- identify and implement changes needed in the Hungarian tax legislation with the aim to make it more competitive
- assist members in their advocacy efforts
- respond to members’ common upcoming requests with direct dialogue with decision- makers
- provide members with the opportunity to keep up to date with tax changes and key developments
- continuously update the AmCham Board about the developments in the tax law changes and discuss with the Board on how to comment these changes.
As a follow-up to the first AmCham-HIPA-NHIT Business Meets Government Summit, held on October 27, 2015, the Tax Committee in cooperation with the Investment PTF formulated their recommendations on how to attract more investments into Hungary how to help increase the country’s competitiveness by creating a competitive, investment-friendly business and tax environment. Recommendations were incorporated into the 19-point recommendation package titled “For a more competitive Hungary” that was published and sent to decision-makers in February 2016.
OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS) will fundamentally change the competitiveness strategies countries follow. Profits will be taxed at the place where business activities will be performed.
The Tax Committee has been advocating for a long time that CIT should be gradually decreased in Hungary to flat 10% to improve our investment climate and thus our regional and global competitiveness. The Committee is very proud to report to members that due to structured and constructive dialogue with the government the corporate income tax will be lowered to 9% from 2017.
AmCham also advocated for the further reduction of bureaucracy and over-regulation in general as it improves Hungary’s international competitiveness. Hungarian regulations are often stricter than the EU standards or the EU requirements. Over-regulation decreases the competitiveness of Hungary against other Central-Eastern European or European countries. It is important to comply but over-regulating is an additional burden to all stakeholders (Government and businesses alike) in terms of time and costs.
11th Annual Regional Tax Conference
On May 5, 2016, AmCham Slovakia hosted the 11th Regional Tax Conference that focused on attractiveness of tax systems as well as latest developments on OECD and EU initiatives on tax evasion and profit shifting. The full-day conference was a joint event of four AmChams (Czech Republic, Hungary, Poland and Slovak Republic); AmCham Hungary was represented by Botond Rencz, Tax Committee Chair. The conference brought together Visegrad group countries’ political leaders, tax experts, representatives of public institutions and the business community, as well as experts from the European Commission and the OECD to review best practices and to highlight problems and outline possible solutions. The Hungarian Ministry for National Economy delegated Zoltán Pankucsi Deputy Secretary of State to the conference.
Among several important topics, participants discussed:
- Tax system attractiveness – how V4 countries can attract more investments by effective tax policy
- OECD BEPS Initiative/ EU ATAD – measures against tax evasion and practical implications for the V4 region
Guest speaker of the Conference was Arthur Laffer, author of the “Laffer curve”, who is a Member of President Reagan Economic Policy Advisory Board, a former advisor to Prime Minister Margaret Thatcher, and a Wall Street Journal columnist.
Second Business Meets Government Summit
The Tax Committee, in cooperation with the Investment PTF prepared and organized a “Business Environment” roundtable discussion at the Second Business Meets Government Summit held on September 27th, 2016.
State Secretary István Lepsényi represented the Ministry for National Economy at the closed door discussion moderated by Botond Rencz, where participants discussed some key elements of the envisioned development of the Hungarian economy, where the key target is the transition from employment creation FDI projects to quality and higher value-chain FDI projects. A recommended action point was the cooperation and consultation of business and Government to make Hungary an attractive high value-chain location, initiating paradigm shift.
Other related suggestions included the increase of sustainability and efficiency, the decrease of bureaucracy and the introduction of new subsidies supporting the paradigm shift. Business representatives also confirmed that for future development it is essential to manage the labour shortage challenge.
For 2017, planned activities of the Tax Committee include:
- Developing tax and business environment related recommendations and positions
- Active involvement in meetings with key decision makers (NGM, HIPA) to follow-up policy recommendations
- Organization of a State Secretary roundtable discussion with Norbert Izer, Deputy State Secretary of the Ministry for National Economy
- Developing content and participation at the 12th Regional Tax Conference 2017 to be held in Prague
- Developing tax and business environment related recommendations for the Third Business Meets Government Summit 2017 - in cooperation with the Investment PTF
Committee Chair: Botond Rencz
Committee Coordinator: Judit Szilágyi
*To read the Annual Reports of the previous years, please click here.
*For more details on our upcoming projects and events for 2016 please contact the committee chair or the coordinator.