Commission announces in depth investigation regarding Hungarian taxation of intra-group interest

On 21 March 2007, the European Commission announced that it has started a formal investigation procedure under the EC State aid rules with respect to the Hungarian taxation of interest in the context of intra-group transactions. Details are summarized below.

Under the Hungarian scheme on taxation of interest in the context of intra-group transactions, the taxable income or expenses are 50% of the balance of the interest received from or paid to affiliated group…