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Company Registration in Hungary


At the beginning of business activity in Hungary, the foreign investors prefer to create business in most cases in the form of a limited liability company. The enterprises of this type can exist in the following organizational and legal forms: «Korlátolt Felelősségű Társaság» - Kft. (Limited Liability Company), "Részvénytársaság" - Rt. (Joint-stock company) and Societas Europaea (European company).

Registration procedure for a limited liability company (Korlátolt Felelősségű Társaság - Kft.)
The registration of a limited liability company consists of several stages:
1. Hiring a notary and preparation of the documents. The feature of the Hungarian legislation is that the preparation of all documents and their submission to the Registration Chamber can be carried out only by an authorized lawyer. For the preparation of the necessary documents by the lawyer, the client must provide: • variants of company name; • anticipated activities; • documents of founders, confirming their identity and place of residence (for legal entities - registration documents and power of attorney of the representative); • data on the company participants, directors, the amount of authorized capital, the extent of responsibility of all persons of the company. The notary prepares a package of the documents, including an application, samples of signatures, an agreement on the provision of a legal address, the Articles of Association, which must be signed by all founders in the presence of a notary. If the Articles of Association is signed in the presence of a notary but not in the territory of Hungary, it shall be apostilled. 2. Opening of a bank account and provision of the authorized capital.To open a bank account, a personal presence of the director of the company is mandatory. The Hungarian legislation requires at least half of the authorized capital to be paid before the company is registered. 3. Submission of documents to the Register by the notary and conducting registration actions. There are two ways of submission of the documents to the Register by the notary:
• Simplified procedure of electronic registration. It is available in case of using a standard constituent document. It takes 1 day. • Standard procedure. It takes up to 15 days. For the registration of a legal entity, the consent of the tax and customs authorities is necessary. They decide on the registration of the company and issuance of a tax certificate. The registration can be refused in that case if there are questions to the founder or the director on the debt for paying taxes. Then the registration process is suspended and a separate investigation is conducted. Along with the registration in the Register, the company is registered in the tax service as a payer of corporate income tax and VAT, as well as in the statistics body. After registration in the Register, the relevant information must be published in the official printed publication or on the corporate website of the company. 4. Registration of the company in the Social Insurance Administration, the National Chamber of Commerce, as well as in the local government for tax purposes. Upon the completion of the registration process, the client receives: • Registration certificate; • an extract from the Register of the companies; • Articles of Association; • set of basic documents.
Requirements to the authorized capital:
• The minimum authorized capital is 3 million forints (about EUR 10,000). • To register a company, each participant must contribute at least half of its share. The second half must be provided within a year from the date of registration. • If the company has one founder, it is obliged to provide only 1000 forints before the registration. • The rights of participants, including their ownership of the assets of the enterprise, are represented by quotas (shares) in the company. The nominal value of each equity participation
is not less than HUF 100,000 and should be divisible by HUF 10,000. • Quotas can be ordinary (providing the same rights of the members) or preferential (if it is stipulated by the Articles of Association), that is, they can, for example, provide their holders with preferences in dividends or in voting. • With respect to the quotas, no securities can be issued.
Requirements for director:
• A company must have at least one director. • The director can be only a physical person. • There are no requirements for the residence of the directors. • The directors are jointly responsible to the participants for their acts and omissions. In some cases, they may also be
liable to the creditors of the company if, in the event of a liquidation procedure, there are no sufficient assets to pay off the debt. • The information about the directors is filed in the open Register and is public.
Beneficiary
• Beneficiary is an actual owner of a company that can manage it directly or through nominal service (through a nominee director or shareholder).
• The information about the beneficiary is stored in the office of professional intermediaries, but it is not submitted to the open Register and is not subject to disclosure.
Requirements for participants:
• The participants of the company can be both physical and legal persons. • The participants of the company can be both residents and non-residents of Hungary. • The minimum number of participants is 1, the maximum number is unlimited. • The general meeting of participants must be held at least once a year.
• The Supervisory Board is created only at the enterprises with more than 200 employees. • The information on the participants and the share of ownership of each of them is submitted to the open state Register and is publicly available.
Office of the company
• The availability of a registered office is mandatory for every company in Hungary. • The registers of the participants of the company, minutes of meetings, accounts and other documents should be kept at the official address of the office.
• The information about the legal address is recorded when the company is registered in the Register.
Reporting, audit
• Companies must maintain accounting records. The initial documentation is compiled in Hungarian. • Companies are required to submit financial and tax reporting to the competent authorities annually, as well as an annual report. • Financial reporting is submitted to the Ministry of State Administration and Justice and it is on its website in the public domain;
• Audit of financial statements is mandatory if the turnover of the company for the past two years exceeds HUF 100,000,000, and the number of employees exceeds 50 people. • An annual report is also submitted to the Ministry. The companies which assets do not exceed 500 million forints, and the number of employees - 50 people, can prepare an annual report in a simplified form. • A tax return must be submitted annually until March 31.
«Részvénytársaság» – Rt. (Joint-stock company) - an enterprise founded with a share capital (subscribed capital) consisting of a predetermined number of shares and their nominal value, which limits the liability of the shareholders of the company for its debts. Joint stock companies may be public – («Nyilvánosan muködo Részvénytársaság» – Nyrt.), which are quoted on the stock exchange, or private («Zártkören Muuködo Részvénytársaság» – Zrt.), whose shares can not be sold openly.
Registration procedure of a joint-stock company ("Részvénytársaság" - Rt.)
