Comparison of Supplementary Contributions, Capital Increase, and Shareholder Loans from a Tax and Capital Recovery Perspective

In the course of operating a business association, it is often necessary to consider the form in which shareholders provide additional funding to the company. The most common options are supplementary contributions, capital increase, and shareholder loans. Each of these forms carries different legal, tax, and financial consequences, so choosing the appropriate structure is crucial for the company’s liquidity and the shareholders’ capital recovery. The table below outlines the key differences between these three financing methods under Hungarian law, with particular emphasis on the tax regulations applicable in 2025.

Aspect	Supplementary Contribution	Capital Increase	Shareholder Loan
Legal form	Specific form of financial contribution that does not increase registered capital	Increase of registered capital (in cash or in kind)	Loan relationship, repayable monetary funds
Time of capital recovery	Only upon dissolution without legal successor, if company assets allow	Only upon capital reduction or dissolution	According to contract or mutual agreement
Tax implications for the company	Not considered taxable income	Not taxable, but involves administrative costs	Interest may be deductible; transfer pricing rules must be observed
Tax implications for the shareholder	No direct tax impact	No taxable income realized	Interest income may be subject to PIT (15%) and social contribution tax (13%)
Return on capital	Not guaranteed	Indirect, through increase in value	Realized through interest
Accounting treatment	Recorded as separate item within equity	Recorded as increase in registered capital	Recorded as liability
Flexibility	Medium	Low	High
Creditor protection	Strong	Strong	Weak
Dividend base inclusion	Not included	Increased profit may be included in dividend base	Not applicable