tag: tax planning

ESOP – the latest craze

István Csővári | 19 May 2017

ESOP (Employee Share Ownership Programme) entities have been springing up like mushrooms in Hungary since last year, and the acronym itself has become something of a buzzword. And this is hardly surprising, as ESOP entities can be a tax efficient vehicle for paying out work incomes. Caution is advised, however: alongside the many advantages, the regulations also conceal a number of pitfalls.

Hungary makes a brave move in international tax competition

Ádám Fischer | 14 December 2016

While Hungary has long been a preferred place in international tax planning, with a flat 9% corporate tax rate recently introduced, the country has arrived to the forefront of the competition. Adding also the absence of withholding taxes, the participation exemption both on portfolio holdings and intellectual properties, coupled with all benefits of an EU–compliant tax legislation, Hungary is destined to become a popular place for tax experts.

‘Au naturel’, or packaged within a company? – The dilemmas of buying property

Ákos Baráti | 10 November 2016

Back in the day, buyers and sellers were better off selling shares in a company with possession of the property, rather than the property itself; but over the years, legislators have chipped away steadily at the benefits of acquiring property through a company purchase. Contrary to common belief, however, buying real estate through a company can still bring a number of tax advantages; and the range of these is set to expand from January of next year.

After the facelift – here is the BEPS-proof Hungarian intellectual property tax regime

István Csővári | 18 August 2016

In order to bring Hungarian tax law in line with OECD’s recommendations delivered in “Action 5” of the “BEPS-package”, Hungary’s special tax regime on intellectual properties has been amended as of 1 July.

Luxembourg is deleted from the map of Hungary

István Csővári | 28 October 2015

The recent amendment of the Luxembourg - Hungary double tax treaty will result in a sharp decrease of Luxembourg-based schemes for Hungarian real estate transactions. Those groups which currently use such schemes for holding their Hungarian real estates will need to react fast.

The hidden treasure – many software developers do not exploit their tax benefit

István Csővári | 29 January 2015

Software developer companies fall under a very favourable corporate income taxation in Hungary. Moreover, their income is local business tax exempt. Surprisingly, however, most of such companies are not aware of their beneficial status, losing billions of forints as a consequence.

The 'letterbox' neither suffices for VAT

Tamás Fehér | 3 November 2014

International tax structures fail more and more often due to the lack of real economic presence. These days both foreign and Hungarian tax authorities analyse in detail whether a legal entity has real economic nexus to the country where it was established. While tax investigations in the past primarily focused on corporate income tax reassessments, a recent decision of the Court of Justice of the European Union (“ECJ”) pointed out that the lack of real economic presence may also entail significant VAT consequences.

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The law is constantly in flux. While many people may find this intimidating, for us it’s precisely what makes it so exciting. We’d like to share this attitude with businesspeople and managers, and with those who just have an interest in business law, in the form of a regularly updated blog that discusses the latest tax law and commercial law issues in an accessible style. Feel free to send your questions and suggestions for topics you’d like us to cover to blog@jalsovszky.com.

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