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Act LXXXI of 1996
on Corporate Tax and Dividend Tax
Having regard to securing the revenues necessary for discharging government functions, to improving the
operational environment for businesses, as well as to im plementing certain requirements stemming from Hungary’s
accession to the European Communities, Parliament has adopted the following Act on corporate taxation:
PART ONE
GENERAL PROVISIONS
Chapter I
Basic Principles
Section 1
(1) In the Republic of Hungary, corporate tax liabilities payable under this Act on the revenues obtained from
economic activities performed for profit on a regular basis and other similar gainful activities (hereinafter referred to
as “business operations”) shall be complied, pursuant to the provisions of this Act, with due regard to the
constitutional directive stipulating contri bution to public expenditures, taking also into account the provisions of the
Act on the Rules of Taxation. (2) Any rule, tax incentive (tax relief, tax allowance) which affects tax liability or the amount of taxes, or that
results in the reduction of taxes may be used and/or claimed to the extent that the essence of the transaction to which
it pertains or other similar action manifests the purpose of the rule or tax allowance. The burden of proof as to
applicability or enforceab ility lies with the party in whose interest it stands. If the nature or substance of the
transaction suggests that the sole purpos e of the transaction is to obtain a tax advantage in favor of any or all parties
concerned, the costs and expenditures charged on the basis of such transaction shall not be treated as ordinary
business expenses, i.e. that have been paid or incurred in the course of business, and no tax allowance may be
claimed. (3) Where costs and expenditures, as well as the reduction (increase) of pretax prof it, or the claiming of tax
exemption or tax relief are to be taken into account on the same grounds, but under different entitlements as
prescribed by this Act, it may (shall) be claimed only once, unless any provision of the law expressly refers to the
application of such on several occasions. (4) Where an international agreement promulgated by an Act or Government Decree stipulates any derogation
from this Act, they shall override the provisions of this Ac t. Derogation from this Act is also permitted if there is
reciprocity, provided that this does not result in further tax liabilities on the part of the taxpayer when compared to
those defined by the provisions of this Act. Reciprocity shall be determined by the minister in charge of taxation
(hereinafter referred to as “minister”). (5) This Act shall be interpreted according to and in acc ordance with the provisions of the Accounting Act. Any
deviation from the pr ovisions of the Accounting Act in order to receive a true and fair view shall not be permitted to
result in lower tax liabilities.
Persons Subject to Corporate Tax
Section 2
(1) The persons defined in Subsections (2)- (4) shall be subject to corporate tax.
(2) The following resident persons shall be deemed resident taxpayers:

a) business associations (including nonprofit business associations), groupings and European public limited-
liability companies (including European holding companies), and European cooperative societies;
b) cooperative societies;
c) public companies, trusts, other state-controlled economic organizations, special purpose entities, and
subsidiaries;
d) law offices, court bailiffs’ offices, patent agencies, notary’s offices, and forest management associations;
e) Employee Stock Ownership Plans (hereinafter referred to as “ESOP”);
f) water management associations,
g) foundations, public foundations, non-governmental organizations, public bodies, religious organizations
(including any organizational units of such organizations vested with legal personality in the bylaws or charter
document), housing cooperatives, and voluntary mutual insurance funds;
h) institutions of higher learning (including the institutions they have established), and student hostels;
i) European groupings of territorial cooperation.
j) sole proprietorships.
(3) Any nonresident person whose principal place of busin ess management is in Hungary shall be treated as
resident taxpayer. (4) Foreign nationals shall be deemed taxpayers, as well as nonresident entities whose head office is located
abroad: a) if they carry out business operations at their branches in Hungary, provided that they are not considered resident
taxpayers due to the location of their head office (herei nafter referred to as “nonresident entrepreneurs”);
b) if they receive any interest, royalties or service charges from legal persons or unincorporated business
associations, partnerships or other organizations established according to Hungarian laws, except if the state where
the foreign national is a resident or where the said nonre sident entity is established has an agreement on double
taxation concerning the income and wealth tax system with the Republic of Hungary (hereinafter referred to as
“nonresident organization”); c) if they obtain any income through the transfer or withdrawal of participa ting interest in a company with real
estate holdings (hereinafter refe rred to as “member of a company with real estate holdings”).
(5) The bodies listed in Schedule No. 5 are not subject to corporate tax.
(6)-(7)
Total and Limited Tax Liability
Section 3
(1) The tax liability of resident taxpayers shall apply to their income from Hungary and from abroad, both (total
tax liability).
(2) The tax liability of nonresident entrepreneurs shall ap ply to their income from business operations performed
in their Hungarian branches (limited tax liability).
Definitions
Section 4
For the purposes of this Act:
1.
1/a.
2. ‘taxpayer’ shall mean the resident and nonresident persons specified in Subsections (2)-(4) of Section 2, other
than those defined in Subsection (5) of Section 2; 3. ‘identical job’ shall mean the vocations deemed id entical according to the Foglalkozások Egységes Osztályozási
Rendszere (FEOR) (Standard Classification of Occupations) issued in KSH Bulletin No. 9006/1996 (SK 12.),
effective as of 1 January 1997; 4. ‘revenue’ shall mean:
a) net sales revenues, as defined in the Accounting Act, less any consumption tax and excise tax associated with
production, operations, service and sales activities, that ar e not shown under the costs of self-manufactured stocks,

b) in terms of credit institutions and financial companies, interests earned and similar income, less interest paid
and similar charges, and increased by revenues from othe r financial services and net sales revenues from activities
other than financial investment services, c) in terms of insurance companies, the revenues from insurance services plus net operating expenses, expenses of
insurance services from investments (only in the life insura nce branch), other expenses of insurance services, the net
revenues from investments and the revenues of non-insurance activities added; less the dividends and shares
received, the adjusted revenues from own real estate properties used for own purposes, the amount claimed as
interest expense in the purchase pri ce of interest-bearing securities, and th e amount shown under expenses charged
against the Damage Compensation Account, d) in terms of investment firms, the revenues from investment services plus the revenues from non-investment
service activities, plus interest receivable and similar in come; less the amount claimed as interest expense in the
purchase price of interest-bearing securities, e)
4/a. ‘bad debt’ shall mean any claim that is considered irrecoverable according to the Accounting Act, as well as
20 per cent of the historical cost of a claim that is not settled within 365 days of the payment due date, with the
exception of claims shown under receivables that cannot be enforc ed in court or under barred claims;
5. ‘notified share’ shall mean a share of at least 30 per cent and above in the capital of a legal person or business
association lacking the legal status of a legal person established according to Hungarian laws, and in any foreign
person (other than a controlled foreign company), provided that the taxpayer notifies the tax authority concerning the
acquisition of this share w ithin thirty days; no application for continuation sha ll be accepted upon the taxable
person’s failure to meet the above-sp ecified deadline for notification; notifi cation of a share above 30 per cent may
be submitted only if the taxpayer has previously notified his share of at least 30 per cent to the tax authority;
6. ‘domestic territory’ shall mean the territory of the Republic of Hungary including customs free zones and transit
areas; 7. ‘domestic person’ shall mean the legal persons estab lished under Hungarian law, business associations lacking
the legal status of a legal person, partnerships, other organi zations, as well as private individuals regarded as resident
in accordance with the Act on Personal Income Tax;
8. ‘total investment cost’ shall mean the cost of a tangible asset until the time of installation;
9. ‘beneficiary of tax incentives granted for investment projects’ shall mean the party putting an investment
project into operation; ‘starting date of the investment project’ shall mean the date of commencement of construction
works or the date when the first tangible asset is received within the framework of such project; with regard to tax
incentives granted for construction and regional investment projects: a) ‘machinery’ shall mean machines an d equipment classified in the Harmonize d System (hereinafter referred to as
“HS”) customs tariff code (hereinafter referred to as “heading”) falling under headings 8405-8408, 8410-8430, 8432-
8447, 8449-8465, 8467, 8468, 8474-8485, 8508, 8515, 8701 , 8709 and 8716 HS, electric apparatus falling under
headings 8501, 8502, 8504-8507, 8511-8513, 8530, 8531, 8535-8537, 8539, 8543-8548, 9006 and 9405 HS, boilers
falling under heading 8403 HS and steam generation equi pment falling under heading 8402 HS, as well as any
technical equipment consisting of combinations of the aforementioned for performing complex work processes, b) ‘building’ shall mean a permanent structure attached to the ground (by way of foundation) or by way of altering
the natural properties or the natural geological formation of the ground, which can only be detached from the ground
only if dismantled or taken apart, which however makes it unsuitable for serving its original function; any water,
electricity, gas and sewage lines, central heating, ventila tion, air exchange, air-conditioning equipment and elevators
that are incorporated into the building structure to provide the necessary supplies for servicing the building shall be
considered parts of the building; su ch lines, equipment and accessories shall be included as part of a building
structure if, in addition to providing the essential supplies for serviceability, are also serving technological purposes,
or if built into an existing structure subsequently, c)
d) ‘investment project for production purposes’ shall mean any new building or equipment purchased and put into
operation by the taxpayer for producing industrial or agricultural products, whereby the operating cost represents a
part of the direct cost of the product, e) ‘infrastructure investment’ shall mean any new building or equipment purchased and used for transporting
goods or passengers by rail, road or water; producing and supplying drinking water; or providing sewage and waste
treatment, public hygiene or telecommunications services (ÉJ 11, ÉJ 21, ÉJ 31, ÉJ 41, ÉJ 53, ÉJ 61, falling under ÉJ
55, falling under ÉJ 71 and falling under ÉJ 91, furthermore machines and equipment falling under headings 8401,
8405-8408, 8410-8430, 8432-8447, 8449-8465, 8467, 8468, 8474-8485, 8508, 8515, 8701, 8709 and 8716 HS,
electric apparatus falling under headings 8501, 8502, 8504-8507, 8511-8513, 8530, 8531, 8535-8537, 8539, 8543-

8548, 9006 and 9405 HS, and boilers falling under heading 8403 HS and steam generation equipment falling under
heading 8402 HS); 9/a. ‘financial statement’ shall mean the report prepar ed according to the Accounting Act or other regulations
adopted under its authorization, with the exception of the consolidated annual reports; 10. ‘designated organization’ shall mean a business asso ciation, cooperative society (exclusive of housing
cooperatives) and special purpose entities designated as such for the full tax year by the minister;
10/a. ‘recognized exchange’ shall have the meaning defined in Act CXXXVIII of 2007 on Investment Firms and
Commodity Dealers, and on the Regulations Governing their Activities;
11. ‘controlled foreign company’ shall mean foreign persons and nonresident entities whose head office is located
abroad (hereinafter referred to as “non resident company”), in which there is a beneficial owner who is considered a
resident according to the Personal Inco me Tax Act concerning the majority of the nonresident company’s tax year
(hereinafter referred to as “share-holder”), as well as the nonresident company whose revenues for the tax year
originate from Hungary for the most part, in either case if the quotient of the tax amount paid (payable) by the
nonresident company for the tax year – less any tax refund – and the tax base [in the case of group taxation
arrangement the amount of tax paid (payable) at group level, less any tax refund, and the tax base] is less than two-
thirds of the percentage rate defined in Subsection (1) of Section 19 or the nonresident company did not pay any tax
equivalent to corporate tax on account of its tax base bein g zero or negative, even though it has made a profit. This
provision shall not apply if the nonresident company in question is established or is a resident of a Member State of
the European Union, a Member State of the OECD, or a St ate with which the Republic of Hungary has an agreement
on double taxation and in which state the said nonresident company maintains real economic presence, where:
a) ‘real economic presence’ means when a nonresident company is engaged in gainful activities in another state –
together with its affiliates established in that state, where applicable -, such as in manufacturing, processing,
agricultural, service, investment and trading activities, using its own equipment and own workforce, where their
revenues from such activities represent at least 50 per cent of all revenues; burden of proof of the said real economic
presence shall lie with the taxpayer; b) investing activities are the acquisition, holding and dispos al of long-term investments in equity securities and
debt securities, as well as the investments made by and the activities of funds, companies and other bodies operating
in any State under the regulations of that State pertaining to securities and investment services, authorized by the
competent authorities exercising supervision of financial servi ces and investment services in that State, furthermore,
the investments made by and the activities of funds, comp anies and other bodies managed by a professional fund
manager authorized by the competent authorities of a State, or established in that State;
c) if the balance sheet total or the tax base is zero or nega tive, the amount of the tax equivalent to corporate tax
according to the laws of the foreign stat e shall reach two-thirds of the tax rate defined in Subsection (1) of Section
19;
d) the nonresident company’s tax year shall be understood as the last tax year ending on or by the last day of the
share-holder’s tax year; e) these provisions shall apply to any fixed establishment of the nonresident company located in a state other than
where the said company is established or in which it is a resident; f) for the purposes of this provision, beneficial owner shall mean a private individual who controls – directly or
indirectly – at least ten per cent of the voting rights or the capital of the nonresident company, or has a dominant
influence by definition of the Civil Code of the Republic of Hungary (hereinafter referred to as “Civil Code”);
g) any nonresident company in which a person that is listed on a recognized exchange for a period of not less than
five years effective on the first day of the tax year, or its affiliated company holds a share of at least 25 per cent on
each day of the tax year shall not be reco gnized as a controlled foreign company.
12. ‘preliminary or auxiliary activities’ shall mean activities carried out exclusively for a foreign person which are
outside the scope of activities of such foreign person as defi ned in its memorandum of association, yet it facilitates or
helps to make preparations for the performance of the activities contained therein; 13.
14.
15. ‘construction completion date’ shall mean the day on which the occupancy permit or continuation permit
becomes operative; in respect of subcontractor s, the day when his activities are completed;
16. ‘construction commencement date’ shall mean the day of commencement of works indicated in the
construction or installation journal; in respect of subcontr actors, the starting date indicated in the construction or
installation journal;
16/a. ‘average statistical number of employees’ shall mean the average number of employees calculated on an
annual basis in accordance with the guidelines in effect on the first da y of the tax year, published by the Central

Statistical Office for data disclosures for employment statistics. Hired out employees may be counted by the user
enterprise if they are not counted by the temporary employment company and the user enterprise is provided with a
written statement to this effect by the tax return deadline; 17. ‘independent representative’ shall mean a person economically and legally independent of the taxpayer whose
business is to provide representation to the taxpayer; if the representative is engaged in any activities that fall within
the taxpayer’s scope of activities, it shall not be recognized as ordinary course of business; a representative shall not
be deemed independent, if he carries out his business operations based on the instructions or under the complete
control of the taxpayer, or if risks are assumed by the taxpayer rather than by the representative;
18. ‘real estate property’ shall mean land and all physical property attached to it;
18/a. ‘company with real estate holdings’ shall mean any taxpayer where:
1. the market value of the Hungarian r eal estate property shown on balance sheet date represent more than 75 per
cent in the (total) value of the assets shown on the aggregate in the taxpayer’s annual account or in the annual
account of a resident taxpayer including if – collectively with its nonresident affiliated company (hereinafter referred
to as “group”) – holding a real esta te property located in Hungary, and
2. any member (shareholder) of the taxpayer or any member (shareholder) of either company of the group held
resident status on at least one day of the tax year in a State with which the Republic of Hungary has no agreement on
double taxation or the agreement provides fo r the taxation of capital gains in Hungary,
where a) annual account means the financial statem ent prepared for the tax year by 31 May of the calendar year (initially
2011),
b) the taxpayer is to apply residence status relying on the statement supplied by the member (shareholder) in
question, or in the absence of this statement the condition referred to in Point 2 shall be presumed to have been
realized, c) the taxpayer is liable to communicate the information required for determining the percentage the real estate
property represents to all its affiliated companies within the group by 31 July of the calendar year,
d) these provisions shall not apply if the taxp ayer is listed on a recognized exchange,
e) these provisions shall not apply if the taxpayer, nor any nonresident member (shareholder) of the affiliate within
the group did not alienate and did not withdraw (in part or in w hole) his share during the calendar year preceding the
time when the information referred to in Paragraph c) is to be provided.
19. ‘industrial park’ shall mean a confined area with the necessary infrastructure that has been developed for
commercial and business purposes under conditions defined by law and has been classified as an “industrial park” in
a tender procedure;
20. ‘royalty’ shall mean any consideration recei ved by the rightholder for the transfer of:
a) a patent, industrial design and other protected intellectual works and know-how exploitation rights,
b) a trade mark, or the right of use of a trade name or trade secret,
c) right of use of authentic works protected by the Copyright Act and rights related to copyright, and
d) rights of use related to protected industrial designs and other copyrighted articles mentioned in Paragraphs a)
and c); 21. ‘income’ shall mean the amount defined as the tax base in this Act;
22.
23. ‘affiliated company’ shall mean:
a) the taxpayer and the person in whic h the taxpayer has a majority control – whether directly or indirectly –
according to the provisions of the Civil Code,
b) the taxpayer and the person that ha s majority control in the taxpayer – whet her directly or indirectly – according
to the provisions of the Civil Code,
c) the taxpayer and another person if a third party has majority control in both the taxpayer and such other person –
whether directly or indirectly – accord ing to the provisions of the Civil Code, where any close relative holding a
majority control in the taxpayer and the other person shall be recognized as third parties;
d) a nonresident entrepreneur and its domestic place of business and the busine ss establishments of the nonresident
entrepreneur, furthermore, the domestic place of busine ss of a nonresident entrepreneur and the person who
maintains the relationship defined under Paragraphs a)-c) with the nonresident entrepreneur;
e) the taxpayer and its foreign branch, and the taxpayer’s foreign branch and the person who maintains the
relationship defined under Paragraphs a)-c) with the taxpayer;
23/a. ‘preferential transformation’ shall mean the formation of a new company (including by merger and
demerger), where both the predecessor and the successor are corporations (Point 32/a), if

a) the members or shareholders of the predecessor company are provided cash payment not exceeding 10 per cent
of the aggregate nominal value of the new shares is sued by the successor company in connection with the
transformation or, where the shares have no nominal value, the percentage they represent in the subscribed capital,
and b) in the case of demerger, the members or shareholders of the predecessor company are provided a proportionate
share in the capital of the successor companies,
c) merging with the sole proprietor or shareholder of a single-man company;
23/b) ‘preferential transfer of assets’ shall mean an operation whereby a company (the transferring company)
transfers – without going into dissolution – one or more of its strategic business units to another company (the
receiving company) in exchange for an interest incorporating the receiving comp any’s issued share capital. ‘Strategic
business unit’ shall mean all the assets and liabilities (incl uding accrued expenses and deferred income) of a division
of a company that, from an organizational point of view, constitute an autonomous unit capable of functioning on its
own, relying on its own assets and means; 23/c. ‘preferential exchange of shares’ shall mean an operation whereby a company (the acquiring company)
acquires an interest in the issued capital of another compan y (the acquired company) in exchange for issuing to the
member (members) or shareholder (shareholders) of the latter company – in exchange for their securities – securities
representing the issued capital of the former company and, if applicable, making a cash payment not exceeding 10
per cent of the nominal value or, in the absence of a nom inal value, of the accounting par value of the securities
issued in exchange, provided that th e acquiring company obtains a majority of the voting rights in the acquired
company, or shall increase it if alread y held a majority of the voting rights before the transaction took place;
23/d. ‘aid provided to small and medium-sized enterprises under the Commission Regulation on State aid’ shall
mean aid provided pursuant to Articles 1-13 of Commission Regulation (EC) No. 800/2008 of 6 August 2008
declaring certain categories of aid compatible with the common market in the application of Articles 87 and 88 of the
Treaty (General block exemption Regulation); 24. ‘micro, small and medium-size enterprise’ shall mean the companies defined as such in the Act on Small and
Medium-sized Enterprises and the Support Provided to Such Enterprises, including law firms, court bailiffs’ offices,
patent agencies and notaries’ offices, if they comply with the requirements set out in the said act; the micro
enterprises referred to in the said act sha ll also be treated as small enterprises;
24/a.
25. ‘interest representation organization of employers and employees’ shall mean an organization or federation of
organizations registered by the court as a non-governmental organization, whose principal activity is to represent the
interests of employees or employers as laid down in its by laws, and that is a member of the National Council for the
Reconciliation of Interests, including the county, re gional or trade branches of such organization;
26. ‘adjusted book value’ shall mean the value of r eceivables adjusted according to the relevant accounting
regulations, shown as an addition to the pre-tax profit, mi nus the sum shown as a deduction from the pre-tax profit;
27. ‘foreign person’ shall mean a legal person, business association lacking the legal status of a legal person, a
partnership and any other organization established under foreign law;
28.
28/a. ‘national interest representation organization’ shall mean a federation of non-governmental organizations
registered by the court as a non-governmental organiza tion, the members of which represent the interests of
employees or employers on the basis of their bylaws and charters, provided that the union or its members have at
least ten local chapters with legal personality in different counties; 29. ‘total revenue’ shall mean all revenues shown in the financial statement on the tax year (or failing this as
shown in the closing accounti ng statement for the tax year) comprising net sales revenues, other income, income
from financial operations, and extraordinary income;
30. ‘First-time employee’ shall mean a person entering into an employment relationship whether under contract of
employment or under some other form of legal relationship for the first time within one calendar year upon
conclusion of his studies in the regular daytime course of a secondary educational institution of the school system or
in an institution of higher education; 31.
31/a. ‘adjusted book value’ shall mean the cost of inta ngible assets and tangible assets, less any depreciation
deducted from the tax base, plus the readjusted amount of extraordinary depreciation claimed in the tax base; 31/b. ‘person’ shall mean resident and nonresident persons, and private individuals;
31/c. ‘passenger car’ shall mean any motor vehicle equipp ed with three or four wheels with a passenger capacity
of no more than eight adults, including the driver, with the understanding that petrol or diesel powered vehicles,
electric vehicles, gas powered vehicles, race cars and caravans (mobile homes) ar e also included in this category.

Multi-purpose motor vehicles with a gross weight of less than 2,500 kilograms (passenger cars with oversized cargo
space) whose factory-designed cargo sp ace can carry more than two passengers, with seats that can be simply
removed at any given time to transform the cargo space behi nd the cabin wall for carrying goods, including when the
removal of the seats is accomplished by i rreversible technical conversion, shall also be regarded as passenger cars;
32. ‘software developer’ shall mean a private individual holding a university or college degree, involved in the
design, research and development of software, data banks, databases, expert systems, robotics and decision-making
models, and is writing, testing and analyses programs and routines for the operating systems of computers in
connection with the above activities; 32/a) ‘corporation’ means a business association, profession al association and, effective as of the operative date of
the Act promulgating the treaty on the accession of the Republic of Hungary to the European Union, any corporation
domiciled in a Member State according to the tax laws of that state
a) that does not have a domicile in a non-member state under the provisions of a valid international agreement on
income tax and wealth tax to which the said non-member state is a party, and b) it operates in a form governed in the Council Directive on the common system of taxation applicable to
mergers, divisions, transfers of assets and exchanges of sh ares concerning companies of different Member States or
in the Council Directive on the common system of taxation applicable in the case of parent companies and
subsidiaries of different Member States , and is taxable under these directives without the possibility of having an
option or being exempt; 33. ‘place of business’ shall mean:
a) a permanent business establishment, equipment, and accesso ries that is used by the taxpayer in whole or in part
for business activities irrespective of the taxpayer’s entitlement to use them; the term ‘place of business’ shall cover,
in particular, the place of management, representative offices established with a registered office in Hungary, offices,
factories, plants, workshops, mines, crude oil or natural gas wells, and other facilities used to explore or exploit
natural resources, b) site of construction or assembly operations (hereinafter referred to collectively as “construction site”), including
supervisory activities related thereto, if such construction continues for a total of at least three months (with or
without interruption) with regard to individual construc tion sites irrespective of whether such activity is based on
several independent contracts or whether it was commi ssioned by several parties; any construction project
constituting one unit from an economic, business and geogr aphical point of view shall be recognized as one
construction site, c) a foreign person shall be regarded as having a place of business in case of the direct utilization of natural
resources in Hungary, d) a foreign person shall be regarded as having a place of business in cases of the utilization of any real estate
property or natural resources in return for consideration, the transfer, sale and contribution in kind of any rights in
immovables or in natural resources (hereinafter referred to as “utilization of real estate”) in return for consideration,
e) a foreign person shall be regarded as having a place of business, unless he performs only the activity specified
in Paragraph g) below, in the case of activities which are undertaken by other foreign or resident persons on behalf of
such foreign person, if they are entitled to enter into a c ontract in Hungary on behalf of the foreign person and
exercise such right on a regular basis, or maintain stocks of commodities or products from which they regularly make
deliveries on behalf of the foreign person,
f) without prejudice to the above provis ions, a foreign person shall be regarded as having a place of business if
another person takes out insurance on behalf of such foreign person – with the exception of reinsurance and the
provisions of Paragraph g) notwithstanding – for risks occurring in Hungary, g) the following shall not be construed as a place of business:
1. establishments used exclusively to store and present the goods or products of a foreign person,
2. stockpiling of goods and products of a foreign person exclusively for storage, presentation and processing by
another person, 3. establishments maintained exclusively for purchasing commodities and products or collecting information for a
foreign person, 4. establishments maintained exclusively for carrying out preliminary or auxiliary activities,
5. activities carried out by an independent representativ e (including commission agents), if acting within the
framework of his ordinary business activities, h) a foreign person shall be regarded as having a place of business if engaged in business operations through a
branch;
34. ‘natural resources’ shall have the meaning defined in the Act on the General Rules of Environmental
Protection;

34/a. ‘non-operational property’ shall mean the real estate property that is not directly connected to the taxpayer’s
business operations, in particular, any dwelling within the business premises, and the buildings and engineering
structures used in principle for the purposes of betterment;
35. ‘place of management’ shall mean the place where management governs the operations of the company;
36. ‘motion picture authority sponsorship certificate’ shall mean a certificate issu ed by the motion picture
authority to a person who sponsors a motion picture production made to order under Act II of 2004 on Motion
Pictures (hereinafter referred to as “MPA”) or to sponsors of motion pictures not made to order, and which contains
the name, address and tax number of the sponsor and the amount donated under eligibility for tax allowance.
37.
40. ‘sole proprietorship’ shall mean a legal entity de fined in the Act on Private Entrepreneurs and Sole
Proprietorships.
PART TWO
CORPORATE TAX
Chapter II
Corporate Tax Liability
Section 5
(1) Taxpayers shall be subject to corporate tax liability on their income pursuant to the provisions of this Act.
Churches not engaged in any entrepreneurial activity during the tax year shall be required to file a declaration in lieu
of a tax return to satisfy their corporate tax liability for the tax year.
(2) The corporate tax liability of a resident taxpayer shall commence on the date when the memorandum of
association is drawn up, signed and certified in due legal form, if permitted to commence operations before the
company is registered in the re gister of companies, or in the date when making the first legal statement if considered
a resident on account of the place of management; in othe r cases tax liability shall commence at the time when
considered established accordin g to the legislation governing its foundation. The tax liability of a taxpayer shall be
terminated on the date when considered dissolved according to the legislation governing its dissolution, or on the day
immediately following the day when exempted from corporate tax liability for any reason (including if the
application for registration is rejected or if the registration procedure is terminated).
(3) The corporate tax liability of a nonresident entrepreneur shall commence on the day his branch is registered in
the register of companies and terminat e on the day the branch is removed from the register of companies. The tax
liability of a nonresident entrepreneur shall terminate on th e day preceding the day on which a liquidation proceeding
(including any equivalent proceeding) is opened against such nonr esident entrepreneur in Hungary or, if it involves
his Hungarian branch, abroad. If a nonresident entrepreneur is engaged in business operations in Hungary through a
business establishment that has not been registered by th e court of registry, his tax liability shall commence on the
day on which the first legal statement that brings the place of business into existence is issued, and it shall terminate
on the day on which the nonresident entrepreneur is dissolv ed or the legal statement resulting in the dissolution of the
business establishment is issued (meaning also where th e activities are carried out in the form of a branch, a
European public limited-liability company or a European cooperative society). Where the tax liability of a
nonresident entrepreneur originates from a construction pr oject carried out in Hungary, it shall commence on the first
day of construction if the duration of the project exceeds the period of time specified in the agreement or, if there is
no agreement, three months. As to whether the construction is carried out at the nonresident entrepreneur’s branch or
other fixed establishment shall have no bearing on the continuity of construction.
(4) The taxpayer, if not required to file a financial stat ement for the tax year before the deadline prescribed for
filing the tax return for the same year, shall assess the amount of tax payable based on the closing accounting
statement drawn up on the last day of the tax year. If the taxpayer is required to complete the financial statement for
the tax year subsequently, the actual amount of tax payable shall be assessed for each tax year – in compliance with
the provisions in effect for the year to which the tax return pertains – based on such report, as well as the difference
of the actual tax amount and the tax payable declared on the basis of the closing accounting statement.

