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Articles by: Grant Thornton Hungary

Public Holidays in 2025-2026

Public Holidays and Working Time Schedule in Hungary – 2026

The Hungarian Government has published the official schedule for public holidays and related changes in working days for the year 2026. Based on this, employers and HR professionals can begin planning working time calendars, payroll schedules, and working time frameworks.

For 2025 public holidays, click here.

Deviations from the Regular Work Schedule 2026

The adjusted working schedule for 2026 applies to all employers and employees working under the standard workweek. The following Saturdays are designated as working days in exchange for long weekends:

  • Saturday, 10 January – working day (in exchange for Friday, 2 January)
  • Saturday, 8 August – working day (in exchange for Friday, 21 August)
  • Saturday, 12 December – working day (in exchange for Thursday, 24 December)

Long Weekends in 2026

In 2026, employees can expect three 3-day weekends and two 4-day weekends, including the Christmas holiday.

Public Holidays, Rest Days, and Shifted Working Days – 2026

Date Day Holiday Type
1 January Thursday New Year’s Day Public holiday
2 January Friday Rest day (shifted)
3 January Saturday Rest day
4 January Sunday Rest day
10 January Saturday Working day (shifted)
15 March Sunday National Holiday – Revolution of 1848 Public holiday
3 April Friday Good Friday Public holiday
4 April Saturday Rest day
5 April Sunday Easter Sunday Rest day
6 April Monday Easter Monday Public holiday
1 May Friday Labour Day Public holiday
2 May Saturday Rest day
3 May Sunday Rest day
23 May Saturday Rest day
24 May Sunday Pentecost Sunday Rest day
25 May Monday Pentecost Monday Public holiday
8 August Saturday Working day (shifted)
20 August Thursday State Foundation Day Public holiday
21 August Friday Rest day (shifted)
22 August Saturday Rest day
23 August Sunday Rest day
23 October Friday 1956 Revolution Memorial Day Public holiday
24 October Saturday Rest day
25 October Sunday Rest day
1 November Sunday All Saints’ Day Public holiday
12 December Saturday Working day (shifted)
24 December Thursday Christmas Eve Rest day (shifted)
25 December Friday Christmas Day Public holiday
26 December Saturday Christmas Holiday Public holiday
27 December Sunday Rest day

Public holidays in 2025

The ministerial decree on the working schedule around public holidays in 2025 has been published. Based on this, the planning and preparation of working time calendars, payroll preparation calendars, working time banking systems and working time calculations for 2025 can be started.On 8 April 2024, Decree 11/2024 (IV. 8.) NGM of the Minister of National Economy on the working schedule around public holidays in 2025 was published.The working schedule around public holidays in 2025, which entails a deviation from the calendar working schedule, applies to all employers and their employees working on the general working schedule.

For 2024 public holidays, click here.Let’s see what workdays will be rescheduled in 2025

  • 17 May 2025, Saturday: workday – 2 May 2025, Friday: rest day
  • 18 October 2025, Saturday: workday – 24 October 2025, Friday: rest day
  • 13 December 2025, Saturday: workday – 24 December 2025, Wednesday: rest day

Saturdays rescheduled as workdays in 2025

From the above, it can be seen that there will be a total of three workdays falling on Saturdays in 2025: 17 May, 18 October and 13 December.

Long weekends in 2025

Next year, we will have plenty of long weekends: one weekend will be three days long and three weekends will be four days long, in addition to the five-day Christmas weekend.

