Development tax allowance is a tax allowance that companies may apply from their corporate tax. Development tax allowance may be applied from (and to an extent of up to 80 percent of) the calculated corporate tax in the form of tax withholding in the case of the following investments:
- investments of a value of at least 3 billion forints at present value;
- investments put into operation and operated within the administrative area of specific, preferred municipalities of a value of at least 1 billion forints at present value;
- investments of a value of at least 100 million forints serving the providing of food hygiene conditions of a facility producing foodstuffs of animal origin already in use;
- independent environment protection investment of a value of at least 100 million forints at present value;
- investment of a value of at least 100 million forints at present value serving basic research, applied research or experimental development;
- investments of a value of at least 100 million forints serving film and video production exclusively;
- investments serving the creation of jobs;
- investments of a value at least 100 millon forint at present value that was started the day following the admission of shares in course of the icrease of subscribed capital to trading on a regulated market, but started at latest the last day of the 3rd year following day of the admission;
- investments of a value of at least 200 million forints at present value implemented by small size enterprises;
- investments of a value of at least 300 million forints at present value implemented by medium size enterprises;
- investments of a value of at least 100 million forints at present value put into operation and operated within a free enterprise zone.
The investment has to be a start-up investment implemented by:
- a small or medium size enterprise or
- a large enterprise
- in any of the regions other than the Central Hungary region,
- or in one of the towns in the Central Hungary region specified as eligible for support in the relevant government decree as an investment for the performance of a new business activity.
Further to the above, in the case of putting into operation of an investment of at least 6 billion forints at present value and an investment for job creation of at least 3 billion forints at present value, a tax allowance may be applied too, provided that investment implemented by a large enterprise is located in one of the towns of the Central Hungary region eligible for support and qualifies as a start-up investment generating product diversification or a start-up investment generating new process innovation.