Jalsovszky Law Firm

Tax, M&A, Real Estate and Commercial Law Firm in Budapest, Hungary

Jalsovszky Law Firm

Csörsz utca 41.
MOM Park, Gellért Tower

Budapest H-1124

Phone+36 (1) 889-2800
Fax +36 (1) 886-7899

Website www.jalsovszky.com
Contact Jalsovszky Law Firm Contact the Law Firm

Law Firm Overview

Jalsovszky Law Firm, located in Budapest, Hungary, is an independent commercial law firm with nearly ten years of service to businesses working and growing in Hungary. Our practice areas include tax law and advisory services, including litigation; mergers and acquisitions and investment fundraising; commercial, residential and industrial real estate; banking and finance for borrowers and lenders, including Hungarian and foreign companies, financial institutions, state or municipal bodies, and international monetary institutions; competition law in Hungarian and EU matters; and commercial law such as corporate, employment, and intellectual property law, commercial agreements and negotiations, and routine legal advice in the various fields of commercial activity.

Founding Lawyer Pal Jalsovszky's team of tax and legal professionals adopt a pragmatic and proactive approach, applying extensive knowledge of Hungarian and international law to bring innovative legal solutions to complex challenges.

Jalsovszky Law is devoted to the service of local and international business, giving entrepreneurs and investors the world over counsel and representation for long-term success within Hungary.

Year this Office was Established: 2005

Languages: Hungarian, German, English

Areas of Law

Additional Areas of Law: Club and Bilateral Lending; Restructurings and Refinancing; Acquisition; Structured Finance; Derivative Transactions.

Areas of Law Description

The Jalsovszky Law Firm provides legal representation in the following areas of practice:

- Tax

As the market leading independent tax advisory practice in Budapest, we regularly design novel structures optimizing clients’ tax liabilities, whilst meeting all legal and regulatory requirements. Our tax advisory service combines our legal experience and tax expertise which ensures that all clients receive properly documented tax-efficient solutions.

- Mergers & Acquisitions

Our M&A team regularly advises on transactions covering the sale and purchase of businesses as well as investment fundraising. We ensure that our legal solutions are structured to meet commercial as well as legal and tax requirements. We work in an efficient manner delivering results within the often short timescales demanded by such transactions.

- Real Estate

Our property lawyers understand the key issues facing clients, active in the Hungarian property market. Using our local knowledge, we can identify the key risks and deploy structures to manage them, to ensure a successful transaction. Our property law expertise covers all types of residential, commercial and industrial properties.


István Csővári Mr. István Csővári


Ágnes Bejó Ms. Ágnes Bejó
Mergers and Acquisitions

Tamás Fehér Mr. Tamás Fehér

Péter Gyimesi Mr. Péter Gyimesi
Mergers and Acquisitions, Real Estate

Pál Jalsovszky Mr. Pál Jalsovszky
Mergers and Acquisitions, Tax

Katalin Perényi Ms. Katalin Perényi
Mergers and Acquisitions

More Information on Jalsovszky Law Firm

Tax Law
Real Estate
Commercial Law
Banking & Finance
Mergers & Acquisitions
About Jalsovszky Law Firm
Jalsovszky Law Firm Blog
Jalsovszky Law Firm News and Publications

Articles Published by Jalsovszky Law Firm

 Company Law Pitfalls – with Serious Consequences in Hungary

The new Civil Code that came into force a couple of years ago broadened the autonomy of companies, which are now free to shape their internal organisation and operation to their own needs. Nevertheless, there are still several lesser-known, rigid company-law rules that, if ignored, can entail severe legal and financial consequences.

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 International Disputes: If You Want to Litigate, Be Careful Where You Do It

From early this year a new law accords to states the jurisdiction over lawsuits, i.e. which country has the right to decide on cases having international elements. Nevertheless, it is still true that in international legal disputes one of the most important (and far from simple) issues is: which country’s court will decide the dispute and under which country’s laws.

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 Sometimes Less Is More: Taxes in Hungary

Our traditional survey again looks at how many types of taxes there are in Hungary. The number of Hungarian taxes has fallen by one again this year, so we’ve counted 58 this time. The decrease, however, is of a technical nature only, while at the same time we continue to live with taxes such as the seemingly ineradicable charge payable on household employees or the newly introduced poster tax.

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 NAV Is Coming to Hungary - 10 Questions You Should Know the Answer To

Since the start of the year there have been new laws in place regulating tax audits and tax lawsuits. The stakes are pretty high: the National Tax and Customs Administration (NAV) conducts almost 30,000 audits annually, assessing tax deficiencies of about HUF 500 billion and imposing fines of almost the same amount. Therefore it is important to know the rights taxpayers have under the new rules and the most efficient ways to fight NAV.

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 Bitcoin: Not Black, Not White

While more and more people all around the world are being bitten by the bitcoin bug, tax authorities are subjecting transactions executed with the cryptocurrency to ever closer scrutiny. Meanwhile, it is increasingly obvious that the world of bitcoin is starting to give shape to a new form of tax haven.