(5) The provisions of this Act pertaining to succession (including where a departing member transfers a certain
amount of the company’s assets to an existing company, i.e. the receiving comp any) shall also be applied by the
taxpayers, while the provisions on predecessors shall be app lied – in respect of division – by the surviving taxpayer.
(6) If a liquidation (or a similar) proceeding is concluded without having the company cancelled from the register
of companies, the tax liability shall continue as a new tax y ear from the day following the date of termination of the
proceeding.
(7) Foundations, public foundations, non-governmental organizations, public corporations, institutions of
higher learning, nonprofit business associations, and soci al cooperatives may apply the provisions on public-
benefit organizations and priority public-benefit organizations for the first time in the tax year when
registered as such. Taxpayers may not apply the provisions on public-benefit organizations and priority
public-benefit organizations during the tax year when being cancelled from the register of public-benefit
organizations, with the exception of issuing certificates up to the date of can cellation. In the case of any change
in the public benefit status during the tax year, the provisions pertaining to the classification in effect on the
last day of the tax year shall be applied for the entire tax year, with the exception of issuing certificates up to
the date of re-classification.
(8) Corporate tax returns shall be prepared in the Hungarian language, denominated in Hungarian Forints (HUF).
The taxpayers whose financial statement and books are deno minated in a convertible currency shall translate all
sums in the corporate tax return into forints on the basis of the official exchange rate of Magyar Nemzeti Bank in
effect on the last day of the tax year. In respect of foreign currencies whose ex change rate is not listed by the Magyar
Nemzeti Bank, the conversion shall be carried out using the euro exchange rate published by the Magyar Nemzeti
Bank for the last day of the tax year. The same procedure shall apply to all other cases of conversion that falls
outside the scope of the Accounting Act. (9) The tax liability of any member of a company with real estate holdings shall apply as of the day of transfer of
his share in the said company with r eal estate holdings, or when the subscribed capital is decreased through
disinvestment.
Determining the Corporate Tax Base
Section 6
(1) For resident taxpayers and non resident entrepreneurs, pre-tax profit, adjusted in accordance with
Sections 7, 8, 16, 18 and 28 and Chapter VII shall represent the corporate tax base.
(2) The pre-tax profit or loss for resident taxpayers and nonresident entrepreneurs, if not required to file a
financial statement on the tax year before the deadlin e prescribed for filing the tax return for the same year,
shall be assessed based on the closing accounting statement.
(3) The corporate tax base for foreign organizations and for companies with real estate holdings shall
comprise the income defined, respectively, in Section 15 and Section 15/A.
(4) In the case of foundations, public foundations, non-governmental organizations, public corporations,
churches, housing cooperatives, voluntary mutual insu rance funds, ESOP trusts, public-benefit or priority
public-benefit nonprofit business associations, institutions of higher learning registered as public-benefit
organizations or priority public-benefit organizations, soci al cooperatives, water management associations
and foreign enterprises, the provisions of Subsections (1) and (2) shall apply, with due consideration of
Sections 9-14.
(5) If a taxpayer’s pre-tax profit as specified in Subsection (2) or his tax base as specified in Subsection (1),
whichever is higher, fails to reach the income (profit) minimum, such taxpayer shall have the option to either:
a) make a statement specified in Subsection (1) of Section 91/A of the Act on the Rules of Taxation in his tax
return; or
b) apply – in accordance with the provisions of Subsections (6)-(10) and in due consideration of the provisions of
the relevant international agreement – the income (profit) minimum from the operations of his foreign branch as the
tax base, without the income (profit) minimum of the foreign branch. (6) Subsection (5) shall not apply to the taxpayer:
a) during the tax year when functioning as a pre-company and the following tax year, or during the first tax year if
a separate financial statement is not required for the period when functioning as a pre-company; or
b) if taxed under Paragraphs e)-h) of Subsection (2) of Section 2, or if a social cooperative, a school cooperative or
if a public-benefit or priority public-b enefit nonprofit business association; or

c) if having sustained any natural disaster during the current or the previous tax year, and the value of the resulting
damage – or the aggregate value of multiple events, if appli cable – represents at least 15 per cent of the taxpayer’s
annualized revenues for the previous tax year (for the taxpayers established by way of transformation, of the
revenues – combined or split as appropriate for the type of transformation – of the predecessor). (7) For the purposes of Subsection (5), income (profit) minimum means 2 per cent of the total income that
includes the items specified in Subsection (9) with the deductions specified in Subsection (8). (8) The following may be deducted from the total revenue for determining the income (profit) minimum:
a) the original cost of goods sold and the original costs of services mediated;
b) the income shown for the tax year – shown as the origin al cost of shares obtained in a taxpayer established by
way of preferential transformation – in respect of members or shareholders of the predecessor;
c) the income shown for the tax year from the transfer of a strategic business unit in the case of the preferential
transfer of assets in respect of the transferring company;
d) the amount of capital gains claimed during the tax year as earned on shares transferred under a preferential
exchange of shares in respect of any memb er (shareholder) of the acquired company.
(9) The following shall comprise a part of the total revenue for determining the income (profit) minimum:
a) in connection with the preferential transformation or preferential exchange of shares of the predecessor, from
the deductions the member or shareholder had made, the sum subtracted from the original cost of shares obtained in
connection with a preferential transforma tion and transferred at its book value, as claimed for the tax year under any
title (not to exceed the amount already cl aimed by virtue of the above-specified provision as deducted from the pre-
tax profit in connection with the shares in question), furthermore, in the tax year of termination without succession,
the part not yet claimed as an increment; b) the receiving company, fr om the sum the transferring company has claimed – and substantiated – as a deduction
from the total revenue, the amount de preciated in accordance with accounting re gulations in connection with tangible
and intangible assets received, as commen surate for the original costs of such assets, furthermore, in the tax year of
termination without succession, the amount remaining.
(10) For the purposes of Subsection (6 ) above, ‘natural disaster’ shall mean acts of nature where perils covered
include hail, flood, damage due to excess surface waters , frost damage, sandstorm, drought, snow-, ice- and
windstorm, blizzard, earthquake, and fi re whether due to natural or biological causes. Natural disaster may be
verified by a deed documenting the damage (e.g. a report or assessment or a similar document made out by an
insurance company, an agricultural administration body, or an emergency response body, etc.), or a report drawn up
by the injured party if a document made out by an independent organization is not available. The taxpayer shall send
the report he has made out, indicating the fact and the amount of damage, to the competent state tax authority within
fifteen days following the time when the damage has occurred. No application for continuation may be lodged upon
failure to meet this deadline.
Tax Base Deductions
Section 7
(1) The following shall be deducted from the pre-tax profit:
a) from the deferred losses of previous years an amount of the taxpayer’s choice, with due consideration of the
provisions of Section 17 and Chapter VII;
b) for taxpayers keeping double-entry books, the amount shown as income as a result of appropriation of the
provisions for prospective obligations and for forward expenses (not including the provisions created by the
Diákhitel Központ Részvénytársaság (Student Loan Center) subject to the requirements laid down in the relevant
Government Decree); c)
cs) the amount of extraordinary depreciation reversed in the tax year, except the amount of extraordinary
depreciation that has been claimed in the tax base to the extent reversed according to Point 10 of Schedule No. 1, or
that may be claimed in the tax base acco rding to Point 10/a of Schedule No. 1;
d) the amounts of depreciation claimed for the tax year according to the provisions laid down in Schedules Nos. 1
and 2, furthermore, when intangible assets and tangible assets are retired from the books on any grounds – with the
exception when done in connection with the preferential tr ansfer of assets and the conditions prescribed under
Subsections (13)-(15) of Section 16 are satisfied – or transferred to the current assets account, and, in respect of
taxpayers keeping single-entry books, when a liability associat ed with an asset is cancelled or assigned in part or in
full, the adjusted book value of the asset that is in exces s of the value of waste and recycled materials shown under

inventories, provided in all cases that the taxpayer has deducted the depreciation of such asset from the pre-tax profit
according to the Accounting Act; dz) capital gains from the sale of a notified share shown fo r the tax year, on condition that the taxpayer (including
any predecessor) has shown the share in question under his a ssets for at least one year previously, furthermore, any
value readjustment claimed during the tax year in connection with the notified share in question;
dzs) at the taxpayer’s discretion,
a) the amount claimed as an increase in the value of fi nancial investments denominated in foreign currencies that
is not covered by hedging, or as a loss in the value of lo ng-term liabilities due to changes in the exchange rate as a
result of the valuation as of the balance sheet date, shown under assets and liabilities, b) when eliminating an asset (other th an notified shares) from financial inve stments (including value adjustments),
or when eliminating a liability from long- term liabilities, the amounts claimed in any previous tax year that were
added to the pre-tax profit accord ing to Subparagraph a) of Paragraph dzs) of Subsection (1) of Section 8, or if the
asset is transferred only in part, the amount calculated from the loss in the book value of the asset denominated in a
foreign currency in proportion to the book value shown on th e last day of the previous tax year; this provision shall
apply to all valuated assets and liabilities, where the exchange difference must be shown as income; e)
f) the amount of retained earnings that is transferred into tied-up provisions during the tax year and shown as tied
up on the last day of the tax year, but which exceeds neither 50 per cent of th e pre-tax profit earned during the tax
year, nor five hundred million forints in a tax year (hereinafter referred to as “provision for developments”), in due
observation of what is laid down in Subsection (15); g) for taxpayers, income received or due from dividends and shares:
1. during the tax year (or other taxable income of the like for enterprises keeping single-entry books), with the
exception of the income received or du e as dividends and shares from a controlled foreign company, in due
consideration of what is contained in Point 2,
2. during the tax year, up to the amount claimed as an increment to the pre-tax profit according to Paragraph f)
of Subsection (1) of Section 8 – as verified by the taxpayer’s related tax return and the underlying records and
documents – and that was not yet deducted from the pre-tax profit;
gy) the income of members (shareholders, partners):
1. shown for the tax year that is in excess of the value – determined according to Subsection (10) – of shares that
are derecognized (whether in full or in part), includ ing the liabilities shown under shareholder contributions
for pre-companies, but not including shares in a controlled foreign company, if the investment in an
enterprise is eliminated or reduced due to the enterp rise being wound up without succession, if its subscribed
capital is decreased through disinvestment, or if the enterprise is terminated by way of preferential
transformation, in due consideration of what is contained in Point 2,
2. where shares in a controlled foreign company are eliminated according to Point 1, the resulting income
claimed for the tax year in excess of the value of the derecognized shares under Subsection (10), up to the
amount claimed as an increment to the pre-tax profit according to Paragraph f) of Subsection (1) of Section 8
– as verified by the taxpayer’s related tax return and the underlying records and documents – and that was not
yet deducted from the pre-tax profit;
h) the amount of capital gain claimed during the tax ye ar as earned on shares transferred under a preferential
exchange of shares by a member (shareholder) of an acquired company, if the taxpayer wishes to claim this
allowance; where the taxpayer chooses to claim this allowance, he shall k eep separate records of all shares acquired
as part of the preferential exchange of shares;
i) for taxpayers participating in apprentice training in the vocational school system, 24 per cent of the prevailing
minimum wage in effect on the first da y of the tax year for each month, or fraction thereof, for each apprentice if the
taxpayer performs the practical training of vocational school students on the basis of an apprenticeship agreement
defined by law, or it shall be 12 per cent if performed under agreement with the school;
j) the social security contribution, in addition to claiming the contribution shown under expenses, paid for the
apprentices specified in Paragraph i), who have successf ully passed the vocational examination, if employed
uninterruptedly on a continuous basis, as well as for previously unemployed persons referred to in Subsection (3), or
persons released from imprisonment within 6 months from the date of release, or persons released on parole for the
duration of their employment, but for not more than twelve months; taxpayers may apply this provision if they have
not terminated by ordinary notice the employment of another employee working in an identical position since or
within a period of six months prior to the employment of the previously unemployed person, and the previously
unemployed person was not employed by the taxpayer within a period of six months prior to such employment; k)-l)

ly)
m) the part of income claimed when retiring a partnership share or own shares and own converted investment
share certificates that has been repurchased, that is in ex cess of the original cost of such repurchased partnership
share or own stock; n) the amount of impairment loss reversed during the tax y ear in connection with a receivable, furthermore, from
the historical cost of a receivable, the part declared irrecoverable and the inco me earned at the time and in connection
with the transfer, settlement or offsetting of a claim realized in th e amount that is in excess of the book value of the
claim, not to exceed the amount of adju stment already deducted; credit institutions and financial enterprises shall not
apply this provision concerning their receivables from financial services and investment service activities, nor shall
investment firms from their investment service activities; ny)
o) from the income earned by the owners’ association of condominium buildings and resort condominiums
(hereinafter referred to collectively as “condominium” ) under one name, for which income the condominium has
paid the tax according to the provisions of the Personal In come Tax Act, the share of such income claimed for the tax
year by the taxpayer; p) the sums shown under conversion difference when switching from forint to foreign currency, from foreign
currency to forint, or from one foreign currency to another, and deducted from the retained earnings, in the tax year
following the date when the conversion took place;
q) the amount of impairment loss of ownership shares reversed, if the taxpayer has already applied it to increase
pre-tax profit, as is verified by the relevant tax return and the underlying records and documents;
r) the amount taken into account as a pre-tax profit increment factor in the tax year or during previous tax years,
shown as revenues in the tax year due to the remission of a fi ne or the sanctions stipulated in the Act on the Rules of
Taxation and the acts on social insurance; s) 50 per cent of the amount of royaltie s claimed as income under pre-tax profit for the tax year, in due observation
of the provisions in Subsection (14);
sz)
t) taking into consideration of what is contained in Su bsections (17)-(18), the direct costs of basic research,
applied research and experimental development carried out within the taxpayer’s own scope of activities (not
including the value of research and experimental developm ent services provided by a resident taxpayer, by the
domestic branch of a nonres ident entrepreneur or – pursuant to the Personal Income Tax Act – by a private
entrepreneur directly or indirectly) claimed in the tax year in which it is incurred or, at the taxpayer’s discretion, if
these costs are shown under the capitalized value of experimental development (intellectual property) in the tax year
in which depreciation is claimed, up to the amount claimed as depreciation; these costs (charges) may not be
deducted from pre-tax profit and shown under the costs of development or operating costs (charges) in the amount of
any support or assistance requested from the tax authority before the balance sheet date or received during the tax
year for development purposes without any obligation of repayment, or – if applicable – in the amount of income
included in the pre-tax profit for the tax year under the title of grant or support;
ty) the cost of renovation of buildings and other properties protected under the national scheme of historical
monuments or placed under local protection, increasing the original value of such structures, for the taxpayer of
record of the tangible asset in question;
u) the amount shown under income for the tax year or that is added to the capitalized value of own performance,
or shown under deductions from costs and expenses for the tax year, as determined in the course of a tax audit or
self-revision (for enterprises keeping si ngle-entry books, the amount shown under taxable income or as an increment
of purchased and financially settled inventories); v) for taxpayers employin g workers with at least 50 per cent disa bility, the monthly wage paid to each
handicapped worker, or maximum the prevailing minimum wage in effect on the first day of the tax year, provided
that the average statistical number of employees does not exceed twenty persons for the tax year;
w)-x)
y) for taxpayers of the status of micro enterprises on the first day of the tax year, the sum received by – taking into
consideration of what is contained in Subsections (19)-(20) – multiplying the annual average of the prevailing
monthly minimum wage in effect on the first day of th e tax year by any increment in the average number of
employees either in comparison to the previous tax year, the last tax year of the predecessor, or to zero if there is no
previous tax year, provided that the taxpayer did not employ more than five persons on average in the previous tax
year and has no outstanding tax debts of record owed to the state or local tax authority on the last day of the tax year;
z) from the non-repayable financial support or grant, or assistance provided in the form of goods or
services during the tax year without consideration to priority public-benefit organizations, or under long-term

donation contracts with public-benefit organizations or priority public-benefit organizations for supporting
their activities performed in the public interest as specified in the Act on Public-Benefit Organizations and
supporting public duties that are classified as priority public service activities:
1. 50 per cent of the support or grant, or the book value of the goods or services if provided to a priority
public-benefit organization,
2. 20 per cent of the support or grant, or the book va lue of the goods or services if provided under a long-
term donation contract,
up to the amount of the pre-tax profit on the aggregate,
zs) in respect of small and medium-sized enterprises so qualified on the last day of the tax year – if wishing to
claim this allowance – the payments on account claimed for the tax year in connection with new acquisitions of land
and buildings, and new acquisitions of tangible assets such as technical equipment, machinery and vehicles, if such
payments are made for the purpose of putting these assets into service; the costs of remodeling, expanding and
converting real estate properties in orde r to increase their original value; as well as the value of new acquisitions of
intellectual property shown in the books under intangible assets during the tax year, in due observation of the
provisions of Subsections (11)-(12).
(2) Taxpayers shall have the option to apply for the tax year the provisions set out in Subparagraph a) of
Paragraph dzs) of Subsection (1) of this Section and in Subparagraph a) of Paragraph dzs) of Subsection (1) of
Section 8 solely for the sum recognized as the adjusted value of investments in equity securities shown under
financial investments denominated in foreign currencies th at is not covered by hedging, due to changes in the
exchange rate as a result of the valuation as of the ba lance sheet date (disregarding the sums claimed as the
adjustment of the value of other financial investments and long-term liabilities), provided that exercising this option
shall not result in a tax base that is lower than the tax base calculated disregarding the provisions contained in
Paragraph dzs) of Subsection (1) of this Section and in Paragraph dzs) of Subsection (1) of Section 8.
(3) ‘Formerly unemployed person’ shall mean an individual who, immediately prior to his/her employment,
a) was registered as a job-seeker for at least six months by the government employment agency, or
b) received unemployment benefits pursuant to the Job Assistance and Unemployment Benefits Act or a
supplementary income allowance pursua nt to the Social Administration and Social Welfare Benefits Act, or
c) has exhausted his eligibility for the benefits described in Paragraph b), however, he/she continues to cooperate
with the government employment agency, moreover, in respect of the conditions described in Para graphs a)-c), the period during which the unemployed
person has received pregnancy-maternity benefits and/or ch ild-care allowance; the period of detention, imprisonment
or confinement; and the time spent in regular or reserve mili tary service or in civil services (the period between
entering and leaving such services) shall not be taken into account.
(4)
(5)-(6)
(7) Taxpayers may reduce the pre- tax profit pursuant Paragraph z) of Subsection (1) only in possession of a
certificate made out for tax purposes by the public-b enefit organization, the priority public-benefit
organization, such certificate is to include the name of the issuer and the taxpayer, their registered offices and
tax numbers, the amount of the donation and the object ive supported, furthermore, in the case of a public-
benefit organization or a priority public-benefit organization, the category of the public service.
(8)
(9)
(10) For the purposes of Paragraph gy) of Subsectio n (1), the value of a retired share shall mean:
a) the direct cost of the share – but at least the direct cost of record of the share transferred from the predecessor
company to a member (shareholder, partner) created by succe ssion, if the investment in the enterprise is eliminated
or reduced due to termination of the enterprise without su ccession, or if its subscribed capital is decreased through
disinvestment, or through transformation in respect of the member (shareholder, partner) that did not wish to
participate in the successor company, b) the book value of the share, or, by the member’s (share holder’s, partner’s) choice, the value of the share defined
under Paragraph a) if such member wishes to participate in the successor company.
(11) The provisions set out in Paragraph zs) of Subsection (1)
a) may be applied in the tax year if the taxpayer has only had private individual members (shareholders, partners)
throughout the entire year (including ESOP) apart from the taxpayer itself, b) may not be applied in connection with the historical cost of non-operational properties and plantations, with the
costs of remodeling, expanding and converting non-operational real estate properties in order to increase their
original value and the value of tangible and intangible assets received in exchange within the warranty period due to

lack of conformity if the taxpayer has already applied the provision of Paragraph zs) of Subsection (1) with respect to
the tangible or intangible assets that have been returned. (12) The amount referred to in Paragraph zs) of Subsec tion (1) shall not exceed the pre-tax profit and cannot be
more than thirty million forints, whose value calculated by the tax rate referred to in Subsection (1) of Section 19 for
the purposes of the provisions governing state subsidies, if the investment serves the purpose of primary agricultural
production, it may be claimed as an aid provided according to Article 4 of Commission Regulation (EC) No.
1857/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to State aid to small and
medium-sized enterprises active in the production of agricultural products, in all other cases it shall be treated, at the
taxpayer’s choice:
a) as de minimis aid received for the tax year, or
b) as aid provided under the Commission Regulation on State aid to small and medium-sized enterprises.
(13)
(14) Taxpayers shall be entitled to apply Paragraph s) of Subsection (1) at their discretion. The combined total of
the amount deducted from the pre-tax profit under these provisions shall not exceed 50 per cent of the pre-tax profit.
(15) The taxpayer may not use the provision for developments defined in Paragraph f) of Subsection (1) under the
title of assets received as non-monetary, in-kind contribu tions or assets received without compensation, nor in
connection with tangible assets that cannot be depreciated or on which no depreciation allowance may be claimed,
with the exception of buildings and other properties protected under the national scheme of historical monuments or
placed under local protection. The taxpayer may release the aforesaid provis ion consistent with the cost of
developments during the four-year period subsequent to the tax year in which it was created, unless the taxpayer has
assessed the tax, and the default penalty applicable, on any released amount at the rate specified in Subsection (1) of
Section 19 in effect for the tax year in which the provision was tied up, and pays it within thirty days of the date on
which it was released. Up to the end of the fourth tax year following the year in which the provision for
developments was tied up, the tax, and the default penalty applicable, on any unused portion of the provision shall be
assessed, and paid, at the above-specified rate by the last day of the first month of the following tax year. The default
penalty shall be charged as of the first day immediately following the due date for filing the tax return in which the
allowance was claimed until the day when the funds were released for purposes other than development, or until the
last day of the period available for use, and shall be declared , together with the tax assessed, in the first corporate tax
return submitted following the said date. (16)
(17) In connection with basic research, applied research and experimental development performed jointly by a
taxpayer and an institution of higher education, the Magyar Tudományos Akadémia (Hungarian Academy of
Sciences) or a research institution (res earch facility) established by either of them or jointly (including any
equivalent organization established in any Member State of the European Union or any State that is a party to the
Agreement on the European Economic Area), the taxpayer may claim three times the amount referred to in and
calculated according to Paragraph t) of Subsection (1) up to maximum fifty million forints, whose value calculated
by the tax rate referred to in Subsection (1) of Section 19 for the purposes of the provisions governing state subsidies
shall be treated as de minimis aid received for the tax year.
(18) The provisions of Paragraph t) of Subsection (1) may be applied in connection with research and
experimental development services by the person to whom they were provided if the service provider declares of
having provided the service without the involvement of research and experimental development services provided by
a resident taxpayer or by the Hungarian branch of a nonresident entrepreneur, or by a private entrepreneur governed
under the Act on Personal Income Tax.
(19) In the application of Paragraph y) of Subsection (1) of this Section and Paragraph v) of Subsection (1) of
Section 8, the average number of employees shall be dete rmined (up to two decimal places) excluding any person
who, prior to the employment or during the 12-month period preceding 1 January 2004: a) was working for a person considered affiliated to th e taxpayer, whether under contract of employment or
otherwise, including any relation requiring personal participation;
b) was working as a private entrepreneur considered affiliated to the taxpayer.
(20) The amount referred to in Paragraph y) of Subsection (1), calculated by the tax rate referred to in Subsection
(1) of Section 19 for the purposes of the provisions governing state subsidies shall be treated as de minimis aid
received for the tax year.
(21)
(22)
Tax Base Increasing Factors

