WORLD TRADE G/SCM/N/9/HUN/Suppl.1
8January 1997
ORGANIZATION(97-0020)
Original: English Committee onSubsidies andCountervailing Measures
NOTIFICATION UNDER ARTICLE 29.3OFTHE
AGREEMENT ONSUBSIDIES AND COUNTERVAILING MEASURES
HUNGARY
Supplement
Thefollowing communication, dated 27December 1996, hasbeenreceived fromthePermanent
Mission ofHungary.
_______________
Thepresent notification supplements thenotification ofsubsidy programmes contained in
document G/SCM/N/9/HUN.
Investment-related taxconcessions
ActNo.CVIof1995 amending theCorporate TaxActNo.LXXXVI of1991, andAct
No.LXXXI ontheCorporate TaxandDividend Taxmodified theeligibility criteria andduration of
investment-related taxconcessions.
Companies, thatafter31December 1995 began aninvestment fortheproduction ofgoods
ofatleastHUF 1billion mayreceive a50percenttaxbenefit inthose taxation years ofafive-year
period following theproject 'sstart-up when:
- export revenue increases by25percentbutatleastbyHUF 600million compared
totheprevious year; or
- thelevelofexport revenue inagiven yearcorresponds tothevalue calculated onthe
basis ofthesuccessive yearly export revenue increase of25percent or
HUF 600million.
Companies thatbegan aninvestment after31December 1995inanareaofparticular importance
(i.e.where theunemployment rateexceeds 15percent) orinanentrepreneurial zonemayreceive
100percenttaxbenefit inthose taxation years ofafive-year period following theproject 'sstart-up
when theexport revenue increases:
- atleastby1percentcompared totheprevious yearincaseofinvestments inanarea
ofparticular importance;
./.G/SCM/N/9/HUN/Suppl.1
Page2
- byanamount equivalent atleastto5percentoftheinvestment costs incaseof
investments inanentrepreneurial zone.
Theabove-referred investment-related taxconcessions cease toapply in2002.
Support forjob-creating investments
Decree 107/1996 oftheGovernment onthedetailed rulesofthebudgetary scheme earmarked
forTerritorial Development (thisearmarked scheme replaced theformer Territorial Development Fund
notified inG/SCM/N/3/HUN/Suppl.1) provides, interalia,forthesupport ofinvestments aiming at
creating jobs.
(i) Form ofthesubsidy andsubsidy perunit
Subsidies,awardedthroughtenderproceduresbytheTerritorialDevelopmentCouncils,
maytaketheform of:
(a) non-repayable grant, upto30percentoftheinvestment costs;
(b) repayable financial contribution, upto50percentoftheinvestment costs;
(c) interest subsidy forbankloans financing development projects, upto30per
centoftheinterest costs.
Subsidies maynotexceed HUF 700,000 peremployee.
Incaseofjob-creating investments which result in:
(a) generating employment forover50persons; or
(b) production ofgoods ofwhich more than50percentisexported theabove-
referred subsidy ceilings maybesurpassed:
- by10percentfornon-repayable grants;
- by20percentforinterest subsidy forbankloans.
Theamount ofsubsidy maynotexceed HUF 1million peremployee.
(ii) Policy objective andpurpose ofthesubsidy
Theobjective ofthesubsidy istorender assistance toinvestments generating newjobs
inparticular indisadvantaged regions withahighrateofunemployment.
(iii) Duration
Indefinite.
(iv) Nostatistical datapermitting anassessment ofthetrade effects ofthese subsidies are
available.