The procedure for opening a joint-stock company also includes several stages:
1. Hiring a notary and preparation of the documents. The feature of the Hungarian legislation is that the preparation of all documents and their submission to the Registration Chamber can be carried out only by an authorized lawyer. For the preparation of the necessary documents by the lawyer, the client must provide: • variants of company name; • anticipated activities; • documents of founders, confirming their identity and place of residence (for legal entities - registration documents and power of attorney of the representative); • data on the company participants, directors, the amount of authorized capital, the extent of responsibility of all persons of the company. The notary prepares a package of the documents, including an application, samples of signatures, an agreement on the provision of a legal address, the Articles of Association, which must be signed by all founders in the presence of a notary. If the Articles of Association is signed in the presence of a notary but not in the territory of Hungary, it shall be apostilled. 2. Opening of a bank account and provision of the authorized capital. To open a bank account, a personal presence of the director of the company is mandatory. The Hungarian legislation requires at least half of the authorized capital to be paid before the company is registered. 3. Submission of the documents to the Register by the notary and conducting registration actions. Submission of the documents to the Register by the notary and conducting registration actions. The notary can submit the documents to the register in two ways: • Simplified procedure of electronic registration. It is available in case of using a standard constituent document and only for Zrt. It takes 1 day. • Standard procedure for submitting documents to the Register. It takes up to 15 days. For the registration of a legal entity, the consent of the tax and customs authorities is necessary. They decide on the registration of the company and issuance of a tax certificate. The registration can be refused in that case if there are questions to the founder or the director on the debt for paying taxes. Then the registration process is suspended and a separate investigation is conducted.
Along with the registration in the Register, the company is registered in the tax service as a payer of corporate income tax and VAT, as well as in the statistics body. After registration in the Register, the relevant information must be published in the official printed publication or on the corporate website of the company. 4. Registration of the company in the Social Insurance Administration, the National Chamber of Commerce, as well as in the local government for tax purposes. 5. An already registered joint-stock company may become public only after the issue of a share prospectus, its approval by the regulator and the public offering of shares on the stock exchange. Listing of shares on the Budapest Stock Exchange is of two "types": • "Simple" listing – does not require capital increase (that is, the issue of new shares) and the public offering of existing shares; • "Traditional public offer" is a reception on the stock exchange together with the offer of shares for the public, that is, either the issue of new shares, or the sale of shares by the owners, or their combination. The admission of securities to trading on the regulated market follows after the preparation of the securities prospectus. The prospectus should contain all the related data on the economic, market, financial and legal position of the company, providing investors with the widest possible range of information. The prospectus prepared for listing on the stock exchange must be provided to the Hungarian National Bank for prior approval. Upon the completion of the registration process, the client receives: • Registration certificate; an extract from the Register of companies; • Articles of Association; • set of basic documents; • Certificate of the VAT payer.
Requirements to the share capital and shares:
1) Minimal amount of share capital: • for Zrt. - 5 million forints (about EUR 17,000); • for Nyrt. - 20 million forints (about EUR 67,000); maximum – is not fixed. 2) At the time of registration of the company, at least 25% of the share capital must be paid, the rest amount is paid within a year.
• Shares may be divided into classes and series, they may provide for special property rights. • Bearer shares are prohibited. • Nyrt. can issue shares only in a non-documentary form. When using such shares, data on them are reflected on the securities account.
Requirements for director:
• The company must have a Board of Directors consisting of at least 3 directors or one general director. • The director can be only a physical person. • There are no requirements for the residence of the directors. However, to maintain the residence of a company it is better when it is a resident of Hungary (the main criterion is the location of management and control). • The information on the director when registering the company or any change of the director is filed in
the open state Register and is public. • Directors are jointly responsible to the shareholders for their acts and omissions. In some cases, they may also be liable to the creditors of the company if, in the event of a liquidation procedure, there are no sufficient assets to meet the demands of the creditors.
Beneficiary
• Beneficiary is an actual owner of a company that can manage it directly or through nominal service (through a nominee director or shareholder).
• The information about the beneficiary is stored in the office of professional intermediaries, but it is not submitted to the open Register and is not subject to disclosure.
Requirements for shareholders:
• The shareholders of the company can be both physical and legal persons. • The shareholders of the company can be both residents and non-residents of Hungary.
• The information on the shareholders is contained in the Register of shareholders.
Office of the company
• The availability of a registered office is mandatory for every company in Hungary. • The registers of the participants of the company, minutes of meetings, accounts and other documents should be kept at the official address of the office.
• The information about the legal address is recorded when the company is registered in the Register.
Reporting, audit
• Companies must maintain accounting records. The initial documentation is compiled in Hungarian. • Companies are required to submit financial and tax reporting to the competent authorities annually, as well as an annual report. • Financial reporting is submitted to the Ministry of State Administration and Justice and it is on its website in the public domain;
• Audit of financial statements is mandatory if the turnover of the company for the past two years exceeds HUF 100,000,000, and the number of employees exceeds 50 people. • An annual report is also submitted to the Ministry. The companies which assets do not exceed 500 million forints, and the number of employees - 50 people, can prepare an annual report in a simplified form. • A tax return must be submitted annually until March 31.
Societas Europaea (European company), the title should contain the ending «SE». This legal form is applicable to companies operating or intending to operate in several Member States of the European Union. Read more in our article.
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Taxation in Hungary