Section 8
(1) Pre-tax profit shall be increased by the following:
a) for taxpayers keeping double -entry books, the costs claimed for the tax year on account of provisions (and the
amounts increasing the provision) set aside for prospective obligations and forward expenses (not including other
provisions of the like created by the Diákhitel Központ Részvénytársaság subject to the requirements laid down in
the relevant government decree); b) the amounts of ordinary depreciation (including lump-sum depreciation) and extraordinary depreciation for the
tax year, furthermore, when intangible assets and tangible assets are retired from the books – with the exception when
done in connection with the preferential transfer of assets and the conditions prescribed under Subsections (13)-(15)
of Section 16 are satisfied – or transf erred to the current assets account for an y reason, and, in respect of taxpayers
keeping single-entry books, when a liability associated with an asset is cancelled or assigned in part or in full, the
adjusted book value of the asset that is in excess of the value of waste and recycled materials shown under
inventories, provided in all cases that the taxpayer has deducted the depreciation of such asset from the pre-tax profit
according to the Accounting Act; c)
d) amounts claimed as costs or expenditures, and deducted from the pre-tax profit, including the depreciation
allowances of tangible assets and intangible assets, which are not related to the business operations or the gainful
activity, with particular regard to what is contained in Schedule No. 3; dzs) in the event that the taxpayer
a) applies Subparagraph a) of Paragraph dzs) of Subsection (1) of Section 7, the amount claimed as a loss in the
value of financial investments denominated in foreign curren cies that is not covered by hedging, or as an increment
in the value of long-term liabilities due to changes in the ex change rate as a result of the valuation as of the balance
sheet date, shown under assets and liabilities, b) when transferring an asset (other than notified shares) from financial investments (including value adjustments),
or when transferring a liability from l ong-term liabilities, the amounts claimed in any previous tax year that were
deducted from the pre-tax profit according to Subparagraph a) of Paragraph dz s) of Subsection (1) of Section 7, or if
the asset is transferred only in part, the amount calculated from the loss in the book value of the asset denominated in
a foreign currency in proportion to the book value shown on the last day of the previous tax year; this provision shall
apply to all valuated assets and liabilities, where the exchange difference must be shown as an expense;
e) a fine established in a legally binding judgment, furthermore, the amount of liabilities claimed as expenditures,
arising from the sanctions prescribed in the Act on the Rules of Taxation and the acts on social insurance, except
when related to self-revision, f) the amount of profit after tax shown for the last day of the tax year (financial year) of the controlled foreign
company – as commensurate acco rding the taxpayer’s direct holding in the controlled foreign company on the last
day of the tax year – less any dividend paid out, provided that the taxpayer controls at least twenty-five per cent of
the voting rights or the capital of the controlled foreign company, or has a dominant influence by definition of the
Civil Code, and provided that private individuals regarded as resident in accordance with the Act on Personal Income
Tax have no holding in the taxpayer; g)
gy) the amount of impairment loss claimed for the tax year on receivables (with the exce ption of the receivables of
credit institutions and financial companies and investment fi rms, respectively from financial services and investment
service activities, and from investment service activities); h) the debts cancelled during the tax year, if such debts are not treated as irrecoverable, except if:
1. they are cancelled to the benefit of a private individual, or
2. the taxpayer cancels the debt of a foreign person or a resident person other than a private individual, to which the
taxpayer is not affiliated; i)
j) the interests – shown under expenses or claimed as part of the cost of an asset during the tax year – on the
receivables described in Paragraph a) of Subsection (5) (with the exception of receivab les due from financial
institutions) in an amount pro portional to the part of such receivables that is in excess of three times the equity
capital – described in Paragraph b) of Subsection (5);
k)
l)
m) for the taxpayer:

a) the value adjustments and any capital loss shown under expenses for the tax year in connection with the shares
in a controlled foreign company, and the part of expenses resulting from the retirement of such shares for any reason,
that is in excess of the income accounted, or
b) in connection with notified shares, value adjustments and capital losses claimed for the tax year under expenses,
and any expenses claimed due to the retiring of shares fr om the records for any reason (other than settlement in
connection with transformation) in excess of the amount of income claimed; n)
o) the sums shown under conversion difference when switching from forint to foreign currency, from foreign
currency to forint, or from one foreign currency to another, and added to the capital reserve in the tax year following
the date when the conversion took place; p) the amount that is shown under expenses for the tax year or deducted from the net sales revenues and income
for the tax year, from capitalized value of own performance, as determined in the course of a tax audit or self-
revision (for enterprises keeping single-entry books, including any reductions in purchased and financially settled
inventories); r) from the amount deducted from the pre-tax profit in accordance with Paragraph gy) of Subsection (1) of Section
7, subtracted from the original cost of shares obtained in connection with a preferential transformation and
transferred at its book value, as claimed for the tax year under any title (not to exceed the amount already claimed by
virtue of the above-specified provision as deducted from th e pre-tax profit in connection with the shares in question),
taking also into consideration of what is contained in Subsection (7); s) on the basis of Paragraph z) of Subsection (1) of Sectio n 7, the extra benefits deducted in consideration of long-
term donations as described in the Act on Public-Benefit Organizations during the year(s) prior to the tax year from
the pre-tax profit, in respect of which the taxpayer did not discharge his obligations assumed in the contract on the
long-term donation during the tax year due to the other party being excluded from the register of public-benefit
organizations or being dissolved without succession, or double this amount if the taxpayer did not perform his
contractual obligations for any other reason; t) from the amount deducted from the pre-tax profit in accordance with Paragraph h) of Subsection (1) of Section
7, subtracted from the original costs of shares received in connection with a preferential exchange of shares and
transferred at its book value, as claimed in the tax year under any title (not to exceed the amount already claimed by
virtue of the above-specified provision as deducted from th e pre-tax profit in connection with the shares in question),
taking also into consideration of what is contained in Subsection (7); u) from the original cost of an asset in the course of construction or any intellectual property, double the amount
deducted from the pre-tax profit in accordance with Paragraph zs) of Subsection (1) of Section 7: ua) the tangible asset or intellectual property in question is not put into operation or used by the last day of the
fourth tax year following the year in which it was deducted from the pre-tax profit, in the tax return filed for said
fourth tax year, with the exception if the asset or intelle ctual property was not placed into operation or service in
consequence of damage owing to unavoidable external causes, ub) the tangible asset in question is put into operation under other fixtures, fittings, and vehicles before the last day
of the fourth tax year following the year when deducted from the pre-tax profit, in the tax return filed for the year the
asset was put into operation, uc) the tangible asset in question is put into operation a nd used as a non-operational real estate property until the
end of the fourth tax year following the year in which it was deducted from the pre-tax profit, or if transferred to the
other fixtures, fittings, and vehicles account or to the current assets account, or – in respect of intellectual property – if
transferred to the current assets account, in the tax return filed for the tax year in which it was first put into operation
or transferred, unless it was transferred to the current asse ts account as a consequence of damage that occurred as a
result of unavoidable external causes,
ud) the tangible asset or intellectual property in question is alienated (donated as an in-kind grant or contribution,
sold, conveyed without consid eration, or returned if it is an asset that was received under a financial leasing
agreement subject to in stallment or deferred payment arrangement) before the end of the fourth tax year following
the year in which it was deducted from the pre-tax profit, in the tax return filed for the tax year in which it is
alienated; v) in due observation of what is contained in Subsection (6 ) of this Section and in Subsection (19) of Section 7, the
reduction in the average number of employees multiplied by the annual average of the prevailing monthly minimum
wage in effect on the first day of the previous tax year, plus 20 per cent, not to exceed the allowance claimed under
Paragraph y) of Subsection (1) of Section 7 with 20 per cent added; the allowance claimed during the fourth tax year,
or before, prior to the tax year when the reduction of the average number of employees was claimed, as deducted
from the pre-tax profit, shall not be included in the amount of allowance claimed.

The provisions contained above shall not apply to sums claimed in connection with tangible and intangible assets
returned for exchange within the warranty period, however, with respect to assets received in exchange within the
warranty period the deadlines referred to in Paragraphs ua)-ud) shall be reckoned from the date of placing into
operation of the assets that were returned for exchange. (2) In the application of Paragraph j) of Subsection (1), the amount deducted from the pre-tax profit under
Paragraph k) of Subsection (1) shall not apply. (3)
(4)
(5) For the purposes of Paragraph j) of Subsection (1):
a) ‘liability’ shall mean the average daily balance of outstanding loans, outstanding debt securities offered
privately and bills payable (with the exception of bills payable on account of suppliers’ debts), and any other liability
other than loans, debt securities and bills payable shown in the balance sheet that entails the payment of interest from
the taxpayer’s profit (with the exception of debts of credit institutions and financial companies incurred in
connection with and for the purposes of financial service activities);
b) ‘equity capital’ shall mean the averag e daily balance of subscribed capital, capital reserve, retained earnings and
tied-up reserves (or own funds of the like). (6) If the average number of employees has dropped by comparison to the previous tax year for reasons of the
employees taking maternity leave, leave of absence for cari ng for a child, their incapacity to work due to illness,
entering into military service or serving time of imprisonment, or due to death, among other reasons, the provisions
of Paragraph v) of Subsection (1) shall not apply in the tax year when the events took place and in the following tax
year, provided that the amount referred to in Paragraph v) of Subsection (1) is less than the monthly minimum wage
prevailing on the first day of the tax year.
(7) Where a holding is removed from the books in consequence of the acquisition of shares resulting from another
preferential transformation or pr eferential exchange of shares, the taxpayer shall not be required to apply Paragraphs
r) and t). However, taxpayers are required to apply the sum deducted from the pre-tax profit on account of the
previous acquisition of shares resulting from the earlier preferential transformation or preferential exchange of shares
shall be deducted from the pre-tax prof it in respect of the latter acquisition of shares, up to the amount not previously
claimed as an increment to the pre-tax profit.
Determining the Tax Base of Founda tions, Public Foundations, Non-
Governmental Organizations, Public Bo dies, Churches, Housing Cooperatives,
Voluntary Mutual Insurance Funds and Institutions of Higher Learning
Registered as Public-Benefit Organizations or Priority Public-Benefit
Organizations
Section 9
(1) The tax base of foundations, public foundation s, non-governmental organizations, public bodies,
churches, housing cooperatives, voluntary mutual insu rance funds, and institutions of higher learning
registered as public-benefit organizations or priority public-benefit organizations shall be the pre-tax profit
from business operations, adjusted according to the provisions of Subsections (2)-(5) with due consideration of
Subsections (6)-(9).
(2) The pre-tax profit shall be reduced by the following:
a)
b) 20 per cent of the pre-tax profit of foundation s, public foundations, non-governmental organizations,
public bodies and institutions of higher learning regi stered as public-benefit or priority public-benefit
organizations from business operations;
c) from the value determined on the basis of Paragraphs a), b), cs), d), g), gy), i), j), m), n), o), r), t), u) and v)
of Subsection (1) of Section 7, as well as Subsections (3 ), (10) and (18) of Section 7, by the amount directly
attributable to business operations, or in the case of an indirect relationship, by an amount corresponding to
the revenues from business operations;
d)
e) for an interest representation organization of empl oyers and employees, the part of the pre-tax profit
from business operations earned during the tax year that the organization uses to cover the costs and expenses

in excess of the revenues from the activities entailed by the objective designated in its charter document or
bylaws during the current and the following tax year.
(3) Pre-tax profit shall be increased by the following:
a) from the value determined on the basis of Paragraphs a), b), d), e), gy), h), j), m), p) and r) of Subsection
(1) of Section 8, as well as Subsectio n (5) of Section 8, the amount directly attributable to business operations,
or in the case of an indirect relationship, by an amount corresponding to the revenues from business
operations;
b) in the case of any grant or support received – for reasons other th an business operations – by foundations,
public foundations, non-governmental organizations, pub lic bodies or institutions of higher learning
registered as public-benefit organizations or priority public-benefit organizations:
ba) the full amount of such grant or support, if on the last day of the tax year the aforesaid bodies and
organizations have any tax debts owed to the state or local tax authority,
bb) the portion of such donations calculated by the rates defined in Subsection (7), if on the last day of the
tax year the public-benefit organization and priori ty public-benefit organization in question has no
outstanding tax debts of record owed to the state or local tax authority, but its revenues from the business
operations exceed the preferential rate.
(4) The provisions of Sections 16, 18 and 28 and Ch apter VII shall apply with due consideration of the
provisions of Subsections (2) and (3) of this Section.
(5) When determining the tax base, churches may reduce the pre-tax profit from business operations by
that portion of their profit realized from such operations, which is used in the tax year to cover those costs and
expenses in the following tax year on cultural, educationa l, instructional, higher education, social, health, child
and youth welfare, sports, scientific and monument protec tion activities, and of the maintenance of real estate
properties for the purposes of religious life, which are in excess of revenues.
(6) The tax base of foundations, public foundations, non-governmental organizations, public bodies and
institutions of higher learning classified as public-benef it organization or priority public-benefit organization
shall be the portion of the amount established on the basis of Subsections (1)-(4) calculated by the rates
defined in Subsection (7).
(7) The preferential rate of the business operations shall be 10 per cent of total revenues in the case of
public-benefit organizations, or maximum twenty million forints, and 15 per cent of total revenues in the case
of priority public-benefit organizations. For the purposes of Paragraph b) of Subsection (3) and Subsection
(6), the rate shall be calculated as the quotient (up to two decimal places) of the revenues from business
operations realized in excess of the preferential rate of the business operations, and the total revenues from
business operations.
(8) National interest representation organizations shall determine their tax base according to Subsections
(1)-(7), subject to the provisions pertaining to public-benefit organizations.
(9) In respect of churches:
a) the pre-tax profit from business operations shall be calculated according to the provisions of the Act on
the Freedom of Belief and Religion and the Church and those of the Act on the Finances of the Religious and
Public Benefit Activities of Churches;
b) the tax base shall be established in due observation of the provisions of Subsections (1)-(7) pertaining to
public-benefit organizations;
c) regarding their organizational units vested with legal personality, the tax base shall be established
according to Paragraph b), or – if its business operations are defined according to the option granted in the
Act on the Finances of the Religious and Public Benefit Activities of Churches – according to Subsections (1)-
(5).
(10) European groupings of territorial cooperation shall establish their tax base in accordance with
Subsections (1)-(7) of this Section.
Tax Base of School Cooperatives
Section 10
(1) The tax base of school cooperatives shall include dividends and shares and the sums allocated as dividends or
shares from the earnings retained before tax and recorded in accordance with Subsection (6), also the amount by
which the subscribed capital was decreased and the total of liabilities incurred in the tax year in connection with the

termination of membership (hereinafter referred to as “accrued dividend”), and adjusted according to Subsections
(2)-(5), Sections 18 and 28 and – in respect of Subsections (2) and (3) – Chapter VII.
(2) The accrued dividend shall be reduced by the amount specified in Paragraphs r) and t) of Subsection (1) of
Section 7. (3) The accrued dividend shall be increased by the items defined in Paragraphs d), e) , j) , and m) of Subsection (1)
of Section 8 and Subsection (5) of Section 8, and by cancelled debts that are not considered irrecoverable. (4) In the event of the winding-up of a school cooperative without succession, the tax base shall be established in
accordance with Subsection (1) of Section 6, increased by the amount of the earnings retained before tax and
recorded in accordance with Subsection (6).
(5) In the event of the transformation of a school cooperative, the successor, if it does not qualify as a school
cooperative, shall increase the tax base by the amount of the earnings retained before tax by the predecessor.
(6) School cooperatives shall keep separa te records of their earnings retained before and after tax. To this end, the
retained earnings shown in the 2004 openi ng balance sheet as well as the retained earnings realized in the tax year in
which the taxpayer did not qualify as a school cooperative sh all be considered as earnings retained after tax. Any
reduction in the retained earnings shall be divided with a view to the ratio calculated on the basis of the records of
the previous year between the earnings re tained after tax and those retained before tax. The value of assets allocated
to a member in connection with the reduction of capital or when terminating his membership status shall be deducted
from the earnings retained after tax, or any portion that is in excess shall be shown under earnings retained before
tax. (7) With respect to the merger or demerger of school co operatives, the retained earnings referred to in Subsection
(6) shall be either added up or divided as consistent with the form of transformation, and from this amount the
balance of the assets and liabilities due to any member wi shing to withdraw from the company established through
transformation shall be deducted. The amount so deducted sh all be initially recorded under earnings retained after tax
up to the positive amount available, and any portion remaining shall be deducted from the earnings retained before
tax.
(8) In the application of this Section, the retained ear nings shall also include any sums tran sferred from it for
increasing the subscribed capital and any sums transferred from the positive consolidated revaluation reserve to the
capital reserve account. The reduction of the subscribed capital by the taxpaye r shall – up to the amount of capital
increase from the retained earnings – be tr eated as if it has been realized from the part of the subscribed capital that
was transferred from the retained earnings.
Tax Base of Limited Comp anies Engaged Exclusively in Providing Guarantee
Arrangements

Section 11
Tax Base of ESOP Organizations
Section 12
(1) The tax base of ESOP organizations shall be the annual profit for the year stated on the basis of the Accounting
Act and the provisions set forth in legi slation on the special provisions relating to the accounting system and the
annual reporting of ESOP organizations, adjusted as defined under Subsections (2) and (3). (2) Pre-tax profit shall be reduced:
a) by the amount speci fied under Paragraphs a), b), cs), d), g), gy), j), n), o), r) and u) of Subsection (1) of Section
7 and under Subsections (3) and (10) of Section 7; b) by the amount contributed by the participants as internal resources, the amount transferred by the company
employing the participants, and other payments made by the participants and other natural and legal persons. (3) Pre-tax profit shall be increased by the amount specified in Paragraphs a), b), d), e), gy), h), j), m), p) and r) of
Subsection (1) of Section 8 and in Subsection (5) of Section 8.
(4) ESOP organizations shall apply the provisions of Sec tions 16, 18 and 28 and Chapter VII in due observation of
the provisions of Subsections (2) and (3) of this Section.
Section 13

Tax Base of Nonprofit Business Associations with Public-Benefit or Priority
Public-Benefit Status, social cooperatives and of water management associations

Section 13/A
(1) The tax base of nonprofit business associations with public-benefit or priority public-benefit status, including
water works associations shall comprise the pre-tax profit, reduced as defined in Paragraphs a), b), cs), d), g), gy), i),
j), m), n), o), p), r), t), u), v) and y) of Subsection (1) of Section 7 and in Subsections (3), (10) and (18)-(20) of
Section 7, and increased as defined under Paragraphs a), b), d), e), gy), h), j), m), o), p), r) and v) of Subsection (1)
and Subsections (5)-(6) of Section 8, and – in due consideration of the aforementioned – they shall apply the
provisions of Sections 16, 18 and 28 and the provisions of Chapter VII. (2) Apart from what is contained in Subsection (1), public-benefit or prio rity public-benefit nonprofit business
associations shall increase the pre-tax profit: a) in the event of dissolution of public-benefit organizations without succe ssion, when membership status is
terminated or when the subscribed capital is reduced, by the portion of the assets a llocated to a member of the
company in excess of the value registered as taxed equ ity capital in the records described in Subsection (3);
b) in the event of the merger or de merger of public-benefit organizations, for the successor by the amount claimed
as a reduction from the equity capital before tax pursuant to Subsection (5), if the transformation has resulted in an
obligation of share disbursement towa rd any member of the predecessor;
c) by the amount claimed as a reduction from the equity capital before tax under Subsection (3) in the tax year
when public-benefit or priority public-benefit status is terminated, or on the successor’s part, if lacking public-benefit
or priority public-benefit stat us, during the first tax year;
d) by the full amount of grant or support received for reasons other than business operations, if on the last day of
the tax year the taxpayer has any tax debts owed to the state or local tax authority. (3) For the purposes of Paragraph a) of Subsection (2), public-benefit or priority public-benefit nonprofit business
associations shall indicate changes in their equity capital on an annual basis showing separately the part before tax
and after tax (without the evaluation reserve) and determine, in consideration of these, the portions of the closing
balance of the equity capital (without the evaluation reserve) for the tax year realized after tax or before tax. The
value allocated to the credit (or debit) of the amount before tax in the tax year shall be established on the basis of the
ratio of the revenues from preferential activities in the tax year relative to total revenues. When dividing the annual
variations, changes resulting from foundation, increase or decrease in the subscribed capital, capital reserve or
retained earnings shall not be taken into account, while at the same time the successor shall take into account the
consolidated revaluation difference during the first tax year following transformation. Members’ contributions
registered as an increase in the subscribed capital and the capital reserve during foundation and capital increase shall
be shown under subscribed capital after tax. In the event of a decr ease in capital, the value of assets allocated to a
member of the company shall be deducted from the equity capital after taxes, or if this is insufficient, the remaining
portion shall be debited to the equity capital before tax. If the business association carries on its activities in the form
of public-benefit or priority public-ben efit nonprofit business association, the equity capital available on the day
preceding the day of registration of its public-benefit stat us – with the exception of the consolidated revaluation
difference – shall be shown under equity capital after taxes, not including the retained earnings realized before tax
subject to the relevant provision of this Act, or the equity capital realized before tax, that has to remain under equity
capital before taxes. (4) In connection with the merger or demerger of pub lic-benefit or priority public-benefit nonprofit business
associations, the equity capit al after taxes and recorded in accordance with Subsection (3) shall be determined by
aggregation or diversification depending on the form of transformation, and the value received:
a) shall be increased by the financial contribution provided by a new (third party) member joining at the time of
transformation, or by the increment in equity paid as an additional contribution by a former member; b) shall be decreased by the reduction in equity as the di fference between the assets allocated to a member wishing
to withdraw from the company established by transforma tion and the value of liabilities, however, such decrease
may not result in a negative registered value. (5) In connection with the merger or demerger of pub lic-benefit or priority public-benefit nonprofit business
associations, the equity capital rea lized free of taxes and recorded in accordance with Subsection (3) shall be
determined by aggregation or diversifi cation, depending on the form of transformation, and the value received shall
be decreased by the portion that was not applied in accordance with Paragraph b) of Subsection (4) of the reduction

in equity as the difference between the assets allocated to a member wishing to withdraw from the company
established by transformation and the value of liabilities.
(6) Social cooperatives shall establish the tax base in acc ordance with the provisions of Subsections (1)-(5), where
the equity capital shown on the day pr eceding their commencement of operations shall be treated as equity capital
realized after taxes.
Tax Base of Nonresident Entrepreneurs
Section 14
(1) A nonresident entrepreneur shall calculate the corporate tax base – taking into account the provisions of
Subsections (2) and (3) – concurrently for all its domestic business establishments (exclusive of branches), and
separately for each of its Hungarian br anches according to Subsection (1) of S ection 6. The sales revenues, income,
costs and expenses of a business establishment shall be acco unted as if it were a separate entity, independent from
the nonresident company. (2) In addition to what is contained in Subsection (1), the pre-tax profit of the nonresident company determined for
its domestic business establishment: a) shall be reduced by a portion of its operating costs and expenses and overhead (with the exception of taxes
payable abroad) charged to its main office and any business establishment during the tax year as commensurate for
the Hungarian business establishments, however, this ratio shall not be more than the ratio between the total of all
sales revenues and income reported by the business establis hment and the total of all sales revenues and income of
the nonresident company;
b) shall be increased by operating costs and expenses and overhead of the business establishment charged to the
pre-tax profit or loss; c) shall be increased by 5 per cent of the revenues and income that was earned through but not recorded for the
business establishment. (3)
Tax Base of Branches of Nonresident Entrepreneurs
Section 14/A
Tax Base of Foreign Organizations
Section 15
(1) The tax base of foreign organizations shall comprise:
a) interest received (including the fees from securities lending operations);
b) royalties received;
c) service charges received for business and management c onsultancy, advertising and market research, public
opinion polling, and for agency activities listed under othe r professional, scientific and technical activities not
elsewhere classified under Regulatio n (EC) No. 1893/2006 of the European Parliament and of the Council
establishing the statistical classification of economic activities NACE Revision 2. (2) The provision of Paragraph a) of Subsection (1) above shall not apply:
a) to interest income paid by the Hungarian State, any sub-system of the central budget, the Magyar Nemzeti
Vagyonkezel ő private limited company (Hungarian National Asset Management Zrt.), the Magyar Fejlesztési Bank
private limited company (Hungarian Development Bank Zrt.), the Magyar Export-Import Bank private limited
company (Hungarian Export-Import Bank Zrt.), the Magyar Exporthitel Biztosító private limited company
(Hungarian Export Credit Insurance Zrt.) or by the Magyar Nemzeti Bank; b) to any interest income paid by credit institutions on deposits;
c) to default interest.
d) the interest paid on debt securities listed on a recognize d exchange in any Member State of the European Union,
any State that is a party to the Agreement on the European Economic Area or in any Member State of the
Organization for Economic Cooperation and Development (OECD).

