EY: Hungary has one of the most competitive tax systems in the world

By: Trademagazin Date: 2022. 11. 08. 10:51

Our country was among the top ten in this year’s ranking of the Tax Competitiveness Index, which examines the attractiveness of the tax systems of OECD countries. Hungary thus surpassed Sweden, Germany and Austria, among others, EY points out.

Hungary’s greatest strength is its corporate tax

Hungary advanced six places and became 7th among the 38 OECD countries examined in the international tax competitiveness ranking published by the Tax Foundation every year. Tax policy research examines the extent to which individual tax systems provide a suitable environment for investments, as well as for employees and businesses.

In the ranking, our country (7th) is ahead of Germany (15th), Austria (18th) and the United States (21st). In the V4 outlook, only the Czech Republic is ahead of us (5th), Slovakia ranks 13th and Poland 28th. At the top of the list – just like last year – is Estonia, while the leader this time is France (38th).

The study highlights that Hungary’s greatest strength is its corporate tax (9%), which is the lowest among OECD countries, and that the tax rules for international companies are also better than average. The survey also considers the unified personal income tax system to be an advantage. The report states that the VAT rate (27%) for maintaining these is the highest in Hungary among the examined states, so the analysis ranked Hungary at the bottom in terms of public consumption burdens this year as well.

“The competitiveness of the domestic tax system has increased significantly. These favorable conditions are now critically important from the point of view of the performance of the economy, as they increase the ability to attract capital and help investments to come to Hungary. Next year, the tax administration may further decrease, so it is expected that Hungary’s position will further strengthen”

said Róbert Heinczinger, EY’s tax partner.