Hungary to lower corporate tax rate to 9 pc from next year – UPDATE

Budapest, November 17 (MTI) – Hungary’s corporate tax rate will be lowered to a flat 9 percent next year, Prime Minister Viktor Orbán told a conference on Thursday.

The rate will apply to big companies as well as SMEs, Orbán said.

At present, the corporate tax rate is 10 percent on a tax base up to 500 million forints (EUR 1.6m) and 19 percent over that.

The government took a decision on the corporate tax rate at a meeting on Wednesday, based on a proposal by the economy minister and decisions taken earlier on payroll taxes, the prime minister said.

Orbán said he had asked Economy Minister Mihály Varga to “do everything possible” to raise the minimum wage to a level that businesses can still bear.

Speaking at the Regional Digital Conference in Budapest, Orbán said he had asked the European Commission to allow member states with the necessary fiscal strength to lower VAT rates on digital services if it serves their industrial policies.

Orbán said he would ask European Commissioner for Digital Economy and Society Gunther Oettinger to support the inclusion of digital services among “basic needs”.

He noted that Brussels does not support Hungary’s plan to reduce the VAT rate on internet services from 27 percent to 18 percent next year and to 5 percent from 2018.

The prime minister said digitalisation should serve the “common good” while its harmful effects should be reduced. This means that everyone should be able to profit from the opportunities presented by digitalisation, Orbán said. As regards the dangers of the internet, he noted that shielding children from harmful content was a key part of Hungary’s digital strategy. Orbán highlighted cybersecurity as another important area and stressed the need to minimise national security threats stemming from digitalisation.