In line with the models applied in the English-speaking world, the granting of a stock option to a company’s manager, or to the members of its management team, is becoming increasingly widespread in Hungary too. A stock option not only gives the manager an incentive to increase the value of the company, but after exercising the option it also creates an opportunity for him or her to have a say in shareholder decisions. The regulations related to stock options in Hungary, however, carry a good deal of tax-related pitfalls. It pays to be aware of these when devising your stock option plan.

60, 59, 58, 55… this is how the number of taxes has changed in Hungary over the past 4 years. The trend is certainly encouraging, but behind the figures there are some more complex phenomena at play.

In today’s complex world, a growing number of lawsuits hinge on an expert’s opinion. So the matter of who testifies as an expert witness in your legal case does make a difference. Fortunately – due in no small measure to the new code of procedure – it is now possible to influence this.

A trendy investment product of recent years has been solar energy projects: under the feed-in tariff (FIT) scheme, the government guarantees what looks like a cash cow for all those who choose to seek their fortune in this sector. But as is usually the case, this money won’t just fall into your lap. Without the necessary professional expertise or the proper legal groundwork, solar power projects can easily run out of steam too.

The general meeting of a company can now lawfully amend its previously adopted resolutions. This is especially good news for those shareholders who wish to withdraw extra dividend from their subsidiary mid-year.

Due to an EU directive adopted last year, certain rules on corporate tax are changing with effect from 2019 – including the provisions on interest deduction due to “thin capitalisation.” Although the purpose of the directive was to defeat tax avoidance and tighten up the tax regulations, the new rules on interest deduction are actually becoming more of a blessing than a curse for businesses in Hungary.

The deductibility of the VAT content of incoming invoices has long been a source of consternation both for equity investors and for the holding companies heading up corporate groups. In a relaxation of the general ban on VAT deduction in these cases, the European Court of Justice (“ECJ”) has given ‘active’ holding companies a way around the restrictions. Meanwhile, other recent judgments by the Court have further expanded the opportunities for VAT deduction. Nevertheless, the ECJ’s decisions also show that it’s better to err on the side of caution.

“It’s such a good deal that it won’t last for long”, cried hundreds of business owners in response to the suggestions of setting up an ESOP. However, a bill recently adopted by the Parliament suggests that if a company uses this type of employee benefits scheme for its intended purpose, they should be able to count on it in the long term as well.