The Tax amendments announced by the Minister of Economy of Hungary were submitted to the parliament on 5 December 2016. According to the proposed amendments the corporate income tax rate will be reduced as the current progressive rates of 10% and 19% will be replaced with a flat rate of 9% from 1 January 2017.
Accordingly the effective rate applicable to CFCs will be reduced from the 10% to 9% effective from 1 January 2017.
The rate of small business tax (KIVA) will be reduced to 14% from current rate of 16% and this replaces the corporate income tax, social security tax and vocational training contribution. This rate of KIVA will further be reduced to 13% as from 2018.
The social security tax rate will be reduced to 22% from current rate of 27% from 1 January 2017 and this will further be reduced to 20% from 2018.
Also, the health care contribution will be reduced to 22% from current rate of 27% applicable from 1 January 2017 and this will further be reduced to 20% from 2018.
