Tax benefits can be divided into 2 parts based on the corporate tax. The first of these is the development tax relief, up to 80% of the calculated tax. After that, all other tax reliefs can be claimed up to 70% of the calculated tax less the development tax relief, for example:
- Support for spectator team sports,
- Support for film production,
- Tax relief for small and medium-sized enterprises,
- Energy efficiency investment renovation allowance, and the
- Live music service discount.
Here are the most important tax reliefs for investments.
1. Development tax allowance:
In order to qualify for the tax allowance, the investment must be an initial investment which:
- implemented by an SME, or
- A large enterprise is created in the planning and statistical regions of Northern Hungary, Northern Great Plain, Southern Great Plain, Southern Transdanubia, Central Transdanubia, Western Transdanubia or Pest.
Before the planned start of the investment:
- Notifies the Minister responsible for tax policy of all the data specified in the Government Decree or
- in certain cases, submit the application for tax relief to the Minister responsible for tax policy in the form and content specified in the Government Decree
Development tax relief (80% limit) is available to taxpayers for the installation and operation of specific investments listed in the Corporate Tax Act. Such investments include.
- At present, the investment is worth at least HUF 3 billion,
- Investment for job creation,
- Investments with a value of at least HUF 1 billion in present value, installed and operated in the administrative territory of the beneficiary municipality,
- Investment of at least HUF 50 million in present value by a small enterprise
- In present value, an investment of at least HUF 100 million made by a medium-sized enterprise,
- In present value terms, an independent environmental investment of at least HUF 100 million,
- In present value terms, an investment of at least HUF 100 million for basic research, applied research or experimental development.
- Investments of at least HUF 100 million in present value, exclusively for film and video production
Duration of validity:
The taxpayer can claim the development tax credit for 13 tax years in the tax year following the year in which the investment is put into service and in the 12 tax years thereafter. An important condition is that the tax relief can be claimed after the submission of the application for the development tax relief, but no later than the 16th tax year of the application. It is therefore advisable to start claiming the tax credit in the fourth year following the notification at the latest.
2. Tax relief on interest on investment loans for SMEs:
This tax relief is available to taxpayers who qualify as micro, small or medium-sized enterprises (SMEs) on the last day of the tax year in which the loan or financial leasing contract is concluded. Tax relief may be claimed on the interest on a loan taken out from a financial institution for the purchase or production of a tangible asset and used exclusively for this purpose.
Tax relief amount: interest on the loan paid in the tax year. Condition for validation:
- The taxpayer has obtained a loan from a financial institution for the acquisition or production of a tangible asset, which loan is used exclusively for these purposes.
- The amount of the tax relief in this case (subject to the limits on the tax relief) is the amount of interest paid on the loan, which is considered de minimis aid
- The investment must be put into operation within 4 years of the year of conclusion of the loan agreement and may not be alienated in the tax year of its putting into operation and in the following 3 years!
- The taxpayer can claim the tax relief in the tax year in which the capital asset is registered on the last day of the tax year.
3. Tax relief for investment and renovation for energy efficiency purposes:
The taxpayer is also entitled to a tax reduction for the installation and operation of investments and renovations for energy efficiency purposes. The relief is first available in the tax year following the installation or, at the taxpayer's option, in the tax year of installation, and then for the following 5 years.
The relief is available up to a maximum of 70 percent of the calculated corporate tax within a tax year.
This rule applies to investments and renovations started after its entry into force. The amount of the tax relief may be a percentage of the eligible costs as defined by law, up to a maximum of HUF 15 million.
There is no minimum investment value requirement in the legislation.
The aid intensity for energy efficiency tax credits is 30 percent for large companies in the Budapest region and 45 percent in all other regions, which can be increased by 20 percentage points for small companies and 10 percentage points for medium-sized companies.
Eligible costs in % - For energy efficiency investments and renovations
