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UPDATE 1-Hungary seen changing R&D rules for drug firms

* Govt plans to change pharma R&D write off rules - website

* Richter, Egis stocks fall, underperform market

(Adds detail, analysts, stocks)

BUDAPEST, Nov 17 (Reuters) - Hungary is planning to change write-off rules for research and development costs for pharma firms, according to a draft bill submitted to parliament, which could hurt drug makers.

Pharmaceuticals stocks Egis EGIS.BU and Richter GDRB.BU both fell on Wednesday, underperforming the wider market .BUX on concern the change could result in a new tax.

The government has imposed big windfall taxes on banks, the retail, energy and telecoms sectors from this year onwards, but the pharma sector has so far escaped.

The change in regulation, if parliament approved it, could hurt both Egis and Richter, analysts said.

The text of the bill amendment on parliament’s website contained only a half-sentence reference indicating a potential change in write-off rules.

Business website Portfolio.hu reported that, based on the bill, drug companies could no longer write off R&D costs from tax payments on subsidised drugs and fees payable on sales agents.

“Based on what we can see in the current form of the bill, Richter and Egis will not be able to reduce payments to the state by about 500-600 million forints per quarter,” Equilor analyst Akos Kuti said. “For me it is not a surprise that the pharma companies join those sectors which receive extra (tax) burdens, but the market had not calculated with that.”

At 1126 GMT Richter was down 1.4 percent at 44,600 forints while Egis stock dropped 1.3 percent. The Budapest bourse's index was up 0.4 percent..BUX

Jozsef Miro at Erste said: “Allegedly there are several plans ... it is not certain that this (bill) will be OKed as it is. Everybody is trying to assess what it means, but this again raises uncertainty.”

Egis and Richter both declined comment.

The economy ministry was not available for comment. (Reporting by Krisztina Than; Editing by Dan Lalor)

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