Favourable changes in the non-refundable cash incentive system
Significant and favourable changes will be introduced in the non-refundable cash incentive system with the purpose of supporting R&D activities and technology-intensive investments as of January 1, 2017 in Hungary, according to the Government Decree 426/2016. (XII. 15.) updating the Government Decree 210/2014. (VIII. 27.) on the use of the Earmarked Scheme for Investment Promotion.
In line with the transformation of the Hungarian economy from a „manufacturing hub" to a remarkable „advanced manufacturing & innovation centre" of Europe, new forms of cash incentive measures shall be introduced from January 1, 2017 to enhance corporate R&D activities and the realization of technology-intensive investments. The incentives are based on individual government decision (Government Decree 210/2014 (VIII.27.)) and managed by the Hungarian Investment Promotion Agency (HIPA).
R&D cash subsidy
A new incentive measure is to be introduced to support the R&D activities (industrial research and experimental development) of large enterprises throughout Hungary, including Budapest. The aim of the new R&D cash subsidy is to promote the establishment of new R&D centres besides the support of companies already performing R&D activities in Hungary.
The criteria of eligibility shall be to reach EUR 3 million of R&D project related expenditure during a minimum one and maximum three-year-long period and the increase of R&D headcount by 25 employees. The maximum aid intensity will be 25%.
A new incentive measure is to be introduced to support the technology-intensive investments of large enterprises which employ more than 250 people in Hungary. The aim of the new CAPEX based subsidy is to promote those capacity expansion and technology-intensive investment projects which do not result in the increase of the headcount. The criteria of eligibility shall be the realization of a minimum EUR 30 million investment within a three-year-long period and the increase of either the wage cost or the net sales revenue by 30% until the third financial year after the commencement of the investment. The maximum available aid shall be not higher than ¼ of the applicable maximum regional aid.
Amendments of the incentive system
The following favourable amendments of Government Decree 210/2014 (VIII.27.) shall also enter into force from January 1, 2017:
- Agricultural processing related investment projects will be entitled on a wider-base for VIP Cash Grant.
- In Békés, Nógrád, and Szabolcs-Szatmár-Bereg counties EUR 5 million investment value and creation of 50 new jobs will be the minimum eligibility criteria for VIP Cash Grant.
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