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New law to cut gift duties

Banking

The planned amendment of the duty law lowers the gifts tax on assets handed over free between companies that are in a 100% ownership relation with each other.

The duty would be decreased from 40% to 11% - 21%. However, this generous proposal, by drawing attention to the fact that companies are supposed to pay duty after such gifts seems to become a threat since no company has ever paid any duty of this kind. Tax authority APEH, the heir of the duty offices, is quite likely to recover it retroactively because the 2007 budget bill expects 25% more revenue, i.e. Ft 126.8 billion form duties. Some past transactions may cost now even billions of forints. APEH should announce amnesty, like with fake contracts, said tax advisor Gabriella Erdős at a conference of PricewaterhouseCoopers. From now on no company will resort to this, predicted Deloitte tax partner Péter Oszkó. The real function of these deceptive transactions rather belong to the category of capital investment or dividend payout, he added. (Napi Gazdaság)

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