Hungary asked to align corporate tax law with EU rules

The European Commission has called on Hungary to align its corporate income tax rules with EU anti-tax avoidance rules.

The EU has opened an infringement procedure by sending a letter of formal notice to Hungary in this regard.

The EU Commission identified divergent rules on the taxation of controlled foreign companies (CFCs) as well as a problematic definition of “associated enterprise” which, for the purposes of applying the Directive’s rules, should also include subsidiaries under common control.

The Hungarian legislation does not guarantee that.

Hungary now has two months to reply to the arguments raised by the EU Commission after which the EU Commission may decide to send a reasoned opinion.