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 “I May Be Gone for Some Time” – Tax Implications of Hungarians Moving Abroad

Numerous tax advantages can be gained if someone switches to being subject to the tax laws of another country (i.e. changes his tax residency). Although the country in which a private individual has residence is not a matter of choice, with careful planning of his personal circumstances it is possible to influence where he is taxed. And this affects anyone who takes on work abroad, whether for a short or a longer period.

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 How to Win a Tax Lawsuit in Hungary . . . Easily, Quickly and Simply

Winning a tax lawsuit is a difficult and lengthy process, and often there are no guarantees of victory even when you’re totally confident that you correctly accounted for every transaction. So it’s worth paying particular attention to the opportunities for triumphing over the tax authority relatively easily and without any complications. What is more, recent case law has expanded the range of these options.

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 When Does a Tax Lawsuit Begin in Hungary? New tactics Will Be Needed in Tax Lawsuits from January

New laws taking effect on 1 January next year will transform the tax audit procedure and the way tax lawsuits unfold. While some of the amendments are business-friendly, they also conceal a number of traps that are clearly detrimental to taxpayers’ interests. For example, the rights of taxpayers to defend themselves against the tax authority, and to make use of experts, will be compromised.

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 Domiciliation Service Providers under Threat in HUngsary

A recently revealed ministerial decree could render the operation of domiciliation service providers in Hungary untenable – at least for those who provide this service at a high professional standard. As the new piece of law contains no explanation, the question that springs to mind is: who does the new legislation favour?

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 Company Managers on the Blacklist in Hungary

Many people could be in for a nasty surprise when trying to set up a company: the company court refuses to register the majority owner or managing director on grounds that the person is subject to a ban.

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 ESOP (Employee Share Ownership Programme): The Latest Craze in Hungary

ESOP (Employee Share Ownership Programme) entities have been springing up like mushrooms in Hungary since last year, and the acronym itself has become something of a buzzword. And this is hardly surprising, as ESOP entities can be a tax efficient vehicle for paying out work incomes. Caution is advised, however: alongside the many advantages, the regulations also conceal a number of pitfalls.

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 Harder Times Ahead for Participants to Cartels in Hungary

It is becoming a practice that companies involved in cartels are being sued by market players who have suffered losses as a consequence of a cartel and now want to recover the extra costs they have incurred. The new provisions based on an EU directive and adopted in Hungarian legislation early this year to help the effectiveness of claims for damages are slowly achieving their objective.

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 Taxation of Chain Transactions in Hungary: Exactly What it Seems

One of the most frequent areas of dispute between the tax authority and taxpayers relates to the conditions under which a taxable entity participating in a chain transaction can deduct the VAT passed on to it.

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 Tax Lawsuits: The operation was successful… the patient is deceased

There is no use of winning a lawsuit against the tax authority if the enterprise goes bankrupt before the judgement is rendered. And such an outcome is by no means uncommon, as under the current laws the tax authority can initiate enforcement proceedings against a business while the suit is still in progress. What’s more, experience shows that the tax authority doesn’t shy away from enforcement even in the absence of the solid legal grounds for pursuing that route.

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 End to n Unjust Fine in Hungary?

Under current practice the Tax and Customs Administration (NAV) fines taxpayers that are caught with a VAT shortfall even if the budget has sustained no losses. An opinion recently published by the Advocate General of the European Court of Justice could spell the end for this extremely unfair and much criticised procedure.

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 Auditor’s Approval in Hungary Is No Guarantee that NAV Won’t Fine You

It’s common knowledge that in Hungary, calculation of the corporate tax liability is based on the items recognised in the accounting books. But a nasty surprise could lie in store for taxpayers who think they can apply the principles of accounting recognition fully in the course of calculating corporate tax.

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 Taxes in Hungary: More than a Lot

According to [some] calculations there are presently 60 taxes in force in Hungary. Value added tax accounts for 25% of central tax revenues whereas the personal income tax accounts for 13%. However, most taxes account for less than 1% of these tax revenues. The figure of 60 different taxes seems slightly excessive also in an international context.

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 Innovative Employee Incentives – Are They at the Doorstep?

One of the most efficient ways to motivate employees is to make them owners. In Hungary, however, plenty of legal and tax obstacles have restricted the introduction of such incentive so far. Changes made to the legal and tax environment in the recent years may yet boost the spread of employee stock programmes in the future.

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 Luxembourg is Deleted from the Map of Hungary

The recent amendment of the Luxembourg - Hungary double tax treaty will result in a sharp decrease of Luxembourg-based schemes for Hungarian real estate transactions. Those groups which currently use such schemes for holding their Hungarian real estates will need to react fast.

