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Off-shore companies are leaving

Off-shore companies are gradually leaving the country, tax experts say.

Though in 2006 the off-shore status and its 4% tax bracket were abolished, offshore companies were kept in the country with a less than 8% corporate tax, and levies on the local business tax. But the recently introduced 4% solidarity tax managed to uproot these companies, since the combined 12% tax is higher than the 10% they have to pay in Cyprus and not significantly lower than the 12.5% in Ireland, said Gabriella Erdős, tax partner of consultancy PricewaterhouseCoopers.

Csaba László, tax partner of KPMG, expects a gradual decrease in the offshore companies’ activity, saying the majority of those desperate to leave are already gone. By amending the corporate tax law the government aimed to make Hungary the headquarters of holdings, i.e. the financing center for company groups, but Hungary is not really competitive enough in this field, said Erdős. (Napi Gazdaság)