(3) If the tax base referred to in Subsection (1) is denominated in a currency other than forint, it shall be translated
– by way of derogation from Subsection (8) of Sec tion 5 – to forints according to the Accounting Act.
Tax Base of Members of Companies with Real Estate Holdings; Tax Rate
Section 15/A.
(1) The tax base of members of companies with real estate holdings shall comprise the consideration received
upon the transfer of their share in the company, or th e sum received when decreasing the subscribed capital of the
company through disinvestment, less the costs of acquisition or maintenance as verified, if the resulting amount is
positive. (2) If the consideration or acquisition value is denominated in a currency other than forint, it shall be translated by
the official exchange rate of Magyar Nemzeti Bank in eff ect on the day of conclusion of the contract. If the member
of a company with real estate holdings has obtained the income in connection with the reduction of the subscribed
capital of the company through disinvestment, and the liability is denominated in a currency other than forint, it shall
be translated by the official exchange rate of Magyar Nemzeti Bank in effect on the day when the company was
registered. In respect of foreign currencies whose exchange rate is not listed by the Magyar Nemzeti Bank, the
conversion shall be carried out using the euro exchange rate published by the Magyar Nemzeti Bank for the last day
of the tax year. (3) For the purposes of these provisions, transfer means sale, a transaction when shares are made available as a
non-cash contribution to capital, or when provided without compensation.
(4) For the purposes of these provisions, consideration shall mean:
a) in connection with sales, the price contracted, or the fa ir market value when sold to an affiliated company;
b) the value determined in the instrument of constitution when shares are made available as a non-cash
contribution to capital, or the fair market value when made available to an affiliated company;
c) the fair market value when provided without compensation;
d) the value of the assets received (due) in exchange fo r the withdrawn shares where subscribed capital is
decreased through disinvestment. (5) For the purposes of these provisions, acquisition value means the contractual value.
(6) The tax amount shall be determined by the rate described in Subsection (1) of Section 19.
Special Rules Related to the Ad justment of Corporate Tax Base
Section 16
(1) Taxpayers
a) shall not apply the provisions contained in Paragraph f) of Subsection (1) of Section 7 in a tax year ending on a
day preceding the day of the opening of dissolution or liquidation proceedings, during the dissolution proceedings, or
in the taxpayer’s final tax year if it is wound up without succession and without going into liquidation or dissolution;
b) shall assess the tax, and the default penalty applicable , on any unused portion of the provision for developments
that was tied up preceding the tax year ending upon the da y of the opening of dissolution or liquidation proceeding
(or the last tax year if corporate existence is terminated w ithout succession and without going into liquidation or
dissolution) that is remaining by the last day of the said tax year at the rate specified in Subsection (1) of Section 19
in effect for the tax year in which the provision was tied up , and shall pay it within thirty days. The default penalty
shall be charged as of the first day immediately following the due date for filing the tax return in which the
allowance was claimed until the last day of the period availa ble for use, and shall be declared, together with the tax
assessed, in the first corporate tax return submitted following the said date;
c) if terminated without succession:
ca) shall decrease the pre-tax profit by the amount by which the adjusted book value of all intangible and tangible
assets exceeds their book value, and shall increase it by the amount by which their book value exceeds the total
adjusted book value, cb) shall increase the pre-tax profit by any portion of the amount that was deducted from the pre-tax profit under
Paragraph gy) of Subsection (1) of Section 7 in connection with a preferential transformation in the tax year or
previously, that was not previously added to the pre-tax profit pursuant to Paragraph r) of Subsection (1) of Section
8,

cc) shall increase the pre-tax profit by any portion of the amount that was deducted from the pre-tax profit under
Paragraph h) of Subsection (1) of Section 7 in the tax year or previously, that was not previously added to the pre-tax
profit pursuant to Paragraph t) of Subsection (1) of Section 8,
cd)
ce) shall increase the pre-tax profit by double the amount that was deducted from the pre-tax profit under
Paragraph z) of Subsection (1) of Section 7 in the tax year or previously under the title of extra benefits claimed in
connection with long-term donations as described in the Ac t on Public-Benefit Organizations, if the taxpayer did not
fulfill its contractual comm itments owing to termination without succession,
cf) shall increase the pre-tax profit by double the amoun t from the amount that was deducted from the pre-tax
profit under Paragraph zs) of Subsection (1) of Section 7 concerning the sum that was not added to the pre-tax profit
according to Paragraph u) of Subsection (1) of Section 8, if the taxpayer is terminated without succession in the tax
year in which it claims the deduction from the pre- tax profit or during the following four tax years,
cg) shall adjust the pre-tax profit by the amount of reserves shown in the simplified balance sheet of taxpayers
using the single-entry system,
ch) shall increase the pre-tax profit by the part of the sum determined according to Paragraph v) of Subsection (1)
of Section 8 that was not previously a dded to the taxpayer’s pre-tax profit,
ci) shall adjust the pre-tax profit by the items referred to in Paragraph dzs) of Subsection (1) of Section 7 and in
Paragraph dzs) of Subsection (1) of Section 8 not yet applied for reducing or increasing the pre-tax profit, as
appropriate, cj) shall adjust the pre-tax profit by the commitment pledged under Subsection (11) and Subsection (14) to the
extent previously not claimed for the purposes of the pre-tax profit, ck) shall adjust the pre-tax profit by th e amount established according to the prov isions of Section 18 to the extent
previously not claimed by the taxpayer for adjusting the pre-tax profit. (2) Upon transformation of the taxpayer:
a) the predecessor – except if the tr ansformation is considered preferential and the conditions prescribed under
Subsections (10)-(11) and (15) of this Section are satisfied – shall decrease the pre-tax profit by the amount by which
the total adjusted book value of intangible and tangible assets exceeds their total book value, and shall increase it by
the amount by which their total book value exceeds the total adjusted book value; as regards division, the
predecessor shall apply these provisions during the tax year when the transformation took place and solely to assets
transferred to the successor based on the final statement of assets and liabilities in effect at the time of
transformation;
b)-c)
d) the predecessor, or the succ essor in its first tax year in the case of di vision, shall adjust the pre-tax profit by the
amount of the consolidated revaluation difference shown in the final statement of assets and liabilities increased with
any depreciation of receivables and appr eciation of provisions added and any depreciation of provisions deducted,
also in due observation of Subsections (9)-(11); e)
f) a successor using double-entry bookkeeping shall, in its fi rst tax year, adjust the pre-tax profit by the amount of
transformation differential placed in the retained earnings by the predecessor using single-entry bookkeeping, or by
said successor in the case of division;
g)
h)
i) the successor shall adjust the pre-tax profit on the basis of the amount shown in the final statement of assets and
liabilities for assets received for a liability assumed from th e predecessor in excess of its book value or, if the
receivable is downgraded as irrecoverable, may adjust the pre-tax profit accordingly as the predecessor would have
done had the transfor mation not taken place.
(3) Taxpayers, if switching from single-entry bookkeeping to double-entry bookkeeping, shall, in the year of
switching:
a)-b)
c) increase the pre-tax profit by the amount of provisions for prospective obligations and forward expenses as
shown in the opening balance sheet.
(4) The tax liability of a European public limited-liability company, a European cooperative society and any
successor nonresid ent entrepreneur carryin g on its activities following transfer of its registered office shall be
determined – subject to the exception set out in this Act – as if the transfer had not taken place, including the
application of the principles of this Act concerning the adjustment of costs and expenses, income and pre-tax profit

(or the equivalent) claimed under the taxable status existing before the transfer or as being subject to corporate tax
(or similar) liability in another country. (5) Sole proprietorships may, as prescribed in Section 17, deduct the losses deferred by the founder private
entrepreneur up to the time of foundation according to th e provisions of the Personal Income Tax Act from the pre-
tax profit. Sole proprietorsh ips – if not all assets shown in the book s of the founder private entrepreneur are
transferred to the sole proprietorship – shall be able to apply the provisions contained in Subsections (1)-(3) of
Section 17 in respect of the losses deferred by the privat e entrepreneur by the percentage the assets transferred
represent relative to the value of all assets, based on the va lues of record in all cases, calculated up to two decimal
places. (6) In the event of continuation of the taxpayer’s tax liab ility beyond the date of conclusion of the liquidation (or
similar) proceeding, the taxpayer shall – in its tax retu rn for the year when the proceeding is concluded:
a) increase the pre-tax profit, if the equity capital has increased under the duration of liquidation,
b) reduce the pre-tax profit, if the equity capital has decr eased under the duration of liquidation, by the difference
between the equity shown in the statement of assets and liabilities dated the final day of the proceedings, and the
equity indicated in the report prepared on the day preceding the initial day of liquidation. (7) If the taxpayer is no longer subject to this Act for any reason except for termination due to transformation or if
its registered office is transferred to another country, it shall be treated as termination without succession. This
provision shall not apply when a European public limited-liability company or a European cooperative society
transfers its registered office to an other country in connection with the activities it pursues as a nonresident
entrepreneur. Furthermore, this provision shall not apply to any nonresident entrepreneur whose activities are taken
over by a European public limited-liability company or a European cooperative society. (8) If the taxpayer switches from forint to foreign curren cy, from foreign currency to forint, or from one foreign
currency to another it shall not be considered as termination. (9) In the case of preferential transforma tion, the predecessor, or the successor in the case of division shall, subject
to the conditions laid down in Subsection (10) and without prejudice to Paragraph d) of Subsection (2), shall not be
required to adjust the pre-tax profit. (10) Subsection (9) may be applied on condition that the successor’s memorandum of association (charter
document) stipulates a commitment to a pply the provisions contained in Subsection (11), and that the predecessor (or
the successor in the case of divisi on) notifies the tax authority of its selection in the tax return filed for the tax year in
which the transformation took place. (11) After transformation, the successor shall determine its tax base taking into account the assets and liabilities
received from the predecessor (including provisions and deferred expenses or accrued income), by adjusting the pre-
tax profit, as if the transformation had not taken place. The successor shall keep separate records on the same assets
and liabilities after they are revaluated, indicating their original value and the book value recorded by the predecessor
for the day of transformation, their adjusted book value as well as the sums it has claimed after the transformation to
adjust the pre-tax profit on the basis of the assets and liabilities in question. (12) In the case of preferential transf er of assets, the transferring company shall, subject to a written agreement
made with the receiving company and in accordance with the terms and conditio ns stipulated in Subsection (13),
have the option to decrease the pre-tax profit by the portion of the income claimed in connection with the transfer of
a strategic business unit that is in excess of the book value of the transferred assets, or shall increase the pre-tax
profit by the portion of the book value of the transfer red assets that is in excess of the income claimed.
(13) Subsection (12) may be applied on condition that the written agreement drawn up on the preferential transfer
of assets contains an itemized list of the transferred assets and liabilities (inc luding deferred expenses or accrued
income), indicating their original value, book value and adjusted book value recorded by the transferring company
for the day of transfer, and that the agreement contains a clause stipulating th e commitment for the application of the
provisions contained in Subsection (14), and the transferring company notifies the tax authority of its selection in the
tax return filed for the tax year in which th e preferential transfer of assets took place.
(14) After the preferential transfer of assets, the receiving company shall dete rmine its tax base taking into account
the assets and liabilities received from th e transferring company (including deferred expenses or accrued income), by
adjusting the pre-tax profit, as if the transfer had not taken place. The r eceiving company shall keep separate records
on the assets and liabilities received, indicating their original value and book value reco rded by the transferring
company for the day of transfer, their ad justed book value as well as the sums it has claimed after the transfer to
adjust the pre-tax profit on the basis of the assets and liabilities in question. (15) If the successor or the receiving company is nonres ident, the provisions of Subsections (9)-(14) may be
applied to assets and liabilities which are in fact connected to the activities of such nonresident entrepreneur, in that
capacity, in a Hungarian branch.

(16) The sole proprietorship:
a) may release the provision for developments of record sh own at the time when the founder private entrepreneur
ceased to operate in that capacity – for which he is requir ed to create tied-up reserves in the same amount on the day
after foundation – as instruct ed in Subsection (15) of Section 7, where the time of the opening of the period of
appropriation shall be construed as the tax year wh en the private entrepreneur claimed the provision for
developments as a reduction from entrepreneurial income, and the tax years up to the time of termination of
entrepreneurial activities shall also be taken into consideration; b) shall apply the provisions of Paragraph u) of Subsection (1) of Section 8 to any small business allowance the
founder private entrepreneur has claimed under the Pers onal Income Tax Act, where the tax year when the
entrepreneurial income was reduced shall be construed as tax year of reduction of the pre-tax profit, the reference
time for determining the last day of the fourth tax year following the tax year of reduction of the pre-tax profit shall
mean the tax year when the fo under private entrepreneur claimed the small business allowance, and the tax years up
to the time of termination of entrepreneurial ac tivities shall also be taken into consideration;
c) shall apply the provisions of Paragraph v) of Subsection (1) of Section 8 and Subsection (6) of Section 8 to any
employment tax credit the founder private entrepreneur has claimed under the Personal Income Tax Act, where the
amount of tax credit claimed shall comprise the sum the founder private entrepreneur has deducted from the
entrepreneurial income, the time of claiming the tax credit shall mean the tax year when the entrepreneurial income
was reduced, and as regards the change in the number of employees the tax years up to the time of termination of
entrepreneurial activities shall also be taken into consideration; d) shall apply the provisions of Subsections (5)-(6) of Section 19 in respect of any sum shown under the difference
of entrepreneurial income tax – for which he is required to create tied-up reserves in the same amount on the day after
foundation -, where the time of the opening of the period of appropriation shall be construed as the tax year when the
founder private entrepreneur applied the ten per cent tax rate, and the tax years up to the time of termination of
entrepreneurial activities shall also be taken into consideration; e) shall apply the provisions contained in Section 22/A to any small business allowance the founder private
entrepreneur has claimed under the Personal Income Tax Ac t, where the period prescribed under Subsection (5) of
Section 22/A shall also cover the tax years up to the time of conclusion of the loan contract, and up to the time of
termination of entrepreneurial activities from the tim e of placing the tangible assets into service .
Deferral of Loss
Section 17
(1) Inasmuch as the tax base referred to in Subsections (1 )-(4) of Section 6 is negative in any tax year, the taxpayer
may deduct such amount of loss from its pre-tax profit spread out at any rate in the following tax years, taking into
account the provisions of Subsections (3) -(9) of this Section, provided that the negative tax base occurred under the
principle of proper execution of the law within its meaning and intent (hereinafter referred to as “deferred loss”).
(2)
(3) The amount of deferred loss may be de ducted from the pre-tax profit of the current tax year in an extent as not
to render the tax base negative. When deducting deferred losses, the deferred losses brought forward from earlier tax
years shall be deducted first. (4) Taxpayers operating in the agricultural sector may account deferred losses by self-revision or by correcting the
amount of tax paid in the previous two tax years by reduc ing the pre-tax profit of the preceding two tax years by the
amount of the deferred loss. If the taxpayer fails to exercise this option, or transfers only part of the loss to the debit
of the previous two tax years, the provisions of Subsections (1)-(3) may be applied to the remainder. (5)
(6) If, during the life of a privatization leasing contract, there is a loss of assets on the part of the taxpayer, or if
there is a default in repayment and the contracting party acti ng on behalf of the state fails to cancel the contract with
immediate effect, the taxpayer may not defer any loss as defi ned in Subsections (1)-(2) in the year when the loss of
assets or default of repayment occurred.
(7) With regard to transformation, the successor shall appl y the provisions contained in Subsections (1)-(3) to the
deferred loss calculated according to the successor’s share in the predecessor’s capital as indicated in the statement
of assets and liabilities, that was not yet deducted from the pre-tax profit, furthermore, with regard to preferential
transfer of assets the receiving comp any shall also apply the provisions c ontained in Subsections (1)-(3) to the
deferred loss generated by a strategic business unit of the transferring company, also including the time lapsed at the

predecessor and the successor. This part, as regards division and preferential transfer of assets, is to be deducted,
respectively, by the predecessor comp any or by the transferring company from its own deferred losses.
(8)-(9)
(10) A European public limited-liability company or a European cooperative society, or a nonresident
entrepreneur, when taking over the activities of a nonres ident entrepreneur or a European public limited-liability
company or a European cooperative society, and vice versa, shall apply the provisions contained in Subsections (1)-
(6) above to any deferred loss of the predecessor th at was not deducted from the pre-tax profit.
(11) If the taxpayer’s decision is for deducting all deferred losses when determining the taxes payable, it shall be
taken into consideration in the process of self-revision and tax audit as well.
(12) In the event of the continuation of the taxpayer’s ta x liability beyond the date of conclusion of the liquidation
proceedings (or any proceedings of the lik e), the taxpayer shall apply the provisions of Subsections (1)-(3) of this
Section and the provisions of Chapter VII with regard to any loss carried over from before the day of the opening of
liquidation proceedings to the extent previously not deducted from the pre-tax profit, where the liquidation period is
considered one tax year.
Correction of Prices Applie d Among Affiliated Companies
Section 18
(1) If in the agreements and contracts between affiliated companies a higher or lower consideration is applied
(calculated exclusive of value added ta x) than the consideration enforced or that would be enforced vis-à-vis
independent parties under fair competition and comparable ci rcumstances (hereinafter referred to as “fair market
price”), the taxpayer – irrespective of any other items that ar e to be added to or deducted from the pre-tax profit as
prescribed in this Act – takes the difference between the fair market price and the consideration applied and shall
a) deduct it from the pre- tax profit, provided that:
aa) the consideration applied renders the pre-tax profit greater than it would have been had the fair market price
been applied, and
ab) the affiliated company contracted is a resident taxpayer or a foreign person (other than a controlled nonresident
company) who is subject to any tax that may be substitute d for corporate tax according to the national law of the
country where it is established, and
ac) it holds a document signed by both parties that contains the amount of the difference;
b) add it to the pre-tax profit if the consideration applied renders the pre-tax profit lower than it would have been
had the fair market price been applied (with the exception of contracts concluded with private individuals, other than
private entrepreneurs). (2) The fair market price shall be determined by either of the following methods:
a) comparative price method, where fair market price means the price used by independent parties in connection
with the supply of comparable products or serv ices in an economically comparable market;
b) resale price method, in which the fair market price means the price used in connection with the supply of
products or services in an unaltere d form to an independent party, less the reseller’s costs and fair profit;
c) cost and income method, in which the fair market price consists of the original costs of the products or services
and the fair profit; d) any other method if the fair market price cannot be determined by neither of the methods referred to in
Paragraphs a)-c). (3) The provisions of Subsections (1), (2) and (4) shall not apply to taxpayers qualified as small or medium-sized
enterprises on the last day of the tax year with regard to their long-term contracts concluded with affiliated
companies in the interest of joint purchases and sales to overcome competitive disadvantage, if the voting rights of
the small and medium-sized enterprises in question held in the affiliated company exceeds 50 per cent on the
aggregate. (4) Fair profit means the profit achieved by independe nt parties carrying out comparable activities under
comparable circumstances.
(5) Business associations, groupings, European public limited-liability companies, European cooperative societies,
cooperative societies and nonresident en trepreneurs that are not considered small enterprises (with the exception of
public-benefit and priority public-benef it nonprofit business associations, and the taxpayers in which the State has
majority control – whether directly or indirectly -) shall fix, effective as of the last day of the tax year, the fair market
price and the formula (including the data and the type of events on which the formula is based) they use for

determining it in line with the instructions laid down in the ministerial decree issued on the basis of the authorization
conferred in this Act. (6) The founder (not including formati on by transformation), the taxpayer who receives ca pital or pays out any
part of the capital, and members (shareholders) shall apply the provisions of Subsections (1)-(5) above in connection
with the paying-up or increase of capital by non-monetary contributions or if decreased through disinvestment, with
any payment of share by means other than money in the event of dissolution without succession, and also where
dividends are provided by means other than money, if the non-monetary c ontribution is paid or the share is received
by a member (shareholder) already holding majority interest or who obtains such majority interest upon formation.
(7) The provisions of Subsections (1)-(6) above sha ll also apply to transactions between a nonresident
entrepreneur and his Hungarian branch, or between a taxpayer and his foreign branch.
ASSESSMENT OF TAX
Chapter III
Corporate Tax Rate
Section 19
(1) Subject to the exceptions set out in Subsections (2) and (9), the corporate tax rate is 19 per cent of the
positive tax base.
(2) By way of derogation from what is contained in Subsection (1), if in compliance with the criteria laid
down in Subsection (3), the corporate tax shall be 10 pe r cent of the positive tax base up to fifty million forints
and 19 per cent for the part above fifty million forints.
(3) The 10 per cent tax rate may be applied by any taxpayer:
a) who did not claim any tax allowance under this Act; and
b) whose average number of employees register ed in the tax year is at least one; and
c) whose tax base or pre-tax profit for the current tax year a nd in the year before that – taking into consideration of
what is contained in Subsection (8) – reaches the income (profit) minimum, except if falling under the scope of
Subsection (6) of Section 6; and d) who had not been found in dissent with the requirement of distinguished labor relations as set out in the Act on
Public Finances during the current and the previous tax ye ar by a final and executable authentic resolution adopted
by the employment authority, the tax authority or the authority vested with powers to monitor and enforce
compliance with the principle of equal treatment, and – in th e case of judicial review of the said resolution – had not
been sanctioned by final court verdict by an employment penalty, a penalty under the Act on Equal Treatment and
the Promotion of Equal Opportunity or a default penalty under the Act on the Rules of Taxation. e) who declared pension and health insurance contributions during the tax year in the amount equal to at least
double of the prevailing monthly minimum wage in effect on the first day of the tax year, or – if the taxpayer is
established in any one of the regions and communities deemed most underprivileged pursuant to the relevant
regulation – in the sum received by mu ltiplying the average number of employees employed during the current year
by the annualized average of the prevailing monthly minimum wage. (4) Nine per cent of the tax base – up to fifty million forints – or if the tax base is less than fifty million forints, that
amount – shall be treated, for the purposes of the provisions governing state subsidies, as: a) aid provided under Article 4 of Commission Regulation (EC) No. 1857 /2006 of 15 December 2006 on the
application of Articles 87 and 88 of the Treaty to State aid to small and medium-sized enterprises active in the
production of agricultural products, if the taxpayer – if en gaged in primary agricultural production as well – uses the
amount tied up in accordance with Subsection (5) during the tax year exclusively for investment or development
projects, or to repay a loan borrowed for such purposes;
b) de minimis aid received during th e tax year, or, at the taxpayer’s discretion, as aid provided under the
Commission Regulation on State aid to small and medium-sized enterprises, if the taxpayer uses the amount tied up
in accordance with Subsection (5) exclusively for investment or development projects, or to repay a loan borrowed
for such purposes. (5) A sum covering the amount of tax unpaid according to Subsection (3) shall be shown under tied up reserves –
transferred from the retained earnings – on the last day of the tax year, and it may be released during the four tax
years following the tax year when the funds were tied up and appropriated for the following purposes:

