT rate for all companies; however, due to the worldwide economic crisis that of course also took its toll in Hungary, the Government’s planned budget did not allow for such a spending. Therefore, companies with a tax base equal or in excess of HUF 500 million were still subject to the standard CIT rate of 19%.
Two years after the introduction of the reduced CIT rate, Hungary’s PM Viktór Orbán has announced in a recent interview that the reduced CIT rate of 10% would be extended to all companies, independently of their tax base. This means that the reduced CIT rate would become the “standard” CIT rate. An exact date as when the bill introducing this tax change would be passed through Parliament has not been mentioned.