What should investors know on the real estate holding company in Hungary?
Investors who want to start the process of company registration in Hungary
for a real estate holding company
should be aware of its tax regime and other obligations that can be applied to the company. Our team of consultants in Hungarian company formation
can assist you with in-depth information concerning this matter, and in the following section you can discover few of the highlights of this type of holding
When we refer to taxes, Hungary
can provide an attractive framework. Those who want to open a company in Hungary
can benefit from one of the lowest corporate taxes charged in this region, amongst numerous other tax benefits. However, for each company type, specific tax obligations will appear, and this is also the case of the Hungarian holding company
For instance, the holding company
can be subjected to paying the transfer tax, which can be payable in the case of purchasing or selling real estate properties, but also when one holds shares in a real estate company
. However, the transfer tax can be charged in specific situations.
For instance, when we refer to the real estate holding company, the tax is charged when the shareholding in a real estate holding company is of at least 75%. According to the law in Hungary, a real estate holding company is defined by the assets that represent real estate. In Hungary, the real estate assets have to account for 75% of the company’s entire assets. Still, it is necessary to know that such assets have to be Hungarian based real estate properties.
Please mind that the obligation to pay the corporate income tax can arise in a Hungarian holding company, at the moment when real estate holding companies are sold, even at an international level. In this case, the tax will be charged to capital gains arising from the sale.
Those who will buy shares in a real estate holding company will have certain obligations after the respective purchase, in the sense that they must report the event with the local tax institutions. When this scenario happens in a real estate holding company, the buyers have the obligation to report the purchase in a period of 30 days since the date of the purchase.
In this particular case, the investors have to complete a form; our team of consultants in company formation in Hungary
can offer more details regarding this subject. You can address to our team
for tax consultancy services regarding the tax obligations and benefits of a real estate holding company
As a general rule, the holding company in Hungary is not allowed to engage in economic activities, but there are certain operations that can be considered as such. For instance, the holding company is entitled to provide management services to the subsidiaries of the holding, and this can be considered a type of economic operation.
If this happens, please mind that the holding
has the right to deduct the costs associated with this operation, and can also recover the VAT charged for the activity. Our team of specialists in Hungarian company formation
can present more details on the procedure applied to VAT. Our team can offer information on any other tax matters, as well as the reporting obligations of a holding company
. If you need accounting services
, you can always rely on us.
Please mind that a holding company that operates as a financial company is not allowed to submit simplified annual reports. This is especially applied for holding companies that respect the definition of the Article 2 of the Directive 2013/34/EU.
Our accountants in Hungary can present more information concerning the reporting requirements applied to this company type.