getting the right deal - what should you consider when looking at an investment in hungary and...
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Getting the right deal - What should you consider when looking at an investment in Hungary and Budapest?
22 March 2013
Nick KósCountry Managing Partner PwC Hungary
www.pwc.com/hu
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Budapest International Business Center ConferencePwC 2
Getting the right deal
1.Strong tax competition for investors – What can be a winning formula?
2.What’s on the agenda of CEOs now?
3.Budapest – Could it be the city of the future?
22 March 2013
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Budapest International Business Center Conference3PwC
Getting the right deal
1. Tax battle
22 March 2013
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Budapest International Business Center ConferencePwC 4
Strong Competition for the Investors – Tax Battle How to attract them?
22 March 2013
The regional picture
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Budapest International Business Center ConferencePwC 5
Paying Taxes 2013Basic correlations
22 March 2013
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Budapest International Business Center ConferencePwC 6
22 March 2013
Paying Taxes 2013Basic correlations
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Budapest International Business Center ConferencePwC 7
Paying Taxes 2013Key findings at the global and local level
22 March 2013
277hours
In Hungary 12payments
50,3%Total Tax
Rate
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Budapest International Business Center ConferencePwC 8
22 March 2013
Paying Taxes 2013Corporate income tax is not everything!
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Budapest International Business Center ConferencePwC 9
22 March 2013
Paying Taxes 2013Key findings at the global and local level
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Budapest International Business Center ConferencePwC 10
22 March 2013
Paying Taxes 2013Key findings in the EU & EFTA
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Budapest International Business Center ConferencePwC 14
22 March 2013
Paying Taxes 2013Regional comparison
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Budapest International Business Center ConferencePwC 15
22 March 2013
Paying Taxes 2013Regional comparison
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Budapest International Business Center ConferencePwC 16
22 March 2013
Paying Taxes 2013Regional comparison
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Budapest International Business Center ConferencePwC 17
Individual perspectives Both refundable and non-refundable incentives are available to investors coming to or expanding in Hungary + „VIP” investment subsidy
22 March 2013
Source: HITA, 2012
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Budapest International Business Center Conference18PwC
Recently published tax changes
22 March 2013
•Extension of the applicability of investment incentives
•Realization of a flat personal income tax rate for all income
•Simplification of conditions for the implementation of e-invoicing
•Repeal of crisis taxes levied on special sectors
Forward-looking elements of the envisaged tax policy
•Shift in the tax burdens from income to consumption taxes
•Tax incentives to enhance job creation
•Simplification of administrative requirements
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Budapest International Business Center Conference19PwC
Getting the real deal
1. Tax battle2. CEO’s views
22 March 2013
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Budapest International Business Center Conference20PwC
PwC CEO Survey
22 March 2013
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Budapest International Business Center Conference21PwC
PwC CEO Survey
22 March 2013
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Budapest International Business Center ConferencePwC 22
How confident are CEOs about your company’s prospects for revenue growth over the next 12 months?
22 March 2013
Global (1330)
CEE (95)
Western Europe
(312)
Russia (41)
Romania (55)
Middle East (32)
Very confident 36 42 22 66 42 53
Somewhat confident 45 41 46 29 44 34
Not very confident 15 15 23 5 11 13
Not confident at all 4 2 9 0 4 0
18
Hungary
42
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Budapest International Business Center ConferencePwC 23
Search for growing markets…
22 March 2013
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Budapest International Business Center ConferencePwC 24
… but growth has more dimensions
22 March 2013
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Budapest International Business Center ConferencePwC 25
Global fear of governmental actions, rising TAX burden
22 March 2013
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Budapest International Business Center ConferencePwC 26
Government’s role – according to the CEOs
22 March 2013
The government has been effective in helping create a skilled workforce
The government has been effective at ensuring financial sector stability and access to affordable capital
The government has maintained a level playing field despite having stakes in private enterprises
The government is listening to Industry representants before making regulative steps
The government has reduced the regulatory burden on corporations
The government helps companies secure access to natural resources (e.g. raw materials, water, energy)
The government supports innovation in the private sector
0% 20% 40% 60% 80% 100%
23
35
39
40
35
10
15
27
25
24
22
27
22
16
28
16
8
9
15
31
19
9
9
8
3
9
16
26
1
1
2
4
2
4
4
12
14
19
18
12
18
21
Strongly disagree
Disagree
Neither agree nor disagree
Agree
Strongly agree
Don't know/ Refused
Reducing poverty and inequality
Ensuring financial sector stability
Creating and fostering a skilled workforce
0% 20% 40% 60% 80% 100%
29%
59%
60%
… And in compariosn: what role and how does it take on now?
Percentage of CEOs
In Hungarian CEOs opinion what should be the government’s priority?
!!
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Budapest International Business Center Conference27PwC
Getting the right deal
1. Tax battle2. CEO’s views3. What makes us a city/country of
future?
22 March 2013
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Budapest International Business Center ConferencePwC 28
3 Hungarian „success indurties” we used to be proud of…
-SSC
-Automotive
-Electronics
22 March 2013
… and what are the success factors here?
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PwC
Service sector
1991
1996
1998
1999
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
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Budapest International Business Center Conference30PwC
Automotive
22 March 2013
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Budapest International Business Center Conference31PwC
Electronics Industry
22 March 2013
Budapest
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Budapest International Business Center ConferencePwC 32
Budapest – Could it be the city of the future?
Capitals - the key issues:
• Intellectual and social capital
• Democratic capital
• Culture and leisure capital
• Environmental capital
• Technical capital
• Financial capital
Source: ‘Cities of the future: Global competition, local leadership’, PwC
22 March 2013
Economic factors are only part of the game!
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Budapest International Business Center Conference33PwC
International success stories from the CityPrezi.comUstream HungaryLogMeIn
122 March 2013
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Budapest International Business Center Conference34PwC
Assembly lines in Electronics vs. …
22 March 2013
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Budapest International Business Center Conference35PwC
… High value added, creative industries
22 March 2013
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… High value added, creative industries
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Budapest International Business Center Conference37PwC
The city of tomorrow
122 March 2013