Currently, Hungary is getting more and more popularity in the implementation of tax planning. It is not surprising as this jurisdiction combines the European reputation, not spoilt with “black lists” and flexible corporate taxation comparable to the Cyprus one. The entrepreneurs who have started doing business in this country get the ideal opportunities for building schemes with dividends, loans and royalties. In addition to the standard tax rates, reduced VAT rates are also applied in Hungary for certain categories of goods and services and a simplified entrepreneurial tax.

Corporate Income Tax
The tax rate on the company's profit has been reduced since January 1, 2017, and it is 9%.
In Hungary, the companies are required to pay corporate income tax on income derived from business activities undertaken for profit:
• income of resident companies received worldwide;
• income from Hungarian sources of non-resident companies that do not have a permanent representative offices in Hungary;
• income received from the transfer or alienation of the equity participation of the company owning the real estate (the company is considered to own the real estate if the value of the real estate located in Hungary is more than 75% of the book value of assets on the reporting date specified in the taxpayer's financial reporting independently or along with its affiliated persons in Hungary or branches).
If certain conditions are observed, 50% of the revenue of recognized royalties and the direct costs for the research and development are deducted from the tax base. Even related parties may attribute research and development to the direct costs, reducing the tax base of other companies.
The profit recognized by the dividends received in the target year reduces the tax base provided that it was not received from a controlled foreign company.
Withholding tax
In Hungary, there is no withholding tax for the dividends, interest or royalties, if the payment is made to address of the company. If payment is made to the individual, taxes are levied in accordance with the provisions of the applicable double taxation treaties.
Dividends
In Hungary, both dividends received by the company and dividends paid to non-residents are not taxed. The Hungarian companies can reduce the income received in the form of dividends during the target year, except when they are received from a controlled foreign company.
Simplified Entrepreneurial Tax (EVA)
EVA provides an opportunity for the companies which annual sales do not exceed 30 million HUF (provided that the company had revenue for the previous two years), to reduce both administrative and tax burdens. EVA replaces the following types of taxes: VAT, personal income tax of the entrepreneurs, tax on the entrepreneur's dividend base, corporate profit tax and personal income tax on dividends. The EVA rate is 37%. If the total revenue and all items, increasing the income, exceed 30 million forints, the EVA rate will be 50% of the portion of the tax base exceeding this amount.
VAT
The standard rate is 27%
A reduced rate of 18% is applied to the goods/ services of the following categories:
• milk and dairy products (except for mother's milk and products taxed at a rate of 5%); • products made using corn, flour, starch or milk; • goods for commercial placement;
• irregular outdoor activities; • internet services; • food in restaurants.
A reduced rate of 5% is applied to such goods/ services:
• medical services; • medical equipment; • books; • e-books; • magazines; • pigs, cattle, sheep and goats; • bird, bird eggs;
• milk (except for mother's milk, as well as milk, treated with ultra-high temperature or with an extended shelf life); • district heating services; • services of instrumental live music of artists in closed premises.
Financial and investment services are not subject to VAT.
Municipal taxes
The municipalities may levy municipal and local taxes within their jurisdiction. The local taxes include local corporate tax, construction tax, land tax, utility tax of individuals and tourist tax.
Local business tax is the most common. Any permanent or temporary entrepreneurial activity carried out in the jurisdiction of that municipality is taxed with it.
The maximum tax rate is 2% of the tax base. The municipalities can reduce the tax rate or even not levy a tax on local businesses. In the case of temporary business activities, the tax rate is 5,000 HUF for a calendar day.
The tax base is net income from sales, minus the cost of the sold goods and services, payment of the subcontractors, direct costs for research and experimental development, as well as material costs.
The construction (real estate) tax is applied to the owners of both residential and non-residential premises, regardless of their intended destination and use. Tax rates: maximum 1,852.1 forints / m², or 3.6% from the adjusted market value.
