As part of the usual year-end tax law amendments, but approved in a separate procedure, the corporate tax and personal income tax rules relating to controlled foreign corporations have changed with effect from 1 January 2017. This summary covers the most important changes. About the rules in general The Personal Income Tax Act and the Corporate Tax Act contain special rules for Hungarian taxable persons who are in an ownership relationship with what are officially defined as “controlled foreign corporations” (CFCs), but commonly referred to simply as “offshore companies”. The gist of the regulations is that the so-called capital income (dividend, capital gains, earnings withdrawn from the business) received from such foreign companies by Hungarian-domiciled private individuals and companies is liable for taxation at a higher rate than normal.
Rules relating to controlled foreign corporations set to change
By Jalsovszky of Jalsovszky Law Firm on February 15th, 2017
Posted in Europe | Legal Updates