a) developments – other than the ones listed under Subsection (6) – consistent with the costs involved; and/or
b) for the wage costs claimed in connection with the employment of workers with at least 50 per cent disability,
and/or previously unemployed person in accordance with Subsection (3) of Section 7, and/or first-time employees,
on condition that the above-specified employment rela tionship commenced after 31 December 2007; and/or
c) for the repayment of any part of a loan (including financial leasing arrangements) received from a financial
institution under a loan contract, except if the taxpayer pays the tax in the same amount as the released amount –
including if the funds were released not in compliance with the provisions contained in Subsection (4) – within thirty
days following the date of release. Furthermore, taxpayers shall pay the tax in the amount of any funds from their
tied-up account that is not released by the end of the fourth tax year that follows the tax year when the funds were
tied up – by the last day of the first month of the year that follows the fourth tax year -, or if wound up without
succession, in the amount that was not released by the time of winding up, within thirty days following the date of
winding up. The tax shall be paid with late charges added. Late charges shall be assessed as of the first day
immediately following the due date for filing the tax return in which the 10 per cent tax rate was claimed until the
day when the funds were released, or until the last day of th e period available for use, and shall be declared, together
with the tax assessed, in the first corporate tax return submitted following the said date. (6) The taxpayer may not use the prov ision tied up according to Subsection (5 ) for investment projects charged to
the provision for developments, or under the title of assets received as non-monetary, in-kind contributions or assets
received without compensation, nor in connection with tangible assets that cannot be depreciated or on which no
depreciation allowance may be claimed, with the exception of buildings and other properties protected under the
national scheme of historical monuments or placed under local protection, that were not charged to the provision for
developments. (7) In the application of Subsections (2)-(5):
a) the amount of de minimis aid shall be the same as the total of all tax allowances claimed for the tax year under
such title as a deduction from the pre-tax profit and calcu lated by the tax rate referred to in Subsection (2);
b) the average number of employees shall not include those persons whose income entails an obligation for the
payment of health services contributions only. (8) For the purposes of Paragraph c) of Subsection (3) of this Section, successors and taxpayers established
without a predecessor shall not apply during their first tax year the provisions pertaining to the previous tax year. For
the purposes of this Section, a foreign person shall be treated as a taxpayer established without predecessor in the
year in which it was required to regi ster with the state tax authority as a nonresident entrepreneur following 31
December 2000. For the purposes of this Section, a sole proprietorship shall be recognized as a taxpayer established
without predecessor. (9) The tax rate on the income of foreign organizations is 30 per cent.
(10) Where a private entrepreneur meets the obligation imposed on him by a binding administrative decision or by
a final court ruling adopted upon the judicial review of an administrative decision within the prescribed time limit or
by the prescribed deadline, it shall have no bearing on his non-compliance under Paragraph d) of Subsection (3) with
the requirement of distinguished labor relations as set out in the Act on Public Finances.
Tax Exemption
Section 20
(1) The following persons shall be exempt from tax liability:
a) foundations, public foundations, non-governmental organizations – with the exception of national interest
representation organizations – and public bodies not qua lifying as public-benefit organizations or priority
public-benefit organizations, as well as housing cooperatives, if the revenues realized from their business
operations, recorded pursuant to the regulations of speci fic other legislation applicable to their activity and
taking also into account the provisions of Schedule No. 6, are not more than ten million forints, and do not
exceed 10 per cent of total revenues realized in the tax year;
b)
c) voluntary mutual insurance funds, provided that the re venues of such funds generated from auxiliary business
operations do not exceed 20 per cent of total revenues, d) water works associations for the part of the tax base defined in Subsection (5) – in Subsection (6) as of 1 July
2009 – that, comprised in all revenue, represents income realized from activities conducted as public functions;

e) public-benefit or priority public-benefit nonprofit business associations, and social cooperatives for the
part of the tax base defined in Subsection (6) that, co mprised in all revenue, represents revenue realized from
preferential activities as established pursuant to Chapter E) of Schedule No. 6.
(2) social cooperatives, public-benefit or priority publ ic-benefit nonprofit business associations, and water
management associations may claim tax allowances in the proportion of the corporate tax reduced by tax
exemptions.
(3)
(4)
(5)
(6) For the purposes of Paragraph e) of Subsection (1) of this Section (Paragraph d) as of 1 July 2009) the tax base
shall comprise the sum established according to Secti on 13/A, decreased by the sum established according to
Paragraphs a), b) and d) of Subsection (2) of Section 13/A.
Tax Incentives Related to Investments
Section 21
(1)-(6)
(7) Taxpayers with registered offices or business establishments registered by the court of registry and/or the
competent local auth orities in socially and economi cally underdeveloped regions, as es tablished by the Government
Decree on the List of Favored Regions of Regional Development, may claim the whole amount of the tax as
investment tax allowance in respect of a project for manufacturing products commenced in the region after 31
December 1996, and operated there after starting up, of a va lue of at least three billion forints, for a period of ten
calendar years following the year in which the project was installed.
(8) The tax relief specified in Subsection (7), also if the conditions defined therein are satisfied, may be claimed in
the second tax year following the commissioning of the investment project and in subsequent tax years, only in such
tax years during which the annual average statistical number of employees employed by the taxpayer exceeds by at
least 100 persons the average number of employees empl oyed in the tax year preceding the time of commencement
of the investment project. (9) The taxpayer shall be eligible for the tax relief defi ned in Subsection (7), if the project is started up and
operated in a region that is considered socially and economically underdeveloped at the time the project is started.
The tax allowance shall be the amount of tax calculated as the percentage of total sales revenue comprising the sales
revenue from manufacturing operations. (10) Taxpayers may take advantage of tax relief by applying the provisions of Subsections (7)-(9)
correspondingly, if their regi stered office or business establishment regist ered with the competent court of registry
and/or with the competent local authorities is in a county , and said taxpayers commence and put into operation an
investment project in such county, in which the rate of unemployment was higher than 15 per cent on the date of
survey in the month of December, as measured by the government employment agency, in either of the two years
preceding the commencement of the investment project.
(11) Taxpayers may claim the entire am ount of tax as an investment tax relief for manufacturing projects with a
value of at least ten billion forints are started up after 31 December 1996 for a period of ten calendar years following
the year in which the project was started.
(12) The tax relief referred to in Subsection (11), also if the conditions defined therein are satisfied, may be taken
claimed only in those tax years during which the annual average statistical number of employees employed by the
taxpayer exceeds by at least 500 persons the average number of staff employed in the tax year preceding the day of
the opening of the investment project. (13) The tax relief defined in Subsections (7), (10) and (11) may be claimed in respect of the tax on the tax base
for 2011 for the last time. This tax relief shall not appl y to projects commencing subsequent to 31 December 2002.
(14) For the purposes of this Section, the value of the investment shall be determined on the basis of the purchase
or production value of record, taking into account all other conditions defined in this Act, from the date of
commencing the investment project up to the date of commissioning upon which entitlement for tax relief is granted,
and a decision shall be made by the taxpayer on the basis of which provisions of this Section the investment tax relief
is claimed; such decision may not be changed. (15) Taxpayers affected by merger or demerger may claim the tax relief described under Subsections (1)-(3), (7),
(10) and (11) in the tax year preceding the year of transformation for the last time.

(16) If the last calendar year for which tax allowance can be claimed is not identical to the tax year, the taxpayer
may claim any tax allowance under Subsections (7), (10), (11) and (13) from the tax on the tax base calculated (up to
two decimal places) for the period betwee n the last day of the second last tax year in which tax allowance can be
claimed and the end of the last calendar year according to the ratio of the number of days this period contains in
relation to 365 days.
Regional and Other Tax Incentives
Section 22
(1) The taxpayer shall be entitled to claim tax allowance up to the amount indicated in the sponsorship certificate
made out to his name under Point 36 of Section 4 from the tax due for the current tax year and the following three
tax years, irrespective of the fact that such allowance shall not increase the taxpayer’s pre-tax profit when
determining his tax base. (2)
(3) The total amount contained in the certificates of en titlement for tax allowance issued by the motion picture
authority in connection with any particular motion picture may not exceed 20 per cent of the part specified in
Subsection (10) of Section 12 of the MPA of the direct production costs as approved by the motion picture authority.
No certificate may be issued for a motion picture that is not eligible for indirect State aid according to the MPA.
(4)-(5)
(6)-(8)
(9) Taxpayers shall be entitled to a tax allowance of ten pe r cent of the wages and salaries charged during the tax
year to the costs of basic research, app lied research and experimental development, or paid to a software developer,
to be claimed during the tax year an d the following three tax years in equal installments; furthermore, any tax
allowance that was not claimed in the previous tax year(s), in the absence of any tax payable may be claimed during
the above-mentioned period. The aforesaid tax allowance may be claimed irrespective of the fact, whether or not the
taxpayer has deducted the costs of basic research, applied research and experimental development from the pre-tax
profit when determining his tax base.
(10) Small and medium-sized enterprises so qualified on the last day of the tax year may claim a tax allowance – in
addition to the tax allowance afforded under Subsection (9 ) – of 15 per cent of the wages and salaries and other
related expenses incurred in connection with the employment of a software developer during the tax year and the
following three tax years in equal installments; furthermore, any tax allowance that was not claimed in the previous
tax year(s), in the absence of any tax payable may be claimed during the above-mentioned period. For the purposes
of the provisions governing state subsid ies this tax allowance shall be treated as de minimis aid received for the tax
year. The aforesaid tax allowance may be claimed irrespective of the fact, whether or not the taxpayer has deducted
the costs of basic research, applied research and experimental development from the pre-tax profit when determining
his tax base.
(11)-(13)
(14) Pursuant to Section 58 of Act X of 2006 on Cooper atives, cooperative societies may claim 6.5 per cent of the
fellowship fund accumulated during the tax year in the form of tax allowance. For the purposes of the provisions
governing state subsidies this tax allowance shall be treated as de minimis aid received for the tax year.
Tax Allowance for Small and Medium-Sized Enterprises
Section 22/A
(1) Taxpayers qualified as small and medium -sized enterprises on the last day of the tax year shall be eligible for
tax allowances for the entire year when the relevant loan or financial leasing contract is signed regarding the
purchase or creation – financed by a financial institution – of a tangible asset, based on the interest on the loan if used
exclusively for this purpose (including a second loan obtained to refinance the first loan) and if contracted after 31
December 2000. (2) The tax allowance for the loan defined under Subsection (1) shall be 40 per cent of the interest paid during the
tax year.

(3) The taxpayer shall be eligible for the tax allowance in the tax year on the last day of which the tangible asset in
question is shown in its records; the last year of eligibility shall be the year in which the loan is to be paid off in full
as contracted. (4) The amount of tax allowance received pursuant to this Section shall not exceed six million forints per tax year.
The amount of tax allowance claimed by the taxpayer for the purposes of the provisions governing state subsidies, if
the investment serves the purpose of primary agricultural production, it may be claimed as an aid provided according
to Article 4 of Commission Regulation (EC) No. 1857/2006 of 15 December 2006 on the application of Articles 87
and 88 of the Treaty to State aid to small and medium-si zed enterprises active in the production of agricultural
products, in all other cases it shall be treated, at the taxpayer’s choice: a) as de minimis aid received for the tax year, or
b) as aid provided under the Commission Regulation on State aid to small and medium-sized enterprises.
(5) The taxpayer shall repay the tax allowance, with pena lty added, if the tangible asset to which it pertains:
a) is not put into operation within four years following th e year of the loan contract, unless for reasons of damage
that occurred as a consequence of unavoidable external reasons,
b) is alienated in the year in which it is placed into operation or in the three following years.
(6)
Investment Tax Incentives
Section 22/B
(1) Tax relief shall be granted to taxpayers:
a) for projects valued at three billion forints or more at current prices;
b) for projects started and operated within the administrative jurisdiction of a favored community local
government that satisfies the criteria specified in the Government Decree ad opted under authorization conferred by
this Act (hereinafter referred to as “government decree”), valued at one billion forints or more at current prices;
c) for projects valued at 100 million forints or more at current prices concerned with bringing an existing food
facility producing foodstuffs of animal origin into compliance with the requirements laid down in legal regulation
concerning food hygiene; d) for independent environmental protection or rehabilitation projects valued at 100 million forints or more at
current prices; e) for wideband internet service projects valued at 100 million fori nts or more at current prices:
ea) within the framework of existing fixed services by definition of the legislation on the national allocation of
frequency bands, or relating to the improvement of a fixed electronic communications network with subscriber
interface in accordance with Act C of 2003 on Electronic Communications, or
eb) implemented under a right to use a radio frequency obtained after 1 January 2006;
f) for projects concerning basic research, applied research and experimental development, if valued at 100 million
forints or more at current prices; g) for projects valued at 100 million forints or more at current prices exclusively for motion picture and video
production; h) for projects serving to create new jobs;
i) for projects valued at 100 million forints or more at current prices, if started following the day of introduction
(first day of trading) of shares issued to increase its subscribed capital (or a part of such shares) to a regulated market
that fits the definition contained in the Act on the Capital Market (hereinafter referred to as “regulated market”), not
later than the last day of the third year following this day;
j) for projects valued at 500 million forints or more at current prices, implemented by small and medium-sized
enterprises;
if operated in accordance with the relevant government decree, and if the project in question is for the creation of a
new facility, the expansion of an existing one or – with the exception of projects concerned with basic research,
applied research and experimental development – results in a significant improvement in the product manufactured or
in the service provided.
(2) The taxpayer shall determine the tax relief himself in accordance with the provisions of this Act and the
government decree. If the costs that can be deducted according to the relevant government decree exceed the forint
equivalent of 100 million euros at current prices, that are to be consolidated during the period specified in the
relevant government decree, the taxpayer may claim the tax relief in possession of the resolution of the minister,
adopted upon request.

(3) The tax relief may be claimed on condition that, prior to the commencement of the project, the taxpayer:
a) supplies to the minister all data and information prescribed in the government decree;
b) submits the application for tax relief to the minister in observation of the formal and content requirements laid
down in the government decree, if the tax relief can be claimed in possession of the resolution of the minister.
(4) No application for continuation shall be accepted if the notification referred to in Paragraph a) of Subsection
(3) is submitted in delay, furthermore, the notification cannot be supplemented or rectified following commencement
of the project. (5) Furthermore, eligibility for tax relief is subject to th e criteria that the emission limits prescribed by law or
regulatory resolution for the protection and conservation of the various elements of the environment and for
protection against effects that endanger the environment are not exceeded over a five-year period following the
completion and commissioning of the project. (6) The taxpayer can take advantage of tax relief in the ta x year following the year when the project was launched
– or in the same tax year at the taxpayer’s discretion – and in the following nine tax years, at the latest during the
fourteenth tax year following the tax year in whic h the notification or the application was submitted.
(7) The combined total of any tax allowance claimed by th e taxpayer and any other form of State aid specified in
the relevant government decree shall not exceed – at present value – the amount co mputed by the ratio stipulated in
the notification or in the relevant resolution if it pertains to authorization, calculated by the formula specified in the
government decree on the cost actua lly incurred at current prices.
(8) Tax relief for an independent environmental protection project referred to in Paragraph d) of Subsection (1)
may be claimed only if the applicant taxpayer’s tax liability dates back to five years or more reckoned from the date
when the request or notification was filed. A project shall be deemed an independent environmental protection
project if it exclusively serves the objective defined in Para graphs a)-c) of Subsection (2) of Section 1 of Act LIII of
1995 on the General Rules of Environmental Protection. (9) Tax relief for the projects referred to in Paragraphs a)-b) of Subsection (1) above shall be granted if during the
four tax years following the first year in which the tax allowance is used:
a) the average number of workers employed exceeds the average number of persons employed during the tax year
prior to the commencement of the proj ect, or – at the taxpayer’s discretion – the mathematical average calculated
based on the three tax years before the commencement of the project by at least 150 workers – or 75 workers if the
project is started and operated within the administrative jurisdiction of a fa vored municipal government specified in
the relevant government decree -, or; b) if the taxpayer’s annualized wage costs are at least six hundred times greater than the amount of the prevailing
minimum wage effective on the first day of the tax year as calculated for the tax year – or at least three hundred times
greater if the project is launched and operated within the administrative jurisdiction of a favored municipal
government specified in the relevant government decree – as compared to the annualized wage costs of the year
preceding the year in which th e project was launched, or – at the taxpayer’s discretion -the mathematical average of
wage costs calculated from the annualized data based on the period of three tax years before the commencement of
the project. (10) Tax relief for projects exclusively serving motion picture and video production shall be granted only if the
taxpayer undertakes the commitment to refrain in the firs t five years of operation from using the tangible assets
installed by the project for making any motion picture that is classified under Category V according to Section 5/B of
Act I of 1996 on Radio and Television Broadcasting. (11)
(12) In connection with projects for the processing and marketing of agricultural products under Paragraphs a)-c)
and h)-i) of Subsection (1) above, further requirements for ta x relief shall be laid down in the relevant government
decree.
(13) Tax relief for the projects referred to in Paragraph i) of Subsection (1) above shall be granted subject to the
following additional conditions: a) the nominal value of all securities admitted to the regulated market must be maintained at all times to cover at
least 50 per cent of the taxpayer’s subscribed capital from the day of admission to the regulated market until the last
day of the fifth tax year following the starting date of th e project, and the taxpayer is not transformed during this
time;
b) the first time the securities represen ting the subscribed capital of the taxpayer are admitted to a regulated market
is accomplished by way of the means specified in Paragraph a); c) the combined par value of all shares issued by the taxpayer for increasing its subscrib ed capital, and admitted to
the regulated market reaches at least 50 per cent of the eligible costs indicated in the application for tax relief or in
the notification at current prices;

d) at the time of submission of the application for tax relief, or the notification the taxpayer has at least twenty-five
shareholders holding the shares admitted to the regulated market, or at least 25 per cent of the shares admitted to the
regulated market are held by shareholders, none of whom has a holding of over five per cent of the nominal value of
the shares admitted to the regulated market. (14) Tax relief for the projects referred to in Paragraph j) of Subsection (1) above shall be granted if during the
four tax years following the first tax year in which the tax allowance is used: a) the average number of workers employed exceeds the average number of persons employed during the tax year
prior to the commencement of the proj ect, or – at the taxpayer’s discretion – the mathematical average calculated
based on the three tax years before the commencement of th e project by at least 20 workers in the case of small
enterprises or 50 workers in the case of medium-sized enterprises, or; b) if the annualized wage costs of small enterprises or medium -sized enterprises are, respectively, at least fifty or
one hundred times greater than the amount of the prevailing minimum wage effective on the first day of the tax year
as calculated for the tax year, or – at the taxpayer’s disc retion -the mathematical average of wage costs calculated
from the annualized data based on the period of th ree tax years before the commencement of the project.
(15) Additional requirements may be set out in the governmen t decree, apart from what is contained in this Act, or
it may contain restrictions concerning eligibility for tax relief. (16) Any taxpayer who is unable to comply with any of the conditions set out in this Act, in the government
decree and in the relevant resolution, shall not be entitled to claim the tax allowance referred to in Subsection (7),
and any tax allowance already claimed sh all be treated unlawful, with the exception if non-compliance is the result of
unavoidable reasons beyond the taxpayer’s control.
(17) The taxpayer shall be required to indicate the information specified in the relevant government decree in the
corporate tax return.
(18) The tax authority shall notify the treasury forthwith concerning all data in its possession pursuant to
Subsection (15), broken down by taxpayer and development project, whereby the treasury shall, when requested,
inform the minister on the basis of the data received in order to fulfill the oblig ation to provide such information as
prescribed by an international treaty promulgated by an ac t of law. All data received from the treasury shall be
subject to the provisions of the Act on the Rules of Taxation pertaining to tax secrets. (19) If the minister has adopted a resolution to grant aut horization in approval for eligibility for the tax allowance
it shall be delivered in due consideration of the opinion of the ministers affected, and upon the prior consent of the
European Commission, if necessary. The resolution must be adopted within sixty days from the date when the
application was submitted or when re-submitted so as to supplement any missing information. This deadline may be
extended once, by a maximum of sixty days. (20) Having regard to all proceedings conducted under this Section, the provisions of the Act on the General Rules
of Administrative Proceedings pert aining to communication by way of electronic means shall not apply.
Rules for Claiming Tax Incentives
Section 23
(1) Taxpayers entitled to 100 per cent tax relief in the tax y ear in accordance with Subsections (7), (10) and (11) of
Section 21, Subsections (6)-(7) of Section 22, Section 22/B as effective in 2003, and Paragraph d) of Subsection (5)
of Section 29 as well as taxpayers entitled to tax relief on the basis of Paragraph b) of Subsection (5) of Section 29
may claim such relief up to the extent of their corporate tax. (2) Investment tax incentives under Section 22/B may be claimed up to 80 per cent of the tax decreased by the tax
relief claimed according to Subsection (1) above.
(3) Additional tax allowances may be claimed up to 70 per cent of the tax decreased by the tax relief claimed
according to Subsections (1) and (2) above.
(4) The tax allowance may be used in the form of tax withholding.
(5) Nonresident entrepreneurs shall be entitled to the tax allowances available under this Act in connection with
improvements in their domestic business establishments, the annual average number of employees, and the sales
revenues generated by their Hungarian branches. (6) If the last year of eligibility for a tax allowance is spec ified in this Act, it shall be interpreted as the tax year
that includes the last day of the year specified.
Tax Payable

Section 24
The tax payable shall be the corporate tax established pursuant to Section 19, reduced by the tax relief and
corporate tax (or corresponding income tax) paid abroad with due consideration of the provisions of Section 28.
PROCEDURAL RULES AND TA X ADVANCE PAYMENT RULES
Chapter IV
Tax Liability of Foreign Organizations
Section 25
Declaration and Payment of Tax Advance
Section 26
(1) With the exceptions laid down in Subsections (3), (5) and (6), taxpayers shall declare the corporate tax advance
and indicate the amount applicable to the relevant period in the tax return for the 12-month period beginning on the
first day of the second month after the filing deadline. No tax advance shall be declared for the calendar month or
quarter, or for the calendar month in the quarter for wh ich the taxpayer has already declared the tax advance.
(2) The tax advance shall be:
a) the amount of tax payable for the previous year, if the duration of the previous tax year was 12 months,
b) the amount of tax payable for the previous tax year prorated for 12 months on the basis of the calendar days of
operation, in all other cases. (3) The successor shall declare the tax advance (depending on the form of transformation: equal, aggregated,
divided) calculated on the basis of the tax advance declared by the predecessor for the tax year, within thirty days of
the date of transformation and shall pay the tax advance on the basis thereof from the tax return’s due date until the
first day of the sixth month following the tax year. In the case of division, surviving business associations shall also
be regarded as successors for the purposes of this provision. (4) The European public limited-liability company or European cooperative society when taking over the
operations of a nonresident entrepreneur, or a nonresident entrepreneur when taking over the operations of a
European public limited-liability company or a European cooperative society shall declare the tax advance in the
same amount as declared, respectively, by the nonresident entrepreneur and the European public limited-liability
company, within thirty days for the 12-month period commencing on the first day of the second calendar month
following the original date of tax liability.
(5) Any changes made during the year in the type of currency used for bookkeeping shall not affect the tax
advance declared.
(6) The company that remains after division, or the re ceiving company after a merger shall not declare a tax
advance in the first tax return it files after the day of transformation, if transformation takes place before the tax
return for the previous year is filed.
(7) Unless otherwise provided for in Subsections (8)-(9), tax advances:
a) shall be due monthly in equal inst allments, if the previous year’s tax amount exceeds five million forints;
b) shall be due quarterly in equal installments, if the previous year’s tax amount is not more than five million
forints. (8) In the case of taxpayers operating in th e agriculture, forestry or fishery sectors:
a) 10 per cent of the annual tax advan ce shall be due in the first quarter of the tax year, 20 per cent in the second
quarter, 30 per cent in the third quarter and 40 per cent in the fourth quarter, if the previous year’s tax amount is not
more than five million forints, b) 3.3 per cent of the annual tax advance shall be due monthly in the first quarter of the tax year, 6.6 per cent in the
second quarter, 10 per cent in the third quarter and 13.4 pe r cent in the fourth quarter, if the previous year’s tax
amount exceeds five million forints.
(9)

(10) Resident taxpayers keeping double-entry books and nonresident entrepreneurs shall supplement the tax
advance to the amount of tax liability estimated for the tax year, where the am ount of tax liability estimated for the
tax year shall comprise – if the taxpayer receives any aid from the European Union and/or from the central budget –
the amount of tax calculated from the tax base that does no t include the aid not received by the fifteenth day of the
last month of the tax year in terms of revenues for the tax year. This provision shall not apply if the taxpayer’s
revenues for the previous tax year did not exceed fifty million forints.
(11) The provisions of Subsections (1)- (10) shall not be applied if the taxpayer is wound up, or if it files a tax
return in connection with the conclusi on of the company registration proceeding, nor shall it be applied by
ESOP trusts, public-benefit or priority public-benef it nonprofit business associations, water management
associations, foundations, public foundations, non-governmental organizations, public bodies, churches,
housing cooperatives, institutions of higher learning registered as public-benefit organizations or priority
public-benefit organizations, voluntary mutual insurance funds, social cooperatives and school cooperatives.
PART THREE
DIVIDEND TAX
Chapter V
Section 27
PART FOUR
ELIMINATION OF DOUBLE TAXATION
Chapter VI
Section 28
(1) The pre-tax profit of resident taxpayers and nonresident entrepreneurs shall be increased by any tax that is
equivalent to the corporate tax paid (or payable) abroad and shown under expenses.
(2) When establishing the corporate tax, resident taxpay ers and nonresident entrepreneurs shall so adjust the tax
base so that it contains: a) no income that is subject to taxation abroad, if so prescribed by international treaty, and
b) no interest income from abroad.
(3) In cases not mentioned in Subsection (2), resident taxpayers and nonresident entrepreneurs may deduct from
the corporate tax, in the form of withholding tax, any tax paid (or payable) abroad that is equivalent to corporate tax.
(4) In the application of Subsections (2) and (3) above, the amount of income from abroad shall be determined
pursuant to the provisions of this Act. Accordingly, income from abroad shall comprise the difference between the
revenue received – in the case of interest income, 75 per cent of the interest – minus the costs and expenses directly
related to the acquisition of such income, and other adjustment s to the pre-tax profit of either sign. The costs that are
not directly attributable to earning the income abroad, and that are not related exclusively to domestic gainful
operations, as well as the items increasing and reducing the pre-tax profit shall be allocated in the proportion of the
sales revenues and income from abroad to the amount of total sales revenues and income. (5) The sum defined in Subsec tion (3) above shall be determined separate ly for each type of income, and for each
state from which it originates. The tax deducted in connection with any one particular type of income must not
exceed the amount of tax paid (payable ) abroad or the amount that can be enforced abroad under international
agreement, whichever is smaller, or in the absence of any international agreement, it may not exceed 90 per cent of
the tax amount paid (payable) abroad and shown under charges, or, in all cases, maximum the tax amount calculated
by the mean tax rate pertaining to th at income. ‘Mean tax rate’ shall mean corporate tax minus tax allowances,
divided by the tax base, where the result is to be rounded off to two decimal places.
(6) In the application of Subsections (1 )-(5) above, tax liability equivalent to corporate tax shall also mean the tax
paid (payable) abroad on dividends received.

