DOUBLE TAX TREATY BETWEEN HUNGARY AND THE SLOVAK REPUBLIC
The Double Tax Treaty between the Slovak Republic and Hungary was published on 26 March 1996 in part 28 of the collection of the acts. The Double Tax Treaty came into force on 21 December 1995, when the diplomatic notes were exchanged.
According to the Double Tax Treaty dividends paid by a company which is a resident of one of the countries to a resident of the other country may be taxed in that other country. If the recipient is the beneficial owner of the shares the tax in the first country on the dividends shall not exceed 5% if the owner is a company which owns 25% of the payer, and 15% in all other cases.
Interest arising in one country and paid to a resident of the other country shall be taxable only in that other country, if the resident is the beneficial owner thereof.
Royalties arising in one country and paid to a resident of the other country may be taxed in that other country. The tax in the first country shall not exceed 10%, if the recipient is a beneficial owner.
THE RULING OF THE MINISTRY OF FINANCE FROM 5 FEBRUARY 1996 REGARDING THE TAX DEDUCTIBILITY OF EXPENDITURES OF PREMATURELY TERMINATED LEASING CONTRACT.
If a financial leasing contract is prematurely terminated, for tax purposes the lease payment can be included in the expenses (costs) up to the amount of the straight line tax depreciation which the tax payer could have claimed if the taxpayer, as the owner of the leased asset, had depreciated it.
In order to determine the appropriate level of the tax depreciation the acquisition price of the leased asset included in the financial lease contract shall be taken into account.
THE ACT ON BANKS
Complete wording of the Act on Banks of 20 December 1991, as amended, was published on 6 March 1996 in part 22 of the collection of the acts.
AMENDMENT TO THE INCOME TAX LAW
An amendment to the Income Tax Law which has been previously refused by the President and returned for further re-negotiations was subsequently approved by the parliament.
The amendment will be in force when published in the Collection of Laws.
The amendment allows the purchasers of newly - privatised companies not to include any discount of the purchase price allowed by the Fund of National Property in their tax base, if the discount is invested by the purchaser.
According to Finance Minister S. Kozlk, the amendment will not affect budget revenues, but will promote economic growth and stimulate investments.
The content of this article is intended to provide a general guide to the subject matter. It is therefore not a substitute for specialist advice.
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