Summary
“Hungary Upstream Fiscal and Regulatory Report - Increased Tax Burden Balanced by Reduced Royalty Rates”, presents the essential information relating to the terms which govern investment into Hungary’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Hungary’s upstream oil and gas investment climate.
Scope
- Overview of current fiscal terms governing upstream oil and gas operations in Hungary
- Assessment of the current fiscal regime’s state take and attractiveness to investors
- Charts illustrating the regime structure, and legal and institutional frameworks
- Detail on legal framework and governing bodies administering the industry
- Levels of upfront payments and taxation applicable to oil and gas production
- Information on application of fiscal and regulatory terms to specific licenses
- Outlook on future of fiscal and regulatory terms in Hungary
Reasons to buy
- Understand the complex regulations and contractual requirements applicable to Hungary’s upstream oil and gas sector
- Evaluate factors determining profit levels in the industry
- Identify potential regulatory issues facing investors in the country’s upstream sector
- Utilize considered insight on future trends to inform decision-making
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1 Table of Contents
1 Table of Contents 1
1.1 List of Tables 3
1.2 List of Figures 3
2 Regime Overview 4
3 State Take Assessment 6
4 Key Fiscal Terms 8
4.1 Concession Fees 8
4.2 Royalties 8
4.2.1 2008 Onwards 8
4.2.2 Pre-2008 Rates 10
4.3 Direct Taxation 10
4.3.1 Corporate Income Tax 10
4.3.2 Energy Suppliers’ Tax 10
4.3.3 Local Business Tax 10
4.3.4 Deductions and Depreciation 10
4.3.5 Development Tax Allowance 11
4.3.6 Royalty Credit for Energy Suppliers’ Tax 12
4.3.7 Withholding Tax 12
4.4 Indirect Taxation 12
4.4.1 Value Added Tax 12
4.4.2 Customs Duties 12
4.5 EU Emissions Trading Scheme 12
5 Regulation and Licensing 13
5.1 Legal Framework 13
5.1.1 Governing Law 13
5.1.2 Contract Type 13
5.1.3 Title to Hydrocarbons 13
5.2 Institutional Framework 14
5.2.1 Licensing Authority 14
5.2.2 Regulatory Agency 14
5.3 Licensing Process 15
5.3.1 Licensing Rounds 15
5.3.2 Bidding 15
5.4 License Terms 15
5.4.1 Duration 15
5.4.2 Work Obligations 15
6 Outlook 16
7 Contact Information 18
1.1 List of Tables
Table 1: Summary 4
Table 2: Hungary, Concession Fee (HUF), Fourth Round, 2016 8
Table 3: Hungary, Standard Royalty Rates (%), 2016 9
Table 4: Hungary, Fixed Asset Depreciation Rates (%), 2016 11
Table 5: Hungary, Maximum State Aid Intensity Limits (%), 2016 11
1.2 List of Figures
Figure 1: Regime Flow Chart 5
Figure 2: Hungary, Indicative NPV10/boe, IRR and State Take Comparison - Regional , 2016 6
Figure 3: Hungary, Indicative NPV10/boe, IRR and State Take Comparison - Internal, 2016 7
Figure 4: Hungary, Legal Framework 13
Figure 5: Hungary, Institutional Framework 14
