BEPS has changed the tax planning landscape
In the last 10 years, international tax planning went through major changes and as results, previously safe tax structures become liabilities for multinational companies. Stricter international tax regulations, new anti-avoidance rules and state-aid investigations are just some of the risks multinational groups are facing in their tax planning. Even pure equity holding regimes have become complex and expensive to maintain due to stricter controlled-foreign-company provisions, tighter anti-treaty-shopping rules and new substance requirements.
Over the past 20 years, Hungary has worked hard to provide a competitive tax system for foreign entities. Today, Hungary has become what the Netherlands and Luxembourg was in the previous few decades. Despite the changing environment, Hungary still offers a BEPS-proof and EU-compatible alternative for company groups, with little administration and at relatively low cost. As a result, Hungary is now an ideal country for locating international holding, financing and IP-licensing companies.
What does Hungary offer?
How to migrate?
Several options are available to restructure corporate groups to include a Hungarian company in the structure. It is possible to migrate the company’s tax residency to Hungary. Alternatively, it is possible to establish a new Hungarian company and restructure the group under it. Within the European Union, the Mergers Directive provides a safe and tax neutral way to do this.
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