Public holidays, rest days and rescheduled workdays in 2025

Date Day Holiday Type
1 January Wednesday New Year’s Day Public holiday
15 March Saturday 1848 Revolution Memorial Day Rest day
18 April Friday Good Friday Public holiday
19 April Saturday   Rest day
20 April Sunday Easter Sunday Rest day
21 April Monday Easter Monday Public holiday
1 May Thursday Labour Day Public holiday
2 May Friday   Rest day (shifted)
3 May Saturday   Rest day
4 May Sunday   Rest day
17 May Saturday   Working day (shifted)
7 June Saturday   Rest day
8 June Sunday Pentecost Sunday Rest day
9 June Monday Pentecost Monday Public holiday
20 August Wednesday State Foundation Day Public holiday
18 October Saturday   Working day (shifted)
23 October Thursday 1956 Revolution Memorial Day Public holiday
24 October Friday   Rest day (shifted)
25 October Saturday   Rest day
26 October Sunday   Rest day
1 November Saturday All Saints’ Day Rest day
13 December Saturday   Working day (shifted)
24 December Wednesday Christmas Eve Rest day (shifted)
25 December Thursday Christmas Day Public holiday
26 December Friday Second Day of Christmas Public holiday
27 December Saturday   Rest day
28 December Sunday   Rest day

Public holidays in 2024

Let’s also review workdays will be rescheduled in 2024

  • 3 August 2024, Saturday: workday – 19 August 2024, Monday: rest day
  • 7 December 2024, Saturday: workday – 24 December 2024, Tuesday: rest day
  • 14 December 2024, Saturday: workday – 27 December 2024, Friday: rest day

Saturdays rescheduled as workdays in 2024

Based on the above, we can see that there will be a total of three Saturday workdays in 2024: 3 August, 7 December and 14 December. To compensate workers for the long weeks in December, the Christmas period will consist of a single, six-day-long weekend, which can be turned into a holiday of more than ten days by taking a couple of days off.

Long weekends in 2024

We have plenty of long weekends this year, with virtually all, public holidays falling during the middle of the week.  Four of these weekends will be three-day weekends and two will be four-day weekends, in addition to the six-day Christmas weekend.

Public holidays, rest days and rescheduled workdays in 2024

1 January 2024 Monday New Year’s Day Public holiday
15 March 2024 Friday 1848 Revolution Day Public holiday
16 March 2024 Saturday Rest day
17 March 2024 Sunday Rest day
29 March 2024 Friday Good Friday Public holiday
30 March 2024 Saturday Rest day
31 March 2024 Sunday Easter Sunday Rest day
1 April 2024 Monday Easter Monday Public holiday
1 May 2024 Wednesday Labour Day Public holiday
18 May 2024 Saturday Rest day
19 May 2024 Sunday Pentecost Sunday Rest day
20 May 2024 Monday Pentecost Monday Public holiday
3 Aug 2024 Saturday Workday (rescheduled!!)
17 Aug 2024 Saturday Rest day
18 Aug 2024 Sunday Rest day
19Aug 2024 Monday Rest day (rescheduled!!)
20 Aug 2024 Tuesday State Foundation Day Public holiday
23 October 2024 Wednesday 1956 Revolution Day Public holiday
1 November 2024 Friday All Saints’ Day Public holiday
2 November 2024 Saturday Rest day
3 November 2024 Sunday Rest day
7 December 2024 Saturday Workday (rescheduled!!)
14 December 2024 Saturday Workday (rescheduled!!)
24 December 2024 Tuesday Christmas Eve Rest day (rescheduled!!)
25 December 2024 Wednesday  Christmas Day Public holiday
26 December 2024 Thursday Second Day of Christmas Day Public holiday
27 December 2024 Friday Rest day (rescheduled!!)
28 December 2024 Saturday Rest day
29 December 2024 Sunday Rest day

Mid-market optimism falls as tariff threats become reality

For the first time in two years, mid-market business leaders are less optimistic about the outlook for their economy over the next 12 months, with 73% expressing optimism (down three points from Q4 2024) as the threat of tariffs become reality in global trade. No surprise then that economic uncertainty remains the leading concern for the mid-market, according to 55% of respondents to Grant Thornton’s latest International Business Report (IBR).