PART FIVE
TRANSITIONAL PROVISIONS
Chapter VII
Section 29
(1) The following provisions of Act LXXXVI of 1991 on Corporate Tax, as amended (hereinafter referred to as
“CTA”) shall continue to apply unde r unaltered conditions, if the transactio n took place before 31 December 1996:
a) Paragraph d) of Subsection (3) of Section 4, and Subsec tions (4) and (5) of Section 5, with due consideration of
Paragraph b) of Subsection (2) of Section 16 of Act XCIX of 1993;
b) Paragraph j) of Subsection (3) of Section 4, and S ubsection (12) of Section 5, with due consideration of
Subsection (3) of Section 13 of Act LXXXIII of 1994, with the exception that in the case of the termination of a
lease contract prior to expiry, the tax base shall be increased by the amount of accrued or deferred items related to
the lease contract and claimed as expenses , if it was not refunded to the taxpayer;
c) Paragraph s) of Subsection (3) of Section 4, and Subsection (9) of Section 5;
d) Subsection (16) of Section 19.
(2) The loss deferred in accordance with the provisions of Section 6 of the CTA may be written off from the pre-
tax profit under the conditions in force at the time of deferral. (3)-(4)
(5) Under the relevant provisions of the CTA, tax relief may be claimed in connection with corporate tax under the
following conditions: a)
b) the provisions of Sections 14/B and 14/C may be applied under the original conditions with due consideration
of the provisions of Paragraph b) of Subsection (5) of Section 13 of Act LXXXIII of 1994, Section 36 of Act
LXXVIII of 1996 and Section 23 of this Act;
c)
d) the tax relief authorized on a case-by-case basis by the Government under Subsections (2) and (3) of Section
14/A, enacted by Section 11 of Act XCIX of 1993, may be claimed in accordance with the contents of the
authorization and with Government Decree 190/1994 (XII. 31.) Korm., with due consideration of the provisions of
Section 23 of this Act. (6)-(7)
(8)
(9)
(10)
(11)-(12)
(13) Any reference made in this Act to previous year s in connection with corporate tax liabilities should be
interpreted to include the provisions of the CTA mutatis mutandis. (14)
(15) The provisions set out in Subsection (15) of Sectio n 21 shall not apply if the decision on the transformation
has been entered in an official document before 31 Decem ber 1997, or the document providing for such decision (in
particular, memorandum of association, articles of association, or contract on merger or demerger) has been
countersigned by a lawyer (legal counsel) by such point in time. (16) Taxpayers having commenced the investment project that is eligible for the tax relief specified in Subsection
(1) and Paragraph a) of Subs ection (3) of Section 21 before 31 December 1997, may exercise the option in 1998 to
claim such tax relief according to the regulations of said provisions in force on either 31 December 1997 or 1
January 1998, whereby a) in the event of exercisi ng the option for selecting the regulations in force on 1 January 1998, the 1997 sales
revenues shall be taken into account as the sales revenues of the previous year even if the taxpayer has claimed tax
relief from its 1997 tax on the basis of the regulations of the said provisions in force on 31 December 1997, b) the taxpayer shall remain bound to the aforesaid option in the years subsequent to 1998.
Section 29/A

(1) For the purposes of this Act, foundations, public foundations, civic organizations, public corporations shall be
deemed registered as nonprofit organizations or priority nonprofit organizations from 1 January 1998 to the point in
time set forth in the Act on Nonprofit Organizations, if th ey satisfy the provisions of Subsections (1) and (2) of
Section 27 of the Act on Nonprofit Organizations. Until their classification, such organizations shall indicate the
court reference number of the application for registration under nonprofit status in their certificates on donations.
From among those organizations, such whose application is rejected by the court before 1 January 1999 shall not be
considered as nonprofit organizations or priority nonprofit organizations in 1998. (2)-(8)
(9)
Section 29/B
(1)-(2)
(3)
(4)
(5)
(6) Taxpayers, if commencing the investment project that is eligible fo r tax relief by 31 December 1998, may
apply the provisions of Point 9 of Section 4 in for ce on 31 December 1998 for determining the value of the
investment project.
(7)
(8) In respect of tangible assets pu t into operation before 31 December 1998, the taxpayer shall be entitled to apply
the provisions of Schedules Nos. 1 and 2 as effective on 31 December 1998 without any changes; in this case,
however, the KSH Ipari Termékek Jegy zéke (Industrial Product List) in force on 31 December 1995 shall apply for
the classification of such tangible assets.
(9) The taxpayers who have commenced an investment project that is eligible for the tax relief specified in
Subsection (7) or (10), or Subsection (1 1) of Section 21 on or before 31 December 1998 shall be entitled to indicate
in their tax returns their choice of whether to apply the tax relief in accordance with the provisions of Subsection (8)
or (12) of Section 21 as effective on 31 December 1998, or on 1 January 1999 when first claiming such tax relief,
however the choice made therein shall be binding thereafter.
Section 29/C
(1)-(3)
(4)
(5)
(6)
(7) The taxpayer referred to in Paragraph g) of Subsection (2) of Section 2 shall apply the provisions of this Act in
effect on 31 December 2000 concerning the donations pledged under long-term donation contracts concluded before
31 December 2000.
(8) If the tax base for the period ending on 31 December 20 00 (or for the first tax year if the taxpayer is operating
as a pre-company on 31 Decemb er 2000) is negative, the provisions of Section 17 – in effect on 31 December 2000 –
shall be applied in accordance w ith Subsection (2) of Section 29.
(9)
(10)-(13)
Section 29/D
(1)-(2)
(3) Upon commencement of an investment project that is eligible for the tax relief defined in Subsections (7), (10)
and (11) of Section 21, in Paragraph d) of Subsection (5) of Section 29 or in Section 93 of Act CXXV of 1999 before
31 December 2002, or within forty-five days if commenced after 1 December 2002, the taxpayer shall disclose the
project information specified in the ministerial decree adopted under the authorization conferred upon the minister by
this Act. Failure to satisfy this obligation to make disclosure may be subject to the legal measures, other than the
procedural sanctions, laid down in an act in connection with the implementation of the Act promulgating the treaty
on the accession of the Republic of Hungary to the European Union.

(4) The minister in charge of taxation is hereby authorized to decree the detailed regulations governing the
notification requirement mentioned in Subsection (3) above.
(5) In relation to the tax relief defined in Subsections (7), (10) and (11) of Section 21, Paragraph d) of Subsection
(5) of Section 29, and Section 93 of Act CXXV of 1999 regulations may be adopted by an act by way of derogation
from the above provisions in connection with implementation of the Ac t promulgating the treaty on the accession of
the Republic of Hungary to the European Union. (6)-(7)
(8)
(9) The taxpayer having commissioned a building or structure before 31 December 2002 may determine its tax
base according to the provisions of Point 36 of Section 4 and Paragraph e) of Subsection (1) of Section 7 as effective
on 31 December 2002. (10) The taxpayer shall apply the provisions of Paragraphs i) and t) of Subsection (1) of Section 8, Paragraphs d)
and e) of Subsection (1) of Section 16 as well as those of Paragraph d) of Subsection (2) of Section 16 that are
effective on 31 December 2002 if the decision or agreement on its transformation is drawn up, signed and certified in
due legal form by 31 December 2002, or if the document containing such decision (in particular the memorandum of
association, the articles of association or the agreement on merger or demerger) is countersigned by an attorney or
legal counsel by the same date.
(11) The tax allowances specified in this Act must be claimed in the tax return that contains the taxpayer’s
decision adopted to that effect before the filing deadline. (12)
(13) In connection with investment-related tax relief, taxpay ers shall apply the provisions of this Act pertaining to
statistical classification that are eff ective on 31 December 2002. The rate of depreciation may, in due observation of
Subsection (8) of Section 29/B, also be determined according to the regulations on statistical classification and
customs headings in effect at the time at whic h the asset to which it pertains was commissioned.
(14) Taxpayers shall abide by the provisions of Subsection (5) of Section 18 in relation to contracts concluded
following the operative date of a ministerial decree issued under authorization gr anted by this Act. This obligation of
taxpayers shall apply to all contracts in force at the time of filing of the tax return for 2005 and all subsequent tax
years.
(15)
(16) In the application of Subsection (11) of this Section, if the taxpayer’s decision is for claiming all available tax
allowances and tax benefits when determining the taxes payabl e, it shall be taken into consideration in the process of
self-revision and tax audit as well.
Section 29/E
(1) Taxpayers shall be able to claim th e tax allowances specified in Subsections (7), (10) and (11) of Section 21,
Paragraph d) of Subsection (5) of Section 29 and in Sectio n 93 of Act CXXV of 1999 for determining the tax on the
tax base for the year in which the Act promulgating the treaty on the accession of the Republic of Hungary to the
European Union enters into force and for subsequent tax ye ars subject to the exceptions laid down in this Section.
(2) The present value of the tax allowances that the taxp ayer has claimed in connection with his taxes payable for
2003 and in subsequent years and the present value of other State aid granted for the same period must not exceed
the amount limit defined in Subsection (3). For the purposes of this provision ‘State aid’ means financial assistance,
whether non-repayable or provided under preferential terms from the subsystems of the central budget with respect
to eligible investment projects or other related assets and expenditures notified in accordance with the relevant
ministerial decree enacted under authorization conferred by this Act, if it constitutes loss of revenue or expenditure
from the point of view of public finances, with the exception of de minimis aid. (3) The value referred to in Subsection (2) above shall represent the value of patents, know-how, licenses,
software, and the capitalized value of formation and reorganization expenses claimed for 1997-2005 (hereinafter
referred to as “approved intangible assets”), the value of tangible assets and payments on account claimed for 2005,
furthermore, the value of any infrastructure project for the local public service functions of community local
governments that is installed and financed by the taxpayer or if the necessary funds for financing such project are
placed at the disposal of the local gove rnment (hereinafter referred to as “public service infrastructure project”), also
the costs of research and development, training costs and rental fees other than financial leasing in the amount
calculated on the basis of the present value of the figures disclosed in accordance with the ministerial decree on the
data to be reported in connection with corporate tax allowances, not to exceed the present value of the sums actually
claimed (hereinafter referred to as “adjuste d value”) according to the following formulas:

a) 100 per cent of the sum declared for public service infrastructure investment projects between 1997 and 2002;
b) the sums declared under costs of environmental protection projects, equipment used in basic research, applied
research and experimental development, the costs of basic research, applied research and experimental development,
costs of general and special training provided to employees between 1997 and 2002 multiplied by the applicable rate
of support determined in accordance with the provisions of the Government Decree on the Common System of
Exemption from the Ban on Government Subsidies Granted in Connection with Business Operations as effective on
1 January 2003; c) from the value declared under inta ngible assets for each year between 1997 and 2005 (not to exceed 25 per cent
of the value declared each year under tangible assets): ca) 75 per cent − or, if it pertains to the activity defined under Subsection (4), 30 per cent − if the investment
project eligible for tax relief was co mmenced before 31 December 1999,
cb) 50 per cent − or, if it pertains to the activity defined under Subsection (4), 20 per cent − if the investment
project eligible for tax relief was commenced after 31 December 1999; d) from the value declared under other assets, costs and expenses not mentioned under Paragraphs a)-c) for each
year between 1997 and 2005: da) 75 per cent − or, if it pertains to the activity defined under Subsection (4), 30 per cent − if the investment
project eligible for tax relief was co mmenced before 31 December 1999,
db) 50 per cent − or, if it pertains to the activity defined under Subsection (4), 20 per cent − if the investment
project eligible for tax relief was commenced after 31 December 1999. (4) The taxpayers referred to in Paragraphs c) and d) of Subsection (3) shall be construed as the taxpayers with
over 50 per cent of all revenues in the first tax year when claiming tax allowances originating from the activities
listed under Annex C of the Communication from the Commission entitled Multisectoral framework on regional aid
for large investment projects (notified under document No. C (2002) 315 (2002/C 70/04). (5) The present values referred to in Subsections (2) and (3) are to be calculated according to the formula and
reference rate published by the minister.
(6) Taxpayers shall determine the tax allowances to be claimed on the tax base for the year in which the Act
promulgating the treaty on the accession of the Republic of Hungary to the European Union enters into force,
according to the following:
a) determine the amount of tax allowance for which he is eligible without prejudice to the provisions laid down in
Subsections (1)-(5) (hereinafter referred to as “adjusted tax allowance”); b) determine the commensurate portion of the adjusted tax allowance by dividing the number of days in the tax
year by the number of days before the date of en try into force, to be claimed as a tax allowance;
c) in addition to the amount determined according to Paragraph b), the sum determined for the tax year under
Subsections (1)-(5) may also be claimed as a tax allowance.
(7) The provisions of Subsections (1)-(6) shall not apply to any tax allowance that – in the opinion of the European
Commission – does not concern commercial ties between any Member State of the European Union and Hungary.
The opinion of the European Commission is requested by the minister, at the taxpayer’s request, supported by the
evidence supplied by the taxpayer. (8) According to their choice, the taxp ayers regarded as small and medium-sized enterprises – in harmony with
Commission Recommendation 96/280/EEC on small and medium-sized enterprises – shall not be compelled to apply
the provisions of Subsections (1)-(6) on the day of commencement of an investment project that is eligible for tax
allowance even if they do not satisfy the requirements la id down in Subsection (7), provided they notify the tax
authority of this choice within forty -five days of the day on which the Ac t promulgating the treaty on the accession
of the Republic of Hungary to the European Union enters into force. No application for continuation will be accepted
past this deadline, and the taxpayer may not withdraw his notification.
(9) A taxpayer who has notified the tax authority of his choice under Subsection (8) shall, in the case of a merger,
be able to claim the tax allowance for the last time in the year preceding the y ear of transformation or, if there is a
change in a member (shareholder) hold ing majority control after notification has been ma de, in the year preceding
the change. (10) Taxpayers shall not be compelled to apply the provisions of Subsections (1)-(9), provided they notify the tax
authority of this selection within fort y-five days of the day on which the Ac t promulgating the treaty on the accession
of the Republic of Hungary to the European Union enters into force. No application for continuation will be accepted
past this deadline. On the basis of this notification the tax allowance claimed under Section 21 shall be treated as a
new aid according to the proceeding contained in Article 1/c) of Chapter 3 on competition policy of Annex IV of the
Act promulgating the treaty on th e accession of the Republic of Hungary to the European Union.

(11) The following may not be included in the value of approved intangible assets, tangible assets and investment
projects referred to in Subsection (3):
a) the original value of any assets that the taxpayer sells within five years from the date of commissioning or when
entered into the books (if the asset’s estimated useful economic life is less than five years) during the period of the
asset’s estimated useful economic life; b) the value of any asset employed for maintenance only, or – at the taxpayer’s discretion – 20 per cent of the
intangible assets or investment projects commissioned or en tered into the books after the fourth year following the
year in which the very first investment project was commenced in a particular place of business;
c) tangible and intangible assets that have been or are planned to be included in the base of the tax allowance
granted for investment projects. (12) Taxpayers engaged in the manufacture of communicat ions equipment or computer hardware and accessories,
when determining the limit referred to in Subsection (3) sh all – without prejudice to Paragraphs a)-b) of Subsection
(11) – apply either the total of any excess amount over the yearly total of the historical costs of approved intangible
assets, tangible assets and investment projects shown fo r the last day of each of the years between 1997 and 2005
over the amounts shown for the previous year, or if the historical costs of the aforementioned assets during the
aforementioned period, or during any of the years between 2006 and 2011 is lower than in the previous year.
Section 29/F
(1)
(2) Losses from the tax years beginning in 2001-2003 generated by the last day of these tax years, that are not yet
claimed in the tax base, may be written off according to the rules in effect for the period from which they originate.
(3) Taxpayers shall revise the data and information they have supplied pursuant to Subsection (3) of Section 29/D
consistent with legislative changes by 31 January 2004 as instructed in the ministerial decree enacted by
authorization conferred in this Act. No application fo r continuation shall be accepted upon missing the deadline.
(4) The provisions of Point 8 of Chapter B) of Schedule No. 3 in effect on 31 December 2003 shall apply to any
insurance premiums on policies the ta xpayer concluded before 31 December 2003 to the benefit of private
individuals in the taxpayer’s employment, or to the benef it executive officers, members personally participating in
the taxpayer’s operations, and their close relatives. (5) The provisions of Paragraph u) of Subsection (1) of S ection 8 in effect in 2003 shall apply to tax allowances
claimed under Paragraph zs) of Subsection (1) of Section 7 in effect for the tax years beginning in 2003 and before. (6)
Section 29/G
(1)
(2) Taxpayers may apply Paragraph t) of Subsection (1) of Section 7 in connection with experimental development
registered by 31 December 2004 according to the provisions in force at the time of registration, if having decided to
reduce the pre-tax profit in the same tax year in which the depreciation is claimed. (3) Taxpayers shall apply the provisions of Subsection (15) of Section 7 in connection with the provision for
developments first claimed under Paragraph f) of Subsecti on (1) of Section 7 in the tax return filed in accordance
with the provisions in fo rce on 31 December 2004.
(4) In connection with the applicati ons for investment tax incentives subm itted before 31 December 2004 and the
use of these tax allowances the provisions in force on 31 December 2004 shall apply.
(5) Point 10 of Schedule No. 3 shall apply in connectio n with the adjustments and irrecoverable receivables
claimed for the first time as of the tax year commencing in 2005.
Section 29/H
(1) With respect to any dividend paid (provided) after 30 June 2005 to a person who is a resident of the Swiss
Confederation, the provisions of Subsection (3) of Section 27 shall apply.
(2) The dividend recipient or the payer may apply for tax refund with respect to any dividend tax the payer has
deducted for the uninterrupted period if the share referred to in Subsection (3) of Section 27 was maintained for less
than two years and no guarantee had been provided, or with respect to any dividend tax paid by the payer, if provided
by means other than money, if the condition specified in Subsection (3) of Section 27 is satisfied.

Section 29/I
(1) Taxpayers shall be entitled to apply Subparagraph lb) of Subsection (1) and Subsection (22) of Section 7 of
this Act, as effective on 31 Decemb er 2009, to sums used for purchasing contemporary works of art and works of
applied art before 31 December 2009, if they applied those provisions in the tax year when the purchase was made.
(2) Taxpayers shall be entitled to apply Subparagraph ly) of Subsection (1) and Subsection (8) of Section 7 of this
Act, as effective on 31 December 2009, to
a) income obtained for the tax year in connection with liabilities cancelled or debts assumed before 31 December
2009;
b) income claimed for the tax year under the title of grant or support before 31 December 2009;
for the last time when establishing the tax base for the tax year, the last day of which is in 2012. (3) Financial companies shall be authorized to deduct in the tax return filed for the 2009 tax year and in the tax
returns filed for the following four tax years, in equal installments – up to the amount not taken into consideration
previously if terminated without succession – from the pre- tax profit the impairment loss claimed in connection with
any outstanding receivables as an increment to the pre-tax profit according to Paragraph gy) of Subsection (1) of
Section 8 – in force on 31 December 2008 – that was not yet deducted from the pre-tax profit. (4) Taxpayers shall be entitled to apply Paragraph w) of Subsection (1) of Section 7 of this Act, as effective on 31
December 2009, in connection w ith shares obtained before 31 December 2 009, if transferred before 31 December
2014. (5) In connection with the release of provisions for developments shown under tied-up reserves in the annual
account for 2008, the period with in which this right must be exercised shall be six tax years – provided that all other
statutory requirements are satisfied, wher e any reference made in Subsection (15) of Section 7 of the CorpTx. Act to
four tax years shall be understood as six tax years.
CLOSING PROVISIONS
Chapter VIII
Section 30
(1) This Act shall enter into force on 1 January 1997 and shall apply – subject to the exceptions set out in
Subsection (2) – to determining the 1997 tax base and the 1997 corporate tax and dividend tax liabilities for the first
time. (2)
(3) The minister shall publish in the Magyar Közlöny (Offi cial Hungarian Gazette) the names of the countries that
are the most common locations in which cont rolled foreign companies are established.
(4)
(5) Simultaneously with this Act entering into force:
a)
b)
c)
d) any reference made by legal regulations to Act LXXXVI of 1991 on Corporate Tax, it shall be understood as
this Act.
(6) The Government is hereby authorized to decree the detailed conditions of investment tax incentives, the rules
of authorization, the regulations relating authorization procedures, and the detailed conditions for the obligation of
disclosure in connection with the tax allowances. (7) The minister in charge of taxation is hereby authorized to decree the administration service fees payable with
the applications for investment tax incentives.
(8) The minister in charge of taxation is hereby authoriz ed to decree the detailed regulations governing the system
of records required in connect ion with fair market prices.
(9) The minister in charge of taxation is hereby authorized to decree the conditions for making changes in the data
notified in connection with corporate tax allowances.
Section 31

(1) This Act serves the purpose of compliance with the following legislation of the Communities:
a) Council Directive 90/434/EEC on the common system of taxation applicable to mergers, divisions, transfers of
assets and exchanges of shares concerning companies of different Member States;
b) Council Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies
and subsidiaries of different Member States;
c) Council Directive 2003/49/EC on a common system of taxation applicable to interest and royalty payments
made between associated companies of different Member States; d) Council Directive 2003/123/EC amending Directive 90/435/EEC on the common system of taxation applicable
in the case of parent companies and su bsidiaries of different Member States;
e) Council Directive 2005/19/EC amending Directive 90/434/EEC on the common system of taxation applicable
to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States;
f) Council Directive 2003/48/EC on taxation of savings income in the form of interest payments;
g) Council Directive 2006/98/EC of 20 November 2006 adapting certain Directives in the field of taxation, by
reason of the accession of Bulgaria and Romania.
(2) This Act contains regulations adopted with regard to the following documents in conformity with the
Convention on the Organization for Ec onomic Cooperation and Development (OECD) published by Act XV of
1998, including the related protocols and accession statements:
a) model agreement on income tax and wealth tax;
b) guidelines for international enterprises and for the tax authorities concerning the revision of prices between
affiliated enterprises.
c) Frascati Manual – Proposed Standard Practice for Surveys on Research and Experimental Development.
(3) This Act contains provisions for the implementation of the following legislation of the Communities:
Guidelines on national regional aid for 2007-2013 (2006/C 54/08), and State aid – Hungary – State aid No. N
651/2006. (4) This Act contains an aid scheme within the meaning of Commission Regulation (EC) No. 1857/2006 of 15
December 2006 on the application of Articles 87 and 88 of the Treaty to St ate aid to small and medium-sized
enterprises active in the production of agricultural products and amending Regulation (EC) No. 70/2001 (OJ L 358,
16.12.2006, p. 3). (5) Paragraph j) of Subsection (1), and Subsections (9) and (14) of Section 22/B of this Act shall be treated as a
regional investment aid scheme within the meaning of Commission Regulation (EC) No. 800/2008 of 6 August 2008
declaring certain categories of aid comp atible with the common market in application of Articles 87 and 88 of the
Treaty (General block exemption Regulation) (OJ 06. 08. 2008, p 3-47).
Implementing, Closing and Transitional Prov isions to the Amendments of Act
LXXXI of 1996 on Corporate Tax and Dividend Tax

Act XXXIII of 1998 on the Amendment of Tax Laws, the Accounting Act and Certain Other Acts Section 23
Section 74
(1) With the exceptions of Sections 26-28, Section 30, Sections 58-60, Subsection (3) of Section 63, Subsections
(2) and (3) of Section 65, Section 66, Section 67, Sections 71-73, and Subsections (6) and (8) of this Section, this Act
shall enter into force on 16 June 1998, however, concerning the issue of tax numbers, social security account
numbers and statistical codes to private entrepreneurs and the applications for such, the provisions in force prior to
the entry into force of this Act shall apply until 1 July 1998. (6)
Act CXIII of 2000 on the Amendment of Certain Acts Concerning Taxes, Mandatory Contributions and Other
Payments to the Central Budget
Section 268