Land tax is levied on the registered land owners as of January 1. The maximum tax rate is 336.7 HUF / m² or 3% from the adjusted market value.
Employer contributions
The compulsory payments by the employer constitute a social contribution, a professional contribution and contribution for rehabilitation. The basis for the payment of a social contribution is the basic salary specified in the employment contract, or, if the service contract is signed, the amount of compensation determined by it. If the work is carried out in accordance with the employment contract governed by a foreign law, the tax base is the amount of the monthly remuneration. The tax rate is 22%. Tax incentives are provided to promote employment of the workers in the disadvantaged conditions or create jobs in poor neighborhoods, as well as to employ the workers who create high added value. In addition, the additional tax benefits are provided for the unskilled workers and the workers in the disadvantaged status, as well as persons who are eligible for social benefits for the upbringing of children and researchers. The tax base of the professional contribution is the same as that of the social one. The rate is 1.5% of the tax base.
The professional contribution obligation can be carried out by organizing practical training or by paying the contribution amount. In the first case, the salary before deductions can be reduced in accordance with the basic norms established in the state budget (in 2017, it is 453 thousand forints / person per year). The employer is obliged to pay rehabilitation fees to facilitate the employment of unemployed workers in a difficult situation. Such an obligation for the employer emerges when the number of the employees in the company exceeds 25 people, and the number of employed persons in the enterprise in disadvantaged situations, does not reach 5 percent of the total number of employees. The amount of the rehabilitation contribution is nine times more than the minimum basic wage paid to the full-time employees on the first day of the current year (people per year). This amount is 1 147 500 HUF / persons per year and it should be multiplied by the number of staff missing up to five percent of the mandatory level of employment, determined from the average membership of the organization, rounded to the first decimal sign, to receive the annual contribution to the rehabilitation.
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Business in Hungary


The company must have a Hungarian bank account for the payment of taxes, as well as accounting, auditing and other expenses arising in the territory of Hungary. The company can open accounts without any restrictions in foreign banks.

The minimum amount that will be required to "open up" is about € 3 thousand (900 thousand HUF), of which 2 thousand (500 thousand HUF) is the authorized capital. This amount can be withdrawn after the registration process is completed. Another € 800 (240 thousand HUF) will be required for clearance. The authorized capital can be paid in two installments: the half - at the moment of registration, and the second half - in one year.

Previously, it was necessary for the registration process to be present personally. This took 3-4 days. However, since 2007, according to the Hungarian law, the electronic registration of the companies is allowed.

If the founder is one person, then the auditor is appointed, if two, then the obligatory cooperation with the auditor is not required. An individual who intends to found business in Hungary presents a passport, company name and the required amount.

Legal System of Hungary

Hungary is an independent democratic constitutional state where the Romano-German legal system operates. The basic law, which has the highest power in Hungary, is the Constitutional Law. In addition to it, there are acts of parliament, government and ministerial decrees and decisions of local authorities. Since May 1, 2004, Hungary has become a member of the European Union, accordingly, the European legislation also operates on its territory. The executive, legislative and judicial branches of the government in the state are separated from each other. The highest court in the system of Hungarian courts is the Curia. In most cases, the jurisdiction of the first instance is on the local courts, which ensures the resolution of most cases at the local level. In parallel with the local courts, there are courts on administrative and labor disputes, specializing in reviewing decisions of the public authorities and labor disputes. The appeals against the decisions of the local courts can be filed in the higher courts (regional and provincial), acting as appellate courts. The main function of the Curia is to ensure the uniform application of the law and consideration of the applications on the review of final judgments. The legislative regulation of the economic entities is in the Part 3 (Business persons) of Book 3 (Legal Entities) of the Civil Code of Hungary.

