Egis has submitted an application for tax holiday, which could extend their current tax holiday with additional two years from 2008 until 2010 – according the company. Egis said the refurbishment of their tabletting and injection plant both in Budapest and in Körmend (worth of HUF 6.1bn investment) would enable them for the tax allowance. Accor
ding to the Hungarian taxation rules, 80% of the investment value can be deductible from the tax base if the application is successful. The tax allowance would not exempt the company from paying solidarity tax (it works similarly to a corporate tax), which was introduced last September.
Our view: We see the news as slightly positive for Egis, as we allocate high probability that the company will receive the tax allowance.