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 “Off-shore” Restrictions of Grant Legislation Pose Unnecessary Threats to Multinationals

The “anti-offshore” law relating to the use of public funds, introduced in 2011, aimed to prevent off-shore companies with unidentifiable ownership structure from acquiring grants out of domestic and EU public funds. The original intention of the legislation seriously distorted, however. Numerous innocent foreign-owned firms, including Hungarian subsidiaries of US-based multinational firms got trapped by the rules.

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 A Lease May Not Always be a Lease for VAT

Lease services often lead to uncertainty from a VAT perspective. Some services which seem like lease at first glance do not meet the criteria “lease” for VAT purposes. The improper classification can lead to surprises: on the one hand the lessor’s deduction right can be challenged, on the other hand a seemingly VAT-exempt transaction could trigger VAT liability. A recent ECJ decision will set standards for these situations.

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 EKAER Rebooted - Concessions for Multinationals

The Hungarian government just recently finalised the new rules for the controversial EKAER system.

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 The Hidden Treasure - Many Software Developers do not Exploit their Tax Benefits

Software developer companies fall under a very favourable corporate income taxation in Hungary. Moreover, their income is local business tax exempt. Surprisingly, however, most of such companies are not aware of their beneficial status, losing billions of forints as a consequence.

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 The Family Grows Bigger - The Definition of Related Parties Expands

The recently adopted tax law changes significantly expand the definition of related parties. As of 2015 not only those companies will qualify as related parties which are connected in their ownership chain, but also those with an overlap in their management. As a result, the number of transactions where parties have to apply arm’s length pricing will increase. The new definition may, however, cause uncertainties as well.

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 Can I Be Certain that I Acquired the Property?

Before purchasing a real property it is obvious that the purchaser examines whether the seller is the registered owner of the property and whether the title deed lists any encumbrances relating to the property. If, however, the investigation stops at this point and does not cover the transaction on the basis of which the seller acquired the property, the purchaser may face some unpleasant surprises.

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 Sale of a Leased Property in Hungary – Pleasure or Pain?

In the property market it is usual to sell such commercial or residential real estates that are leased out. On the basis of the new Civil Code, the seller of such property will not be relieved, by the sale, from its liability towards the tenants. If the purchaser breaches any of its obligations towards the tenants, then the seller may also be held liable, even if the property had been sold many years ago.

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 The Majority Shareholder Falls Out Of Control in Hungary

The corporate law is based on the “majority principle”: the majority shareholder can control the decisions at the shareholders’ meeting. While the old Companies Act already contained certain exceptions to this principle the new Civil Code broadens the scope of the exceptions.

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 Time for Heroes or Villains? New Legislation Brings Rules for Whistleblowing in Hungary

“Whistleblowing”, i.e. the reporting of misconduct occurring in an organisation, has a considerable history in the United States and the United Kingdom. The legislation of these countries has already elaborated the process, how employees can report anomalies discovered at their workplace to their employer.

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 Long-term Investment Account - Hole in the Net

The purpose of the personal income tax is to make Hungarian tax residents liable to tax on all their personal income irrespective of where the income is sourced and in which form it is realized. The personal income tax laws, therefore, create a net around the individuals and any item of income can only get through the net if it has been taxed.

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 Can an Arm's-Length Principle Fall Outside the Arm's-Length Range?

The Metropolitan Court passed a strange judgement in a recent case. According to the judgement, taxpayers cannot argue that they used arm’s-length price in their transaction with their related companies if the corresponding transfer pricing document does not meet the legal requirements.

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 FATCA from the Account Holder's View

While banks and other financial institutions are already preparing for the introduction of FATCA, the system is less commonly known by banking clients. The objective of this article is to summarise the most important changes and decision points the introduction of the FATCA system will mean to clients holding their bank accounts with non-US banks.

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 Presumption of Fictitious Invoices introduced? - Hungary

The audit of the authenticity of invoices has been one of the primary inspection targets for the National Tax and Customs Administration (NAV) during the last few years. Despite the numerous Hungary-related decisions of the European Court of Justice last summer, the legislator introduced a series of year-end tax law changes that will allow the tax authority to maintain its current practice.

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 The Hungarian Holding Company Regime: It Offers Everything and a Little More

When the tax planning departments of multinational enterprises look for favorable locations for holding companies they mostly end up in using Dutch, Luxembourg, Cypriot and Maltese companies. Only few of them know that the Hungarian holding company tax regime, introduced in 2006, offers basically all the advantages that the customary holding locations do. It is also not widely known that the Hungarian system has a unique feature which allows even more flexible and broader use.

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 Company Sale: Limited Opportunities, Unlimited Liability - Hungary

With the amendment of the Bankruptcy Act of Hungary, from 1 March 2012 the legislator has significantly expanded the scope of such circumstances when the unlimited liability of the former shareholder of a company can be established. The present article wishes to highlight those circumstances when the unlimited liability of the former shareholder of a company can be established and the ways how such liability can be avoided.

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Things we always wanted to know about ourselves... and were not afraid to ask

In the summer of 2012 we carried out a customers satisfaction survey collecting many of our clients' opinions about our services. This presentation contains the major conclusions of that survey.

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