(1) The provisions of Section 31-57 and Section 269 of this Act shall be applied for the first time – in due
observation of Subsections (2)-(5) and of Subsection (2) of Section 266 – in connection with the tax base for 2001
and the corporate tax and dividend tax liabilities for 2001.
(2)-(5)
Section 269
Act XLII of 2002 on the Amendment of Certain Acts Concerning Taxes, Mandatory Contributions and Other
Payments to the Central Budget
Section 303
(1) The provisions of this Act on the amendment of the Corp orate Tax Act shall be first applied, in observation of
Subsections (4)-(11), concerning the tax base for 2003 and the corporate tax and dividend tax liabilities for 2003. (2)-(7)
(8)-(9)
(10) Point 28 of Section 4, Subsection (2) of Section 19 and Subsection (7) of Section 29/B of the Corporate Tax
Act shall be repealed effective as of 1 January 2006. These provisions may be applied for the last time in the tax year
ending in 2005.
(11)
Section 304
Act XCI of 2003 on the Amendment of Certain Acts Concerning Taxes, Mandatory Contributions and Other
Payments to the Central Budget
Section 209
(1) The provisions of this Act on the amendment of the Corp orate Tax Act shall be first applied, in observation of
Subsections (2)-(9), concerning the tax base for the tax year beginning in 2004 and the corporate tax and dividend
tax liabilities for 2004.
(2)-(3)
(4) Simultaneously with this Act entering into force, th e passage “2001” in Subsection (5) of Section 303 of Act
XLII of 2002 on the Amendment of Certain Acts Concerning Taxes, Mandatory Contributions and Other Payments
to the Central Budget shall be repl aced by “2001-2002” in both instances.
(5) Paragraphs b) and c) of Subsection (1) of Section 7, Paragraph a) of Subsection (1) of Section 8 and Paragraph
h) of Subsection (2) of Section 16 of the Corporate Tax Ac t, as established by this Act, may be applied as of 1
January 2003. (6) Applications for tax allowance in connection with investment projects submitted before 31 December 2003
shall be evaluated according to the provi sions in force on 31 December 2003.
(7) With respect to the value of g oodwill shown by the taxpayer or his predecessor before 1 January 2004 the
provisions of the Corporate Tax Act in effect on 31 December 2003 shall apply, in due consideration of what is
contained in Subsection (8) below.
(8) The provision laid down in Subsection (7) shall be applied in consideration of the date prescribed therein,
regardless of whether the financial year corresponds with the calendar year or not.
(9) Taxpayers shall apply the provisions of Section 22/A of the Corporate Tax Act, as established by this Act, to
interest paid under a loan contract th at was concluded after 31 December 2003.
(10) Section 29/E of the Corporate Tax Act shall enter into force simultaneously with the Act promulgating the
treaty on the accession of the Republic of Hungary to the European Union.
(11)
(12) Private individuals may apply the provisions of Subsection (1) of Section 304 of Act XLII of 2002 on the
Amendment of Certain Acts Concerning Taxes, Mandatory Contributions and Other Payments to the Central Budget,
if payment of the one-off support in connection with the 2003 tax year is not effected before 2003, or before the tax
year that begins in 2003 if the taxpayers fa lls under the scope of the Corporate Tax Act.
Act CI of 2004 on the Amendment of Certain Acts C oncerning Taxes, Mandatory Contributions and Other
Payments to the Central Budget

Section 301
(1) The provisions of this Act for the amendment of the Corporate Tax Act shall – in due observation of
Subsections (2)-(11) – apply to determining the 2005 tax base and the 2005 corporate tax and dividend tax liabilities
for the first time. (2)-(3)
(4) Simultaneously with this Act entering into force, Para graph e) of Subsection (2) of Section 16 of the Corporate
Tax Act shall be repealed; however, it sha ll remain to be applied by the successor in the tax year beginning in 2005 if
the predecessor applied Paragraph ny) of Subsection (1) of Section 7 of the Corporate Tax Act as in force on 31
December 2004. (5)-(11)
Act XXVI of 2005 on the Amendment of Certain Acts Concerning Taxes and Mandatory Contributions
Section 55
(1) The provisions of this Act amending the Corporate Tax Act shall be first applied, with due regard to
Subsections (2)-(5) as well, to the assessment of the corporate tax base for the tax year commencing in 2005 and the
tax liability for 2005.
(2) The provision of this Act amending Section 21 of th e Corporate Tax Act shall enter into force on 1 January
2006, and simultaneously the passage “10 tax years follo wing the year in which the project was started” in
Subsections (7) and (11) of Section 21 of the Corporate Tax Act shall be replaced by “10 calendar years following
the year in which the project was started”. (3) The provision of this Act amending Section 22/B of the Corporate Tax Act shall enter into force on 1 July
2005. In connection with the applications for investment ta x incentives submitted before 30 June 2005 and the use of
these tax allowances the provisions in force on 30 June 2005 shall apply.
(4)
(5) Simultaneously with this Act entering into force Subs ection (6) of Section 29/F of the Corporate Tax Act shall
be repealed, and it shall not apply for the assessment of corporate tax liabilities for the tax year commencing in 2005.
Act CXIX of 2005 on the Amendment of Certain Acts Concerning Taxes, Mandatory Contributions and Other
Payments to the Central Budget
Section 180
(1) The provisions of this Act amending the Corporate Tax Act shall be first applied, with due regard to
Subsections (2)-(8), to the assessment of the corporate tax base for the tax year commencing in 2006 and the tax
liability for 2006.
(2) The provisions of this Act amending Schedules Nos. 1, 3 and 6 of the Corporate Tax Act may be first applied
to the assessment of the corporate tax base for the tax year commencing in 2005 and the tax liability for 2005.
(3) Section 29/H of the Corporate Tax Act, as establishe d by this Act, shall enter into force on the day of
promulgation, however, the provisions of Subsection (2) may be applied to dividends paid (provided) after 30 April
2004. (4)-(7)
(8) Effective as of 1 January 2006, Subsections (6)-(7) of Section 2, Section 27, and Subsection (8) of Section 29
of the Corporate Tax Act shall be repealed; however, with respect to any dividend paid (provided) before 31
December 2005 under guarantee the provisions in effect at the time it was paid (provided) shall apply.
a)-e)
Act LXI of 2006 on the Amendments of Financial Regulations
Section 225
(1) The provisions of this Act amending the Corporate Tax Act shall be applied for the first time, with due regard
to Subsections (2)-(15), to the assessment of the corporat e tax base for the tax year commencing in 2007 and the tax
liability for 2007. (2) Subsection (5) of Section 5, Subsection (7) of Section 5, Subsection (4) of Section 6, the title to Section 9,
Paragraph b) of Subsection (2) of Section 9, the introductory sentence to and Subparagraph ca) of Paragraph c) of
Subsection (3) of Section 9, Subsection (7) of Section 13, Paragraph b) of Subsection (1) of Section 20, Subsection

(2) of Section 20, Subsections (10)-(11) of Section 26, Point 13 of Schedule No. 5, the title to Schedule No. 6 of the
Corporate Tax Act, as established by this Act, shall enter in to force at the time of promulgation of this Act, and the
passage “own stock” in Paragraph m) of Subsection (1) of Section 7 shall be replaced by “own shares and own
converted investment share certificates”, and they shall apply as of 1 July 2006.
(3) Subsection (6) of Section 13, Subparagraphs ci)-ck) of Paragraph c) of Subsection (1) of Section 16, Paragraph
a) of Subsection (2) of Section 16, and Subsection (12) of S ection 17 of the Corporate Tax Act, as established by this
Act, shall enter into force at the time of promulgation of this Act, and they may also be applied to the assessment of
the corporate tax base for the tax year commencing in 2006 and the tax liability for 2006. (4) Point 14 of Schedule No. 1 of the Corporate Tax Act, as established by this Act, shall enter into force at the
time of promulgation of this Act, and it may also be applie d for the first time to the assessment of the corporate tax
base for the 2005 tax year and the tax lia bility for the tax year commencing in 2005.
(5)
(6) Effective as of 1 July 2009, in the title to Section 13 /A of the Corporate Tax Act the passage “and of social
cooperatives” shall be replaced by “, social cooperatives and of water work s associations”, and simultaneously the
passage “with public-benefit or priority public-benefit stat us” in Subsection (1) of Section 13/A shall be replaced by
“with public-benefit or priority public-benefit status and of water works associations”.
(7) The entry into force of the provisions of this Act amending Section 22/B of the Corporate Tax Act shall be
provided for in another act. (8) Upon the time of the act referred to in Subsection (7) entering into force, Subsection (5) of Section 22/B,
Paragraph c) of Subsection (9) of Section 22/B and Subsection (16) of Section 22/B of the Corporate Tax Act shall
be repealed. (9) On the day of promulgation of this Act, Paragraphs b) and c) of Subsection (2) of Section 16 of the Corporate
Tax Act shall be repealed, whereby the tax base for 2006 and the tax liability for 2006 may be determined in due
observation of this provision. (10)
(11)
(12) Effective as of 1 July 2009, Section 13 of the Corporate Tax Act and the preceding title, Paragraph b) of
Subsection (1) and Subsection (5) of Section 20, Subsection (3) of Section 29/B, in the title to Chapter C) of
Schedule No. 6 the passage “nonprofit company,”, in Subsec tion (7) of Section 5 the passage “, nonprofit company”,
in Subsection (4) of Section 6 the passage “nonprofit co mpany,”, in Subsection (2) of Section 20 the passage
“nonprofit company”, in Subsection (11) of Section 26 the passage “nonprofit company,”, and in Subsection (1) of
Section 29/A of the Corporate Tax Act the passage “and nonprofit companies” shall be repealed.
(13) The taxpayer shall add the retained earnings before tax as shown in the financial statement drawn up
according to the provisions of Subsection (6) of Section 10 of the Corporate Tax Act in effect on 31 December 2006
to his pre-tax profit (hereinafter referred to as “retained earnings of record”) distributed evenly among the tax years
commencing in 2007 and the following two tax years, except if: a) transformed into a public-benefit orga nization, or if it continues to operate in the form of a public-benefit or
priority public-benefit nonprof it business association, or
b) holding a priority or conditional certificate according to specific other le gislation and – in accordance with
specific other legislation – the ratio of employment of disabled workers or persons who suffered some degree of
health impairment subject to aid in the form of wage subsidies has reached or is higher than 70 per cent during the
tax year and in the following two tax years, however, if either of the conditions referred to in Paragr aph b) are not satisfied, the taxpayer shall increase his pre-
tax profit in the tax return filed for the third tax year by 12 0 per cent of that part of the retained earnings of record
that was not previously added to the pre-tax profit.
(14) In connection with the assessment of tax liabilities fo r 2006, the successor of a designated organization is not
required to apply Subsection (5) of Section 10 of the Corporate Tax Act if it is a public-benefit organization.
(15) Institutions of higher learning (including the institutions they have established), and student hostels shall
determine the data required for their tax base for 2006 by deducting the appropriate figures shown in the interim
balance sheet (and the underlying records) dated 30 June 2006 from the figures shown in the financial statement (and
the underlying records) prepared for 2006.
(16)
(17) The provisions of Subparagraph b) of Paragraph m) of Subsection (1) of Section 8 of the Corporate Tax Act,
as amended by this Act, may be applied to shares acq uired after the time of this Act entering into force.
Act CXXXI of 2006 on the Amendments of Financial Regulations

Section 126
(1) The provisions of this Act amending the Corporate Tax Act shall enter into force – subject to the exceptions set
out in Subsections (2)-(3) – on 1 January 2007. (2) Subsection (9) of Section 6 of the Corporate Tax Act, as established by this Act, shall enter into force on 15
February 2007 and shall apply to cases of natural disaster that have occurred after the time of entry into force.
(3) The provision of this Act establishing Paragraphs c) and e) of Subsection (1) of Section 22/B of the Corporate
Tax Act shall enter into force on 1 January 2008.
Section 127
Section 149
(1)-(2) Section 172
Section 192
(1) The provisions of the Corporate Tax Act, as establishe d by this Act, shall be first applied to the tax liabilities
for the tax year beginning in 2007.
(2)
(3) Paragraph d) of Subsection (1) of Section 20 of the Co rporate Tax Act, enacted by this Act, may be applied for
the assessment of the tax base for the tax year beginning in 2006 and for corporate tax liability for the 2006 tax year.
(4) The provisions of Point 5 of Section 4, Paragraph dz) of Subsection (1) of Section 7, Subparagraph b) of
Paragraph dzs) of Subsection (1) of Section 7 and Subparagra ph b) of Paragraph dzs) of Subsection (1) of Section 8
of the Corporate Tax Act, as established by this Act, may be applied initially to shares acquired after 1 January 2007.
Section 193
Investment tax incentives may be claimed according to the provisions in effect at the time of submission of the
application or notification, with the exception that any application lodged before 31 December 2006 shall be
adjudged – if the relevant resolution is not issued by that time – by the minister in charge of taxation according to
Section 22/B of the Corporate Tax Act, as established by this Act, and to Government Decree 206/2006 (X. 16.)
Korm. on Investment Tax Incentives. Taxpayers shall supply any missing information that may be required for such
decision within an insufficient information procedure. Act XXXIX of 2007 on the Amendment of Tax Laws
Section 9
(1) This Act – subject to the exceptions set out in Subsections (3)-(4) – shall enter into force on the eighth day
following promulgation.
(6) In the application of Paragraph b) of Subsection (5) of Section 6 of the Corporate Tax Act, taxpayers shall
have the option to apply – in the 2007 tax year – the tax ra te specified in Section 19 of the Corporate Tax Act, taking
into consideration the provisions of the relevant international agreement:
a) to the combined total calculated ba sed upon the ratio (up to two decimal pl aces) of the number of calendar days
from the first day of the tax year up until the 30th of June relative to the days of operation during the entire tax year,
from the tax base established according to Subsection (1) of Section 6 of the Corporate Tax Act for the whole 2007
tax year, and the ratio (up to two decimal places) of the number of calendar days from the first day of July up until
the last day of the tax year relative to the days of operation during the entire tax year, from the income (profit)
minimum established according to Subsection (7) of Section 6 of the Corporate Tax Act for the whole 2007 tax year;
or b) to a tax base comprising the combined total of:
ba) the tax base established according to Subsection (1) of Section 6 of the Corporate Tax Act based on the interim
accounting statement dated 30 June 2007; and

bb) the sum that is in excess of the income (profit) minimum established according to Subsection (7) of Section 6
of the Corporate Tax Act under the interim accounting stat ement dated 30 June 2007, from the income (profit)
minimum determined on the basis of th e annual account filed for the 2007 tax year according to Subsection (7) of
Section 6 of the Corporate Tax Act. (7) If applying Paragraph b) of Subsection (6), the taxpayer shall:
a) draw up an interim accounting statement for 30 June 2007, and shall retain it within the term of limitation of the
right of tax assessment, with the exception that the audit re quirement prescribed in specific other legislation shall not
apply to such interim accounting statement;
b) decide on the application of Subsection (5) of Section 6 of the Corporate Tax Act based on the pre-tax profit
specified in Subsection (2) of Section 6 of the Corporate Tax Act established for the period between 1 July and the
last day of the tax year shown as the difference betwee n the financial statement filed for 2007 and the interim
accounting statement, and the income (pro fit) minimum specified in Subsection (7) of Section 6 of the Corporate Tax
Act. Act CXXVI of 2007 on the Amendment of Tax Laws
Section 371
(1) The provisions of this Act amending the Corporate Tax Act shall enter into force – subject to the exception set
out in Subsection (2) – on 1 January 2008.
(2) Paragraph i) of Subsection (1) and Subsection (13) of Section 22/B of the Corporate Tax Act, as amended by
this Act, shall enter into force on 1 September 2008.
Section 469
(1) The provisions contained in Paragraph c) of Subsection (6) and Subsection (10) of Section 6, Paragraph ly) of
Subsection (1) of Section 7, and Subsection (15) of Section 7 of the Corporate Tax Act, as amended by this Act, may
be applied for the assessment of tax liabilities for 2007. (2) Within the meaning of Paragraph ly) of Subsection (1) of Section 7 of the Corporate Tax Act, from the sum
shown under deferred expenses and accru ed income in connection with assets received without compensation before
1 January 2007, the sum that is brought forward in the ta x year shall be deducted from the pre-tax profit as of 1
January 2007. (3) The taxpayer may apply Paragraph q) of Subsection (1) of Section 7 of the Corporate Tax Act, as effective on
31 December 2007, if having concluded before 31 December 20 07 a contract for government-guaranteed loan for the
renovation or rehabilitation of a bu ilding protected under the national scheme of historical monuments.
(4) The taxpayer may apply Paragraph ty ) of Subsection (1) of Section 7 of the Corporate Tax Act, as effective on
31 December 2007, if having leased the residential suite to the local government before 1 January 2008, and shall
apply Subsection (21) of Section 7 of the Corporate Tax Act if having applied the provisions of Paragraph ty) of
Subsection (1) of Section 7 of the Corporate Tax Act in any tax year, and the event described in Subsection (21) of
Section 7 takes place. (5) The provisions of Subsection (17) of Section 7 of the Corporate Tax Act, as effective on 31 December 2007,
may be applied for the last time in 2011, if the taxpayer ha s had been engaged in basic research, applied research and
experimental development performed on premises managed by a research institution (research facility) founded by
an institution of higher education and the Magyar Tudományos Akadémia (Hungarian Academy of Sciences) since
before 1 January 2008. (6) The provisions of Subsections (10) and (13) of Section 16 of the Corporate Tax Act, as amended by this Act,
may be applied in connection with tax returns filed for 200 7, if the deadline for filing is subsequent to 31 December
2007.
(7) The provisions of:
a) Subsection (5) of Section 18 of the Corporate Tax Act, as amended by this Act, may be applied to the
accounting records for the 2007 tax year, b) Subsection (6) of Section 18 of the Corporate Tax Act, as amended by this Act, shall also be applied to
dividends (dividend liabilities) pe rformed after 31 December 2007.
(8) The provisions of Section 22/B of the Corporate Tax Act may be applied, as effective at the time of submission
of the application or the notification, if the taxpayer has filed an application or notification for tax relief in
connection with projects concerning basi c research, applied research and experimental development performed on

premises managed by a research institution (research facility) founded by an institution of higher education, the
Magyar Tudományos Akadémia or by a bu dgetary institution before 31 December 2007.
(9) Taxpayers may apply:
a) Subsection (1) of Section 22 of the Corporate Tax Act, as amended by this Act, for the tax liabilities of the tax
year beginning in 2004 for the first time;
b) Subsection (9) of Section 22 of the Corporate Tax Act, as amended by this Act, for the tax liabilities of the tax
year beginning in 2005 for the first time; c) Subsection (10) of Section 22 of the Corporate Tax Act, as amended by this Act, for the tax liabilities of the tax
year beginning in 2006 for the first time. (10) Paragraph i) of Subsection (1) and Subsection (13) of Section 22/B of the Corporate Tax Act, as established
by this Act, and Subsection (12) of Section 22/B of the Corporate Tax Act, as amended by this Act, may be first
applied in connection w ith the introduction of shares into a regulated market, if it takes place following 1 September
2008. Act LXXXI of 2008 on the Amendment of Certain Acts Concerning Taxes and Mandatory Contributions
Section 275
(1) Where a taxpayer functions as a public benefit organization and operates in the form of nonprofit private
limited-liability comp any, if lacking public-ben efit or priority public-benefit status, shall comply with his tax liability
for the 2009 tax year as per the following: a) shall have the option to deduct either of the following from the corporate tax assessed for the entire tax year
according to the relevant provisions of the Corporate Tax Act:
1. the part of the revenues from preferential activities performed during the period functioning as a public benefit
organization in the 2009 tax year calcu lated – up to two decimal places – accord ing to Chapter C) of Schedule No. 6
to the Corporate Tax Act in effect on 30 June 2009 relative to the total revenue for the tax year, or 2. the amount of tax corresponding to the tax exemption calculated according to Paragraph b) of Subsection (1) of
Section 20 of the Corporate Tax Act, in effect on 30 June 2009, under the interim accounting statement prepared on
the last day of functioning as a public benefit organization;
b) shall have the option to determine the local business tax base under the LTA, the innovation contribution base
under the RD Act, and the special tax base under the BTA (hereinafter referred to as “tax base”) either:
1. by calculating the tax base for the entire tax year prorated for the number of days functioning as a nonprofit
business association between the day of registration and the last day of the tax year, showing to two decimal places,
or
2. by deducting the tax base calculated according to the interim accounting statement prepared on the last day of
functioning as a public benefit organization from the tax base assessed for the entire tax year. (2) When exercising the options described in Points a)/2 and b)/2 of Subsection (1), the taxpayer is required to
draw up interim accounting statement for the last day of functi oning as a public benefit organization, and shall retain
it until the right of enforcement of such liabilities expire s. The audit requirement prescribed in specific other
legislation shall not apply to such interim accounting statement.
(3) Any nonprofit private limited-liability company that functions as a public benefit organization in the 2009 tax
year in the absence of public -benefit or priority public-benefit status, furthe rmore, in respect of the transformation of
a public-benefit organization the successor, if other than a public-benefit or priority public-benefit nonprofit business
association, shall increase its pre-tax profit by the tax-free amount of the equity stated in accordance with Subsection
(2) of Section 13 of the Corporate Tax Act as in effect on 30 June 2009.
Section 276
(1) In the process of determining the corporate tax liability for the 2008 and 2009 tax years by the application of
Paragraphs g) and gy) of Subsection (1) of Section 7 of the Corporate Tax Act, taxpayers shall have the option to
deduct from their pre-tax profit the dividend and profit-sharing received or due from a controlled foreign company
and shown as income for the tax year, as well as 75 pe r cent of the income received from the controlled foreign
company on account of being terminated without succession, or if its subscribed capital is decreased through
disinvestment, provided that the taxpayer invests an amount equivalent to 50 per cent of such income – by 30 June
2009 – in debt securities issued by the Hungarian State (government securities), and keeps this sum exclusively in
such government securities for a period of two years from th e time of the original investment. Having transferred the
invested sum into a bank account or clie nt account in the case of expiry or exchange of these securities for not more

than fifteen days on occasion shall not be construed as a breach of the aforesaid condition. Taxpayers shall be
entitled to claim the above-specified tax incentive for reducing the pre-tax profit only if the controlled foreign
company has declared the income from which the dividend is paid on or before 30 June 2008, recognized as revenue.
(2) In the process of determining the special tax liability for the 2008 and 2009 tax years by the application of
Paragraph a) of Subsection (3) of Section 3 of the BTA, taxpayers shall have the option to deduct from their special
tax base 75 per cent of the dividend and profit-sharing received or due from a controlled foreign company, provided
that the taxpayer invests an amount equiva lent to 50 per cent of such income – by 30 June 2009 – in debt securities
issued by the Hungarian State (government securities), and keeps this sum exclusively in such government securities
for a period of two years from the time of the original in vestment. Having transferred the invested sum into a bank
account or client account in the case of expiry or exchange of these securities for not more than fifteen days on
occasion shall not be construed as a br each of the aforesaid condition. Taxpayers shall be entitled to claim the above-
specified tax incentive for reducing the pre-tax profit only if the controlled foreign comp any has declared the income
from which the dividend is paid on or before 30 June 2008, recognized as revenue. (3) In the process of determining the personal income tax liability for the 2008 and 2009 tax years, private
individuals shall pay the tax at the rate specified in Paragraph a) of Subsection (2) of Section 66 of the PIA, as
established by this Act, on their income specified in Subsections (12) and (13) of Section 28 of the PIA, provided
that the private individual invests an amount equivalent to 50 per cent of such income – within thirty days of
acquiring the income or by 30 June 2009 at the latest – in debt securities issued by the Hungarian State (government
securities), and keeps this sum exclusively in such governme nt securities for a period of two years from the time of
the original investment. Having transfer red the invested sum into a bank account or client account in the case of
expiry or exchange of these securities fo r not more than fifteen days on occasion shall not be construed as a breach of
the aforesaid condition. Private indivi duals shall indicate the amount of inco me invested in accordance with this
Subsection in the tax return filed without assistance from the tax authority for information purposes. Taxpayers shall
be entitled to claim the above-specified tax incentive only if the controlled foreign company has declared the income
from which the dividend is paid on or before 30 June 2008, recognized as revenue. (4) The provisions set out in Subsections (1)-(3) above shall not apply to any income:
a) received from a controlled fo reign company (other organization) that is established in a low tax-rate state that is
not a member of the Organization for Economic Cooperation and Development (OECD), such as Andorra, Monaco
or Liechtenstein;
b) that originates from criminal activities.
(5) For the purposes of tax liability, the income of pr ivate individuals taken into account in accordance with
Subsections (1)-(3) shall not be construed as enrichment, and in connection with such income enrichment cannot be
presumed or declared.
Section 277
(1) Where the taxpayer claims either of the benefits described in Subsections (1)-(3) of Section 276 and if the
taxpayer invests the income received from the person descri bed in these provisions by way of the means specified
therein in the percentages indicated in Subsections (1)-(3) of Section 276, the income acquired through any dealings
of the person providing the aforesaid income, underlying the incomes (or parts of them) referred to in Subsections
(1), (2) or (3) of Section 276, and the payee has declared the income from which the said income was paid on or
before 30 June 2008, recognized as revenue, the taxpayer, nor any other person falling within the scope of the
Corporate Tax Act or the PIA and the persons to whom the Corporate Tax Act or the PIA does not apply
a) may not be subjected to retrospec tive tax assessment within the meaning of the RTA, the Corporate Tax Act,
the PIA or the BTA, nor within the meaning of any other legislation on taxation or duties; and
b) no criminal liability may be established relating to the origin and receipt of such income in terms of tax and
duty obligations, accounting obligations, and in terms of ma king out documents relating to the origin and receipt of
such income, including the use of such documents, nor in terms of any financial transactions conducted with such
income. The exemption referred to in this Subsection shall expres sly apply to those persons as well, who did not declare
the revenue received from such payees as income for tax purposes. (2) The competent authority shall be entitled to request – in the process of audit of a taxpayer who claimed either
of the benefits described in Subsections (1)-(3) of Sec tion 276 of this Act – the taxpayer to produce a written
statement as to which of his income comprised the revenue mentioned in Subsections (1)-(3) of Section 276. If the
taxpayer provides the said statement to the tax authority within thirty days of receipt of notice, the tax authority’s
jurisdiction shall be limited to check the authenticity of the statement.

