Alpha News
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Economic news from Hungary
( 18 / December / 2008 )
The recent amendment to the Decree on the Development Tax Incentive in Hungary will affect some companies very positively.
Under the previous regulations, companies could lose the total amount of a development tax incentive if any tax authority or the customs office started enforcement proceedings against them during the obligatory operational period of the investment, due to tax debt, and no special payment conditions were authorized. In practice, this meant that if the enforcement proceedings (e.g. direct collection of debt from the debtor's bank account) was started for a tax debt of small value, and successfully completed, the total amount of the development tax incentive was at risk.
Under the new regulation, enforcement proceedings started by the tax authority do not affect the utilization of the development tax incentive if the enforcement has been successfully carried out.
The new rule came into force on 26 November 2008, but another positive aspect is that it can also be applied retroactively for the tax liabilities of 2008. Therefore companies will not be in a disadvantageous situation from 2008 onwards if the above conditions are met.
Other support for SMEs in Hungary
The government has launched three lending programmes for well functioning companies that have trouble getting bank loans, Minister of National Development and Economy Gordon Bajnai announced.
The programmes, which started on December 1, are part of the government's recently announced HUF 1,400bn economic stimulus package.
A Micro-loan Programme will allow SMEs to borrow up to HUF 6m for working capital and up to HUF 10m for investments. The second programme called the New Hungary SME Loan Programme, brings HUF 50bn in funding from the Hungarian Development and EU sources; these are available to SMEs through commercial banks. Under this programme, companies may take out loans of HUF 10m to 100m with runs of ten years plus a two-year grace period. The third programme will provide companies with guarantees up to HUF 100m.
ITD Hungary