Hungary may be the most attractive in the regional contest to provide the lowest corporate tax rates, according to a survey by professional services firm KPMG. The tax will fall from 18% to 16% in 2004 - only marginally higher than that of Ireland's 12%, KPMG says.
However, the country's high local business tax, up to 2% of net revenues, may well be an investment disincentive, the study adds. In addition, Hungarian taxes on wages are the highest in the region.
Corporate tax rates in the region's eight accession countries are well below the EU and OECD average - with Estonia being the lowest, at 0% in certain circumstances. In five out of the eight countries surveyed, a decrease in corporate tax is expected from 2004, and further decreases are planned in the coming years. In addition, most CEE countries provide other tax incentives, such as deductions for certain activities, tax holidays for investments, and so on.