Act LXXVII of 2009 Section 207.
(1) These provisions shall initially apply to tax liability for the 2009 tax year.
(2) These provisions shall apply to tax liability for the 2010 tax year.
(3) These provisions may be applied if the tax base for the 2009 is negative.
Schedule No. 1 to Act LXXXI of 1996
Depreciation
1. Where different rules and depreciation rates are contai ned in the schedules in respect of the same assets,
taxpayers shall have the option to choose at their discretion.
2. Intangible assets and tangible assets may be depreciated from the day they were commissioned or validated
(including the day after the transformation in respect of assets that ha d already been received by the successor and
put into operation by the predecessor) until the asset is retired (or if transferred to the current assets account) or until
the day the taxpayer is terminated, as applicable. The depreci ation shall be prorated for the period in which the asset
was in service. 3. Depreciation shall be calculated as consistent with the cost of the tangible asset depreciated. A tangible asset
that had been put into operation by the predecessor may also be calculated on the basis of the cost shown by the
predecessor at the time of transformation. The amount of depreciation deducted from the pre-tax profit shall not
exceed the cost of the asset show n in the taxpayer’s records.
4. Assets for which no ordinary depr eciation can be claimed according to the Accounting Act as well as assets that
do not depreciate shall not be depreciated. This provision sh all not apply with respect to assets whose recorded book
value indicates zero or – on account of claiming ordinary depreciation – the residual value after it has been fully
depreciated, or in connecti on with which any extraordinary depreciation has been claimed in accordance with the
Accounting Act pursuant to separate provisions of this Act, and in connection with buildings and similar structures.
If a parcel of land comprises part of a tangible asset, th e purchase price of the land must be recorded separately.
5. Ordinary depreciation, as defined in the Accounting Act, (including lump-sum depreciation) may be claimed
on:
a) intangible assets and rights to immovables, in consideration of the provisions contained in Point 13,
b) tangible assets realized within the framework of concession,
c) tangible assets of industrial parks qualifying as public utilities thereof, engineering works of roads, water,
sewage, energy and telecommunications lines, d) in mining, for buildings, engineering structures, special machines, fittings and furnishings, equipment,
underground mine spaces and structures serving one particular mine, as well as related special machinery and land
area used, furthermore, in the electricity industry, for the technical buildings and structures of nuclear power stations,
e) tangible assets with a cost of 200,000 forints or less and tangible assets falling under the 33 per cent rate as
defined in Paragraph a) of Chapter IV of Schedule No. 2,
f) brood stock,
g) tangible assets that are used exclusively for basic re search, applied research and/or experimental development,
h) motor vehicles used for the carriage of passengers.
6. A 30 per cent per annum depreciation may be claimed on machines and equipment put into operation by the
taxpayer or its predecessor after 31 December 1995 and ne ver used previously, falling under headings 8401, 8405-
8408, 8410-8430, 8432-8447, 8449-8465, 8467, 8468, 8474- 8485, 8508, 8515, 8701, 8709 and 8716 HS; electric
apparatuses falling under headings 8501, 8502, 8504-8507, 8511-8513, 8530, 8531, 8535-8537, 8539, 8543-8548,
9006 and 9405 HS; boilers falling under heading 8403 HS; and steam generation equipment falling under heading
8402 HS. 7. Lessors may claim a 5 per cent depreciation allowan ce for leased buildings, engineering structures and
plantations stated among their assets, and a 30 per cent de preciation allowance for all other leased tangible assets.
7/a. Taxpayers operating in the commercial lodging an d hospitality sector may apply 3 per cent depreciation
during the full tax year for buildings of long-life structure recorded under tangible assets and directly serving the said
activities.

8. Taxpayers may claim 50 per cent depreciation in connection with general purpose computers and computer
accessories falling unde r heading 8471 HS.
8.a) Taxpayers may claim 50 per cent depreciation in connection with equipment exclusively serving motion
picture and video production. 9. Taxpayers may claim 50 per cent depreciation in connection with brand new tangible assets that are acquired or
produced in 2003 or subsequently and are subject to a 33 or 14.5 per cent rate under Chapter IV of Schedule No. 2,
and intellectual property purchased or produced in 2003 or subsequently, and the capitalized value of experimental
development. 10. Extraordinary depreciation may be claimed on the asse ts listed below in accordance with the Accounting Act,
if they are in service on the last day of the tax year: a) concessions or similar rights that can only be exercised to a limited extent or cannot be exercised at all due to
the amendment of the contract; b) capitalized value of experimental development, if the activities to be realized through the completion of the
experimental development are limited, terminated or unsuccessful;
c) such assets (excluding those in the course of construction) for which no ordinary depreciation is allowed
according to the Accounting Act or that do not depreciate;
d) intellectual property and tangible assets (including those in the course of construction) not referred to in
Paragraphs a)-c) that have been damaged owing to unavoidable external reasons. 10/a. If the taxpayer has opted – under Point 10 – not to claim the amount of extraordinary depreciation for the tax
year in his tax base, the amount of ex traordinary depreciation assessed for the tax year, and left unclaimed, may be
claimed subsequently during the following four tax years in equal installments.
11. The amount applied on the basis of Subsection (9) of Section 29/D shall be deemed as depreciation deducted
from the tax base. 12. Any depreciation allowance claimed during a liquidation proceeding shall be treated as reducing the pre-tax
profit, as well as any sums spent (released) in connection with the purchase or production of a tangible asset
according to Subsection (15) of Section 7 or Subsecti on (1) of Section 29/D from provisions set aside for
developments; depreciation of the tangible asset may proceed as of the first day of the tax year or the day on which it
is put into operation.
13. The value of goodwill recorded by the taxpayer according to Point 1. c) of Subsection (5) of Section 3 of Act
C of 2000 on Accounting, less the amount of ordinary depreciation claimed – if the taxpayer merges with another
company after the date it was recorded – shall be treated as depreciation to be de ducted from the pre-tax profit, if the
purchased company fails to revaluate its a ssets to market value during the merger.
14. Small and medium-sized enterprises so qualified on the last day of the tax year may claim – during the tax year
when commissioned – 100 per cent depreciation on the histori cal cost of machinery, equipment, accessories – not
including passenger cars – and tangible assets shown under vehicles, that have never been used previously, if these
tangible assets are used in any one of the regions or communities deemed most underprivileged pursuant to the
relevant legislation. One per cent of the historical cost of the tangible asset deducted from the pre-tax profit, 3 per
cent for vehicles, for the pur poses of the provisions governing State aid, if the investment serves the purpose of
primary agricultural production, it may be claimed as an aid provided according to Article 4 of Commission
Regulation (EC) No. 1857/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to State
aid to small and medium-sized enterprises active in the production of agricultural products, in all other cases it shall
be treated, at the taxpayer’s choice: a) as de minimis aid received for the tax year, or
b) as aid provided under the Commission Regulation on State aid to small and medium-sized enterprises.
Schedule No. 2 to Act LXXXI of 1996
List of Depreciation Rates
I. BUILDINGS
Type of
building
Depreciation
rate %

1. Long-life 2,0

structures

2. Medium-life
structures
3,0

3. Short-life
structures
6,0

Classification of buildings according to tech nical criteria within the categories listed:
Category
Rising (vertical) bearing
structures
Filling/dividing (non-
bearing) walls
Horizontal bearing
structures (middle structures
and roofs, and combined
bearing/partitioning roof
structures)

Structures of long
economic life
Concrete and reinforced
concrete, burnt brick, stone, slag
and steel structures
Brick, block, panel,
poured walls, sheet metal,
glass concrete and profile
glass
Prefabricated and
monolithic reinforced
concrete, filling elements
between steel supports, and
vaulted roofs

Structures of
intermediate economic
life
Light steel and other metal
structures, gas silicate structures,
bauxite concrete, tufa- and slag
block structures, sawed lumber
framing, cob or adobe walls on
insulated foundations
Asbestos, plastic and other
partitioning-walls
Beam (covered and dense
beam), ‘Mátra’ roof, light
steel roofs and combined
steel structures with light
filling elements

Structures of short
economic life
Industrial timber and plank
framing, slab wall structures,
temporary brick masonry walls
Wooden partitions,
plasterboard panels pressed
into frames
Industrial timber, adobe
and other simple sheet-
flooring

From among the three different criteria, the type of building shall be defined by the one of the shortest lifecycle.
The depreciation of building equipment and instruments may also be claimed independent of the building, using
the depreciation rates provided for machinery. The depreciation allowance for equipment and instruments incorporated into a building, and the conduits and
cables of such, shall be established independent of the building, by the depreciation rates provided for machines and
conduits.
II. STRUCTURES
Type of building
Depreciation rate (%)

Industrial structures
2.0

Agricultural structures
3.0

including: independent buttress system
15.0

Meliorations
10.0

Access and service roads, for taxpayers engaged in agricultural activities
5.0

Public railways and ancillary structures, including industrial rail sidings
4.0

Other rail structures (suburban railways, trams, underground rail tracks, etc.)
7.0

Hydrostructures (in water)
2.0

Bridges
4.0

Power lines, including telecommunications cables
8.0

Crude oil and natural gas pipelines, gas mains
6.0

Steam, hot water and thermal water pipes, natural gas transmission pipelines, thermal
wells
10.0

Tram and trolley-bus (power) lines on public roads
25.0

All other lines and conduits
3.0

Tunnels and underground structures (except mining structures)
1.0

Assets installed on land other than own (leased)
6.0

Type of building
Depreciation rate (%)

Waste disposal facilities
20.0

Structures used exclusively for motion picture and video production
15.0

All other structures
2.0

including: waste treatment and recovery installations
15.0

‘Waste disposal facility’ shall mean a building or structure installed for the storage and treatment of waste in
compliance with the Act on Waste Management. Depreciation for the parcel of land used for the waste disposal
facility shall be claimed under the same rate as for the waste disposal facility. ‘Waste recovery installation’ shall mean a building or structure, not including land, installed for recovery
operations in compliance with the Act on Waste Management. ‘Melioration’ shall mean a process to regulate water sources in unincorporated areas to promote the use of
cropland, gardens, orchards, vineyards, grassland and fo restry and arable land for agricultural purposes; soil-
amelioration with an effective range of at le ast six years and installations for earthwork.
III. PLANTATIONS
Categories
Depreciation rate (%)

Group 1: apple, pear, quince, medlar, che rry, sour cherry, plum, grape, viniculture,
almonds, hazelnuts
6,0

Group 2: peach, apricot, gooseberry, currant, hop, fruit orchard, willow plantation
10,0

Group 3: asparagus, raspberry, blackberry, horse radish
15,0

Group 4: walnut, chestnut
4,0

Group 5: other plants
5,0

The buttress system for plantations is not an asset on its own but an accessory, and shall be depreciated by the
same rate as the plantation to which it belongs. The land ar ea and the fences of plantations, however, are treated as
independent tangible assets.
IV. MACHINERY, EQUIPMENT, FU RNITURE, VEHICLES AND BROOD
STOCK

a) tangible assets subject to 33 per cent rate
1. Program controlled and numeric controlled machinery and equipment falling under heading 8456-8465, 8479
HS. 2. Controlling and general purpose computers and comput er accessories falling under headings 8471, 8530, 8537
HS. 3. Industrial robots falling under Chapters 84 and 85 HS.
4. Transmission, special industrial testing instruments and special gauging and testing equipment operating on
complex principles falling under headings 9012, 9014-9017, 9024-9032 HS. 5. Headings 8469, 8470, 8472, 9009 HS and subheading 8443 5100 00 HS.
6. Subheading 8419 11 00 00, 8541 40 90 00 HS.
7. Fluid-bed coal dust fueled equipment, as well as heat generation equipment fueled by combustion of saturated
agricultural and forestry by-products falling under headings 8402, 8403, 8416, 8417 HS. 8. Subheading 8417 80 10 00 HS, and waste disposal, treatment, neutralizing and recycling equipment falling
under heading 8514 HS. 9. Subheading 8421 21 HS.
10. Equipment for separation and filtering of pollutants falling under headings 8419, 8421 HS.
11. Subheadings 8421 31, 8421 39 HS.
12. Subheading 8419 20 00 00 HS, and medical, therapeutic and laboratory instruments falling under headings
9018-9022 HS. b) tangible assets subject to 20 per cent rate
Vehicles falling under heading 8701 HS, and headings 8702-8705, 8710, 8711 HS.
c) tangible assets subject to 14.5 per cent rate
All other tangible assets not lis ted in Paragraphs a) and b).
Schedule No. 3 to Act LXXXI of 1996
Regulations for Claiming Costs and Expenses
A)
Costs and Expenses Not Incurred in the Interest of Business Operations
For the purposes of Paragraph d) of Subsection (1) of Section 8, the following, in particular, shall not qualify as
costs or expenses incurred in the interest of business operations: 1.
2.
3.
4. the consideration (whether in full or in part) for a service in excess of 200,000 forints without value added tax,
if – by evidence of the prevailing circumstances (such as the taxpayer’s business activities, revenue, the type and
value of the service) – it is determined beyond reasonable doubt that use of the service contradicts the requirements
of reasonable management. The consideration for services provided by the same person under the same title in the
tax year shall be taken into account on the aggregate; 5. the book value of missing assets (adjusted book valu e of intangible assets and tangible assets), if it is
determined beyond reasonable doubt that the shortfall would not have occurred if properly cared for (particularly,
with regard to the physical attributes, value of the asset, and storage conditions) or if the taxpayer – in view of the
requirements of reasonable management – failed to act within his powers to prevent losses and/or shortages;

6. the book value of a tangible asset recorded by value when retired from service, if the fact of retirement and the
reason for it are not credibly supported by documents;
7. the health insurance contribution paid on the basis of an agreement concluded in accordance with the provisions
of the Act on Eligibility for Social Security Benefits and Private Pensions and the Funding for These Services;
8. the expenditures incurred in connection or associated in any way or form with the felony offenses, by definition
of the Criminal Code, of bribery, prof iteering with influence, bribery in international relations and profiteering with
influence in international relations; 9. the consideration paid to a controlled foreign company, unless the taxpayer is able to prove that it serves the
purposes of his business operations taking also into consideration the provisions set out in Point 13; 10. expenses claimed as shown under receivables that cannot be enforced in court or under barred claims.
11. the ratio between the company’s own funds and the subs cribed capital as prescribed in the Companies Act and
the value adjustments of ownership shares obtained through capital increase made to cover losses. 12. in kind benefits shown under other employee benefits and provided in the form of entertainment and gifts in
accordance with the Personal Income Tax Act.
13. the book value of any grant or support provided without obligation of repayment, non-repayable liquid assets
and assets provided without consideration during the tax year, debts assumed by the taxpayer without consideration
and deducted from the pre-tax profit for the tax year, the direct cost of services rendered without consideration
during the tax year, and the value added tax charged for these benefits and shown under expenses, if provided to a
foreign national or a nonresident entity whose head office is located abroad or the taxpayer does not have a statement
in his possession from the recipient stating that his pre-ta x profit for the tax year when the benefit was provided will
not be negative without the income this benefit represents, that is to be verified thereby following the completion of
his annual account.
B)
Costs and Expenses Incurred in the Interest of Business Operations
For the purposes of Paragraph d) of Subsection (1) of Section 8, the following, in particular, shall qualify as costs
or expenses incurred in the interest of business operations: 1. support granted by the taxpayer to private individuals in his employment or to private individuals previously in
his employment in retirement on their own right [Paragraph f) of Section 4 of the SPA], or to the widows and minor
dependents of said private individuals; 2. any discount, price reduction, refund, product or service provided by the taxpayer as an in-kind benefit for
business promotion (advertisement) purpo ses that is made available to general public in a non-discriminatory
fashion, furthermore, product samples provided for promotional purposes – an d regarded as in-kind benefit according
to the Personal Income Tax Act -, other than durable go ods and if under the minimum quantity that can be or is
marketed in commercial circulation; 3. sums shown under other employee benefits the taxpayer has provided to private individuals in his employment,
his executive officers, members who personally participate in operations, or private individuals previously in his
employment in retirement on their own right [Paragraph f) of Section 4 of the SPA], as well as to the close relatives
of said private individuals with the exception of in kind benefits provided in the form of entertainment and gifts in
accordance with the Personal Income Tax Act, and compulso ry payments to the various subsystems of the state
budget that are related to said benefits as required by law, in due consideration of the provisions of Points 1, 2, 8 and
12; 4. charged value added tax that is non-deductible in accordance with the Value Added Tax Act, provided it is
associated with costs and/or expenses that were incurred in the interest of business operations;
5. membership fees or similar charges paid to public bodies as well as the membership fees paid to non-
governmental organizations providing interest representation and other services, as stated in the bylaws in connection
with the taxpayer’s business operations; 6. the costs of electronically supplied communications serv ices (such as fixed-line telephone services and mobile
radio telephone services), the costs of company cars, including maintenance and operating costs and including the
compulsory payments made in connection with the use of company cars to any subsystem of the central budget as
prescribed by law;
7. any payment made by a taxpayer to a volunteer private individual and shown under other employee benefits, if
the taxpayer has employed the volunteer for the benefit of his gainful activity or business operation;

8. insurance premiums provided by the taxpayer on policies purchased for private individuals in his employment
whether by contract or engaged in voluntary activities, for its executive employees, for members who personally
participate in operations, or for vocational school students participating in practical training under apprenticeship
agreement as described by law; 9. sums paid to the trade union on the basis of the provisions prescribed by the Labor Code as unclaimed work
time allowance; 10. the amount shown under expenses on the basis of organizational and management services in the case of
companies leased on the basis of a privatization leasing contract;
11. the amount proportionate to the proprietary ratio recorded by co-owners as maintenance and other common
(operating) expenses related to the common property of condominium associations and the property of housing
cooperatives; furthermore, the expenses entailed by an y commitment of a housing cooperative before registration,
provided the underlying contract was subsequently approved by the general meeting; 12. the value of winnings provided in connection with lottery games and promotional contests of chance under the
Act on Gambling Operations, shown under expenses;
13. expenses claimed as appropriation from the fellowship funds of cooperative societies for the objectives set out
in Subsection (2) of Section 57 of Act X of 2006 on Cooperatives; 14. the costs of training provided by the payer (including the compulsory payments made in connection with such
training to any sub-system of the ce ntral budget as prescribed by law).
15. the book value of any grant or support provided without obligation of repayment, non-repayable liquid assets
and assets provided without consideration during the tax year, debts assumed by the taxpayer without consideration
and deducted from the pre-tax profit for the tax year, the direct cost of services rendered without consideration
during the tax year, and the value added tax charged for these benefits and shown under expenses, if the grant or
support was provided during the tax year without obligation of repayment under Point 36 or Point 38 of Section 4.
Schedule No. 4 to Act LXXXI of 1996
Schedule No. 5 to Act LXXXI of 1996
Organizations which are Exempt from Corporate Tax
1. the Magyar Nemzeti Bank;
2. economic operators created for the statutory employment of prisoners under the supervision of the minister in
charge of penal administration; 3. public-benefit organizations established exclusively for the sole purpose of the employment of prisoners, and
public-benefit or priority public-benefit nonprofit business associations carrying on their operations;
4. the Tartalék Gazdálkodási Közhasznú Társaság (R eserve Management Public-Benefit Organization), and
nonprofit business associations carrying on their operations; 5. the Közlekedési, Hírközlési és Vízügyi Tartalék gazdálkodási Közhasznú Társaság (Transportation,
Communications and Water Reserve Management Public-Benefit Organization), and nonprofit business associations
carrying on their operations; 6. the Magyar Nemzeti Vagyonkezel ő Zrt. (Hungarian National Asset Management Zrt.);
7. public service broadcasters as specified by law;
8. parties subject to liquidation proceeding s, as of the initial date of liquidation;
9. political parties;
10. the Magyar Távirati Iroda Részvénytársaság (Hungarian News Agency);
11. limited companies engaged exclusively in providing surety insurance services under the conditions laid down
in another act and in other legislation adopted under the authorization of such act; 12. legal persons and business association lacking the lega l status of a legal person taxed under the simplified
entrepreneurial taxation system during the tax year;
13. institutions of higher learning (including the institutions they have established) operating in the form of
budgetary agencies, and student hostels.
Schedule No. 6 to Act LXXXI of 1996

Preferential Activities Carried Out by Foundations, Public Foundations, Non-Governmental Organizations,
Public Bodies, Housing Cooperatives , Public-Benefit and Priority Public-Benefit Nonprofit Business
Associations, Social Cooperatives and Institutions of Higher Learning
A)
Preferential Activities Carried Out by Foundations, Public Foundations,
Social Organizations and Public Bodies
For the purposes of this Act, the following shall not be construed as business operations from among the
economic activities of foundations, public foundations, non-governmental organizations and public bodies
performed for profit on a regular ba sis and other similar gainful activities, as defined in Subsection (1) of
Section 1:
1. the public benefit activities or, if not qualifying as a public-benefit organization or priority public-benefit
organization, the activity entailed by the objective spec ifically indicated in the charter document or bylaws,
including in both cases any support, allowance or membership fee recei ved in connection with such activity;
2. the consideration of or revenues from the sale of intangible assets, tangible assets or inventories serving
solely the public benefit activities or, if not qualifyi ng as a public-benefit organization or priority public-
benefit organization, the activity entailed by th e purpose of the foundation, public foundation, non-
governmental organization or public bodies;
3. that portion of the interest received from a credit institution or the issuer of a security, on placing or
investing available liquid assets in deposits or securities , and of the yield of securities issued by the State,
which is represented by the revenues from the public benefi t activities or, if not qualifying as a public-benefit
organization or priority public-benefit organization, from the activity entailed by the purpose of the
foundation, public foundation, social organization or public bodies, in the total revenues, whereby revenues
shall be recorded without such interest or yield in either cases.
B)
Preferential Activities Carried Out by Housing Cooperatives
For the purposes of this Act, the following shall not qualify as business operations from among the economic
activities of housing cooperatives performed for profit on a regular basis and other similar gainful activities, as
defined in Subsection (1) of Section 1: 1. housing cooperative activities;
2. that portion of the interest receive d from a credit institution or the issuer of a security on placing or investing
available liquid assets in deposits or securities, and of the yield of securities issued by the State, which is represented
by the revenues from housing cooperative activities in the total revenues, whereby revenues shall be recorded
without such interest or yield in either case.
C)
D)
Preferential Activities Carried O ut by Institutions of Higher Learning
Registered as Public-Benefit Organizations or Priority Public-Benefit
Organizations
For the purposes of this Act, the following shall not be construed as business operations from among the
economic activities of institutions of higher learning registered as public-benefit organizations or priority
public-benefit organizations performed for profit on a regular basis and other similar gainful activities, as
defined in Subsection (1) of Section 1:
1. the public benefit activities, including any support or allowance received in connection with such activity;

2. the consideration of or revenues from the sale of intangible assets, tangible assets or inventories serving
solely the public benefit activities;
3. that portion of the interest received from a credit institution or the issuer of a security, on placing or
investing available liquid assets in deposits or securities , and of the yield of securities issued by the State,
which is represented in the total revenues by the reven ues from public benefit activities, where revenues shall
be taken into consideration without su ch interest or yield in either cases.
E)
Preferential Activities Carried Out by Public-Benefit and Priority Public-
Benefit Nonprofit Business Associations and Social Cooperatives
For the purposes of this Act, the following shall not be construed as business operations from among the
economic activities of public-benefit or priority public-benefit nonprofit business associations and social
cooperatives performed for profit on a regular basis and other similar gainful activities, as defined in
Subsection (1) of Section 1:
1. that part of the revenues from the public benefit activities carried out on the basis of a contract
concluded with an agency, local authorities, or an institution having a chapter defined in the annual budget
act, or an institution with an independent budget wi thin that chapter, responsible for satisfying common
social needs, for the purpose of renderi ng continuous services, and containing also the fees chargeable for such
services, as well as the conditions on any changes of such fees;
2. the grant or support received in connection with the activity referred to in Point 1;
3. that portion of the interest received from a credit institution or the issuer of a security on placing or
investing available liquid assets in deposits or securities , and of the yield of securities issued by the State,
which is represented by the revenues from public servi ce activities in the total revenues, whereby revenues
shall be recorded without such interest or yield in either case.
F)
Preferential Activities Carried Out by European Groupings of Territorial Cooperation

For the purposes of this Act, the following shall not be construed as business operations from among the economic
activities of European groupings of territorial cooperation performed for profit on a regular basis and other similar
gainful activities, as defined in Subsection (1) of Section 1: 1. the activity defined in the articles of association, including any grant or support received in connection with
such activity; 2. the consideration of or revenues from the sale of intang ible assets, tangible assets or inventories serving solely
the activity entailed by the purpose of the European grouping of territorial cooperation;
3. that portion of the interest receive d from a credit institution or the issuer of a security, on placing or investing
available liquid assets in deposits or securities, and of the yield of securities issued by the State, which is represented
by the revenues from the designated activity in the total revenues, where revenues shall be recorded without such
interest or yield.