The corporate tax rate is
There are notable special taxes on banks, financial enterprises, insurance companies and for companies active in the energy sector.
Hungary introduced a IP scheme in 2003 including a provision according to which 50% of the pre-tax amount of the royalties received may be deducted from the tax base, thus reducing the effective corporate tax rate on such royalties from 9% to 4.5%. The legislation has been found to be BEPS compliant.
Hungary introduced transfer pricing legislation in 1992, in Section 18 of the Corporate and Dividend Tax Act (CDTA). Section 18 of the Hungarian CDTA prescribes the use of the arm’s-length principle (referred to as the customary market price) when setting the consideration associated with business contracts between affiliated companies. As an OECD member state the arm’s-length principle as defined in Article 9 of the OECD Model Tax Convention is the international transfer pricing standard to be used.
In 2003, a new subsection introducing transfer pricing documentation requirements was added to Section 18 of the CDTA. This provision was followed by more detailed regulations contained in Decree No. 18/2003 of the Ministry of Finance. In 2009, Decree No. 22/2009. (X.16) of the Ministry of Finance was published containing the changes of the documentation requirements pertaining to the determination of the arm’s-length price (the Decree). The amended Decree came into effect as of 1 January 2010, and is first applicable to the transfer pricing documentations regarding the 2010 tax year.