Companies paid only 11.9% of profits as tax in 2005

Banking

Including the effect of tax allowances, companies on average paid only 11.9% of their corporate profits in taxes in 2005, even less than the 13.8% they paid in 2004, according to figures published by the tax office APEH yesterday. The actual taxation rates compare to a 16% corporate profit tax rate in both years. In 2005, Hungarian companies had combined pre-tax profit of Ft 3,240 billion, Ft 665 billion more than in 2004. They paid a combined Ft 352 billion in corporate tax, after accounting for Ft 119.7 billion in allowances. Tax revenue from corporate tax increased 4.7% from 2004. The Simplified Business Tax (EVA), a composite tax which small companies may opt to pay instead of the corporate tax, VAT and personal income taxes, generated revenue of Ft 91 billion in 2005, up from Ft 67 billion in 2004. Some 98,000 companies opted to pay EVA in 2005. Revenue of these companies increased from a combined Ft 514.7 billion to Ft 653.3 billion. EVA was 15% of gross revenue, before it was raised to 25% on September 1, 2006. APEH registered Ft 1,175.9 billion in revenue from personal income tax, including the effect of Ft 415.1 billion in tax allowances. About 18.9% of taxpayer's income went to the state in 2005, down from 19.3% a year earlier. (Econews, Népszabadság)

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