Getting the right deal - What should you consider when looking at an investment in Hungary and Budapest? 22 March 2013 Nick Kós Country Managing Partner PwC Hungary

PwC 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? 2 22 March 2013Budapest International Business Center Conference

PwC Getting the right deal 1. Tax battle Budapest International Business Center Conference 3 22 March 2013

PwC Strong Competition for the Investors – Tax Battle How to attract them? Budapest International Business Center Conference 4 22 March 2013 The regional picture

PwC Paying Taxes 2013 Basic correlations Budapest International Business Center Conference 5 22 March 2013

PwC Budapest International Business Center Conference 6 22 March 2013 Paying Taxes 2013 Basic correlations

PwC Paying Taxes 2013 Key findings at the global and local level Budapest International Business Center Conference 7 22 March 2013 In Hungary

PwC Budapest International Business Center Conference 8 22 March 2013 Paying Taxes 2013 Corporate income tax is not everything!

PwC Budapest International Business Center Conference 9 22 March 2013 Paying Taxes 2013 Key findings at the global and local level

PwC Budapest International Business Center Conference March 2013 Paying Taxes 2013 Key findings in the EU & EFTA

PwC Budapest International Business Center Conference March 2013 Paying Taxes 2013 Regional comparison

PwC Budapest International Business Center Conference March 2013 Paying Taxes 2013 Regional comparison

PwC Budapest International Business Center Conference March 2013 Paying Taxes 2013 Regional comparison

PwC Individual perspectives Both refundable and non-refundable incentives are available to investors coming to or expanding in Hungary + „VIP” investment subsidy Budapest International Business Center Conference March 2013 Source: HITA, 2012

PwC Recently published tax changes Budapest International Business Center Conference 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

PwC Getting the real deal 1.Tax battle 2.CEO’s views Budapest International Business Center Conference March 2013

PwC PwC CEO Survey Budapest International Business Center Conference March 2013

PwC PwC CEO Survey Budapest International Business Center Conference March 2013

PwC How confident are CEOs about your company’s prospects for revenue growth over the next 12 months? Budapest International Business Center Conference March 2013 Global (1330) CEE (95) Western Europe (312) Russia (41) Romania (55) Middle East (32) Very confident Somewhat confident Not very confident Not confident at all Hungary 42

PwC Search for growing markets… Budapest International Business Center Conference March 2013

PwC … but growth has more dimensions Budapest International Business Center Conference March 2013

PwC Global fear of governmental actions, rising TAX burden Budapest International Business Center Conference March 2013

PwC Government’s role – according to the CEOs Budapest International Business Center Conference March 2013 … 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? ! !

PwC Getting the right deal 1.Tax battle 2.CEO’s views 3.What makes us a city/country of future? Budapest International Business Center Conference March 2013

PwC 3 Hungarian „success indurties” we used to be proud of… -SSC -Automotive -Electronics Budapest International Business Center Conference March 2013 … and what are the success factors here?

PwC Service sector

PwC Automotive Budapest International Business Center Conference March 2013

PwC Electronics Industry Budapest International Business Center Conference March 2013 Budapest

PwC 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 March 2013Budapest International Business Center Conference Economic factors are only part of the game!

PwC International success stories from the City Prezi.com Ustream Hungary LogMeIn March 2013Budapest International Business Center Conference

PwC Assembly lines in Electronics vs. … Budapest International Business Center Conference March 2013

PwC … High value added, creative industries Budapest International Business Center Conference March 2013

… High value added, creative industries

PwC The city of tomorrow March 2013Budapest International Business Center Conference