From now on, companies can also move freely within the EU

By: Trademagazin Date: 2022. 09. 12. 07:27

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From September 1, not only individuals can move from Hungary to another EU member state, but also companies. Although you have to wait quite a few months at the border, at the end of the day our limited company can become, for example, a GmbH. In addition, moving can even bring tax benefits. We summarize the new regulations with the help of the Jalsovszky Law Office.

Not only entrepreneurs, but also companies can move freely

Czoboly Gergely

The possibility for Hungarian companies to become “foreign” for tax purposes has been available for a long time. This requires nothing more than to move the company’s actual place of business management abroad. After that, with limited paperwork, it is possible for the company to get out of the Hungarian corporate tax system and simultaneously become a tax subject of another country.

The neuralgic point of the possibility is how the place of business management of the company will be transferred abroad. This practically occurs when the main decision-making body of the Hungarian company actually makes the most important decisions abroad and manages the company from abroad. At the same time, however, the company’s other assets and employees often move to another EU member state.

In such a case, the company will still be a Hungarian limited liability company. remains, however, in terms of taxation, it is subject to the rules of foreign law. This can be especially beneficial if the company finds greater discounts in the foreign tax system than in the domestic one – so e.g. faster depreciation or a higher R&D discount. However, it is important to see that when moving out of Hungary, the so-called imposes an “exit tax”. That is, the difference between the market value and the book value of assets transferred abroad must be paid immediately upon moving.

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