Tax Benefit for Start-up Companies
The National Intellectual Property Office (hereinafter referred to as „HIPO”) keeps a record of start-up companies and companies that support start-up businesses in Hungary.
The registration by the HIPO is a precondition of the tax benefit of section 7 of Act. LXXXI. of 1996 on corporate tax law.
According to the referred act, the investment can reduce the corporate tax base by three times the cost of a share acquired in a start-up company up to the amount of 20 million HUF in one tax year. The discount can be used in the tax year of the acquisition until three tax years thereafter.
Conditions for the tax benefit according to Government decree 331/2017. (XI. 9.):
Neither the investor, nor its predecessor or any affiliated company was the member of the start-up company within three tax years before the acquisition;
- The investor and the start-up company must have a registration number issued by HIPO;
- The start-up company must be established within three calendar years from the date of the submission of the application for registration to HIPO;
- The annual sales income of the start-up company does not exceed 100 million HUF preceeding the submission of the application to HIPO;
- The number of employees of the start-up company is at least two and maximum twenty persons in the business year preceding the application for registration at HIPO;
- Venture capital fund manager did not invest in the start-up company;
- The start-up company has no share in another business association;
- The activity of the start-up company meets the conditions of Act LXXVI of 2014 on Scientific Research, Development and Innovation;
- The start-up company and the investor have no tax arrears.
For more information on this matter, please contact FirmaX Hungary, your business partner in Hungary!
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