Companies in Hungary

At the beginning of business activity in Hungary, the foreign investors prefer to create business in most cases in the form of a limited liability company. The enterprises of this type can exist in the following organizational and legal forms:

«Korlátolt Felelősségű Társaság» - Kft. (Limited Liability Company)
"Részvénytársaság" - Rt. (Joint-stock company)
Societas Europaea (European company)
«Korlátolt Felelősségű Társaság» - Kft. (Limited Liability Company)

Is an enterprise established with an initial (subscription) capital consisting of the capital contributions of the participants of a certain size which limit the liability of the participants for the company's debts.
"Részvénytársaság" - Rt. (Joint-stock company)

Is an enterprise established with a share (subscription) capital consisting of a pre-determined number of shares and their nominal value which limit the liability of the company's participants (shareholders) for its debts. The joint-stock companies may be public ("Nyilvánosan muködo Részvénytársaság" - Nyrt.), which are rated on the stock exchange, or private ("Zártkören Muuködo Részvénytársaság" - Zrt.), which shares cannot be sold publicly.
Societas Europaea (European company)

The name should contain the ending "SE". This legal form is applied to the companies that operate or intend to operate in several Member States of the European Union. Read more in our статье.
Rules of TP in Hungary
The transfer pricing rules are applied to the transactions between the related parties defined in the Hungarian Corporate Profit Tax Law. The company will be considered a related party for the purposes of income tax if it meets at least one of the following criteria:
• directly or indirectly owns more than 50% of the voting rights in another company; • owns more than 50% of the voting rights in the company according to any agreement with its another member;
• it has the right to appoint / discharge most of the officers or members of the supervisory board of another company; • even if the ownership rights (voting) of one entity in another enterprise do not exceed 50%, but the corresponding objects have the same management.
In addition, the Hungarian head office and foreign representations / branches, as well as Hungarian offices / branches and the foreign head office are qualified as related parties. Accordingly, the transfer pricing rules are also applied to such enterprises. The CPT Law determines that if the price used by the related parties by their agreement is lower or higher than the remuneration used by the independent parties in the comparative terms, the enterprises are required to apply transfer pricing adjustments.
The profit before taxation should be changed by adjusting the transfer pricing in two cases:
• If the pre-tax profit is higher due to an arrangement between the related parties, the adjustment of the transfer pricing should be made as reduction of the tax base.
• If the pre-tax profit is lower due to an arrangement between the related parties, the tax base should be increased by adjusting the transfer pricing.
The CFC rules (CONTROLLED FOREIGN COMPANIES) in Hungary
A foreign enterprise can be qualified as a controlled foreign company if it is not qualified as a resident taxpayer for corporate income tax purposes and it is not a foreign representative office.
In accordance with the EU rules, a foreign enterprise can become a controlled foreign company if:
• the taxpayer owns directly or indirectly more than 50% of the voting shares, more than 50% of the authorized capital or it is entitled to a share of profits after payment of taxes of more than 50%;
• the tax corresponding to the corporate income tax that is actually paid abroad for the tax year is less than half of the income tax rate that is applied to the parent company (that is, for the Hungarian parent company, it is less than 4.5%).
A foreign enterprise or a foreign permanent representation is not qualified as a controlled foreign company unless there is no doubt that it has the appropriate personnel, equipment, assets and premises that enable it to carry out significant business activities.
A taxpayer, of a Hungarian parent company, may need to increase the tax base in relation to the CFC rules. A part of the CFC income (tax base) is added to the tax base of the taxpayer, which is entered into a certain line: interest, royalties, participation in holdings, write-offs, financial leasing, banking and insurance activities. However, the above rule is applied only if the income from the above-mentioned incomes, on the one hand, reaches one-third of the total income (tax base) of the controlled foreign company, and on the other hand, if the controlled foreign company works in the sphere of financial leasing, banking, insurance or other financial activities and one third of its total income is exercised on the transactions with the taxpayer or related parties with them.
The taxpayer must prove that the enterprise is not qualified as a controlled foreign company.
The currency control in Hungary
Is absent
International agreements of Hungary in tax sphere
Hungary has signed agreements to avoid Double Taxation with more than 70 states. Among them:
Australia Austria Azerbaijan Albania Armenia Bahrain Belarus
Belgium Bulgaria Bosnia and Herzegovina Brazil United Kingdom Vietnam Germany
Hong Kong Greece Georgia Denmark Egypt Israel India
Indonesia Ireland Iceland Spain Italy Kazakhstan Canada
Qatar Cyprus China Kosovo Korea Kuwait Latvia
Lithuania Liechtenstein Luxembourg Macedonia Malaysia Malta Morocco
Mexico Moldova Mongolia Netherlands Norway United Arab Emirates Pakistan
Poland Portugal Romania Russia San Marino Saudi Arabia Serbia
Singapore Slovakia Slovenia USA Thailand Tunisia Turkey
Uzbekistan Ukraine Uruguay Philippines France Croatia Montenegro
Czech Republic Sweden Switzerland Estonia South Africa Japan
In addition to themultilateral agreement on the exchange of financial information, which about a hundred countries have joined at the moment, Hungary has also concluded the bilateral agreements on the exchange of tax information with such countries:
Guernsey
Jersey

