NEW RULES ON THE VIP
PACKAGE
How can the VIP package coexist with
the EU co-financed scheme?
Kamilla Szandrocha
Head of Department for Incentive
Programs
 Incentive system for strategic investors
 Coexistence of individual cash grant and EU tenders
 Changes in regulation in 2007
 The Investment and Trade Development Agency of
Hungary (ITDH): one-stop-shop also in subsidies
Incentive system for strategic investors
I. Direct incentives
Development cash grants


Individual cash grant OR
Subsidies co-financed by the European Union available by
tenders
Employment-related grants


Job-creation subsidy
Training subsidy
II. Indirect incentive

Development tax allowance
Coexistence of individual cash grant and
EU tenders I.
Differences between individual cash grant and
EU tenders
Individual cash grant is available

only for large investments (investment volume at least EUR 10
million, minimum job-creation of 25-50 employees)

for investments located anywhere in the country

through the whole year
Tender applications are available

for all size of investments

in Central Hungary tenders are available only for SMEs

only through some months of the year
Coexistence of individual cash grant and
EU tenders II.
The coexistence
In case of investment volume between EUR 10 and 25 million if
the project is entitled for subsidies available within tenders, it
cannot receive individual cash grant.

Reasons: budgetary and regulatory

Implementation: ITDH is checking all the applications of
investments between EUR 10 and 25 million with the National
Development Agency
Changes in Regulation I.
Maximum intensity ratios in 2007
Automotive industry belongs no more to
sensitive sectors!
Borsod-AbaújZemplén
SzabolcsSzatmár-Bereg
Nógrád
KomáromEsztergom
Győr-MosonSopron
Vas
Heves
Budapest
Pest
Veszprém
Fejér
Hajdú-Bihar
Jász-NagykunSzolnok
Zala
Békés
Somogy
Tolna
Bács-Kiskun
less
developed
regions
Csongrád
Baranya
25%*
+ 10 % for medium enterprises
+ 20 % for small enterprises
30%
40%
50%
*after 2011: 10%
Changes in Regulation II.
Changing eligible costs
 Customs and duties are eligible
 Non-deductible VAT directly connected to the purchasing of the assets
is eligible
 Costs of the demolition of a real estate are eligible
 By SMEs the investor should maintain the subsidized capacities only
for 3 years instead of 5
 Intangible assets are eligible up to 50% of the total eligible costs
(up to 100% by SMEs)
 Costs of the off-site infrastructure are not eligible
 In case of a shared service centers wage related costs of the rented
workforce are not eligible
 All machinery and equipment has to be new (except by SMEs)
Changes in Regulation III.
Administrative changes by individual cash grant

The method of applying for aid
Filing the application form to ITDH. (In 2006: sending a LoI to the Minister of
Economy.)

Starting date of the investment
Investment costs raised after the acknowledgement of the aid application are
eligible. (In 2006: investment costs raised after sending of a LoI)
ITDH: one-stop-shop also in subsidies
1.
Individual cash grant at one window
From 2007 March: instead of three public bodies (ITDH, Ministry of
Economy and Transport, Hungarian Development Bank/MAG Zrt.) all
procedures are concentrated at ITDH till signing the incentive agreement.
2.
Strengthening ITDH with the mediation of other
subsidies


ITDH is able and entitled to provide information on all kinds of
subsidies
The agency can accept subsidy applications by development tax
allowance and job creation subsidy
Thank you for your kind attention!
Kamilla Szandrocha
Head of Department for Incentive Programs
ITDH
Phone: +36 1 473 8262
Fax:
+36 1 473 8260
Email: [email protected]
www.itd.hu
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