Hungary

Mihaly Varga, Hungary's Minister of National Economy, announced about decision of government to reduce the corporate tax rate lower than 10 percent next year.

On November 18, behind the scenes of the Regional Digital Conference in Budapest, he made the announcement during which he unveiled the plan of the government to impose a single rate for nine percent of the corporate tax.

Now, the headline shows, that the rate of Hungary of the corporate tax constitutes 19 percent, and there is lower level of the income tax of 10 percent on the first 500 million Hungarian forints (1.7 million US dollars) of the income.

Dramatic movement would give Hungary one of the lowest corporate tax rates in the world and one of the lowest in the European Union "onshore" jurisdictions.

Varga said that this measure will save companies about 145 billion HUF (500 million US dollars) a year tax. The Government expects to compensate the shortfall through controlled growth to increase tax revenues.

The government plans to introduce a new tax rate of 1 January 2017.

Author: Olena Kutova

senior lawyer of the Finance Business Service company

Corporation tax 2016

Austria - Rate is 25%. Minimum corporate income tax of EUR 1,750 for limited liability company and EUR 3,500 for joint stock company.

Belgium - Corporate tax rate is 33%. Surcharge of 3% on income tax due makes effective tax rate 33,99%. Reduced rates may be available for companies whose taxable income does not exceed EUR 322,500.

Germany - Tax rate is 15%. Solidarity surcharge of 5,5% also levied on corporate income tax. Municipal trade tax imposed at rates between 14% and 17%, with rates determined by municipalities. Combined rate approximately 30% to 33%.

Hungary - 10% rate applies to tax base up to HUF million, 19% rate applies to tax base exceeding this amount.

Denmark - Rate reduced from 23,5% to 22% on 1 January 2016.

Macao - Rate is 0% on assessable profit up to MOP 600,000; 12% rate applies to assessable profit over that amount.

Monaco - Rate is 33,33%

Netherlands - Rate is 20% on taxable profits up to EUR 200,000 and 25% on taxable profits exceeding that amount.

Slovakia - Corporate tax rate is 22%.

Luxembourg - 21% rate applies to companies whose taxable income exceeds EUR 15,000; otherwise, rate is 20%. Surtax of 7% to unemployment fund and municipal business tax also apply.

Singapore - 75% of first SGD 10,000 of chargeable income and 50% of next SGD 290,000 of chargeable income exempt.

United States - Federal corporate income tax applies to bands of taxable income at rates between 15% and 35%. Branch profits tax imposes additional 30% tax on foreign corporations engaged in US trade or business. Alternative minimum tax also imposed. Separate taxes levied at state and municipal levels.

Turkey - Rate is 20%.

Switzerland - Statutory federal rate is 8,5%, applicable on after-tax profits, resulting in effective tax rate of 7,8%. Additional cantonal/communal income tax also levied, depending on canton. Taking into account both federal and cantonal/communal income tax, combined effective income tax, combined effective income tax rate typically between 12% and 24% for companies’ subject to ordinary taxation, depending on place of residence.

Japan - Standard rate - 23,9% applies to ordinary corporations with share capital exceeding JPY 100 million. Companies also pay local inhabitants tax, which varies depending on location and size of company.

Author: Olena Kutova

senior lawyer of the Finance Business Service company