There is a significant regional divergence in economic sentiment across the global mid-market suggesting different perspectives of the potential adverse effects of tariffs in different regions. Following changes in political leadership in the United States optimism fell by seven points to 81% among mid-market business leaders, while Canada, one of the primary targets of tariffs, saw optimism plummet 14 points to 55%. There was also a notable 12 point drop in optimism in South America down to 63%. European mid-market confidence remains unchanged at 61%, as was Asia-Pacific’s with optimism stable at 74%, while Africa saw optimism increase three points to 71%.

The nuanced outlook is evident as marginally fewer business leaders anticipate increased profitability over the next 12 months, down one point to 63%. While the impact of tariffs remains uncertain and with elevated inflation persisting in some markets, marginally more business leaders plan to increase selling prices, up one point to 54%. Despite the uncertainty a record proportion of mid-market businesses expect to see an increase in revenue growth, up two points to 66%.

Given the trade headwinds, it’s not surprising that fewer business leaders expect to increase exports, down two points from its previous peak to 53%. Additionally, fewer plan to expand the number of countries they sell to, down three points to 48%, while those expecting to increase the number of employees focused on non-domestic markets is down four points from its previous peak to 40%. In contrast, more business leaders expect to see an increase in revenues from non-domestic markets, up two points to 52%, possibly indicating they are focusing on the markets they already operate in over expanding into new ones.

Business leaders anticipate very minor changes in operations, with marginally fewer expecting to increase employment over the next 12 months, down two points to 56%. And while those planning to invest in salary increases is down two points, a clear majority of 88% recognise the need to invest in the staff they have.

Business constraints

Following the record number of elections held around the world last year, newly elected governments have introduced policy changes that are influencing financial market trends. While inflation rates are falling in many economies, some nations are facing growth stagnation, leading several central banks to reevaluate their monetary policy and increase or hold interest rates at higher levels for longer. These factors are creating concerns among business leaders about a shortage of available finance, up three points to 46%, and regulation and red tape, up two points to 51%.

As trade tensions increase, so do business leaders’ concerns about supply chains, with 48% citing it as a concern (up one point from Q4 2024). Equally concerns over competition increased to 53% (up one point), while concerns over cybersecurity remain static at 52%.

After a spike in the previous quarter, concerns over energy costs have decreased to 53% (down two points). Those citing the availability of skilled workers as a concern remain static at 53%, while concerns over labour costs decreased to 51% (down two points).

Investment intentions 

Amid noticeable US policy uncertainty, investment intentions have dropped slightly. Information technology remains the number one investment choice of business leaders, with 68% planning to increase spending over the next 12 months (down one point). Within technology investments AI remains the most significant segment, with a 10 point rise (to 69%) in those planning to invest in this area, a clear indication that AI is starting to become a business reality.

Research and development slowed down significantly, with 58% of respondents expecting to increase investment (down three points from the previous quarter). Fewer business leaders are planning investments in their brand, with 61% planning increases (down one point), while significantly less business leaders are focused on sustainable initiatives with 55% planning to invest in this area (down five points). Investment in plant and machinery saw a significant decrease to 51% (down three points).

However, investment in people remains a focus for many business leaders, with a record 62% planning workforce increases (up one point). Equally, investment in workspaces increased to 55% (up two points) suggesting businesses are more focused on enhancing their operational efficiency and employee satisfaction.

Peter Bodin, CEO of Grant Thornton International Limited commented:

“Our latest IBR research highlights a multifaceted global economic environment, where mid-market optimism is tempered by uncertainties in trade policy. Despite these challenges, business leaders remain committed to international business and technology investments, particularly in AI.

The data reveals significant regional variations in economic sentiment, with optimism waning in North and South America, while remaining stable in Europe and increasing in Asia and Africa, reflecting the expected impact of US trade policies and economic conditions. It will be interesting to see how sentiment changes as businesses react to these policies.

Investment in sustainability initiatives has notably declined, yet the emphasis on enhancing operational efficiency and workforce development remains robust. This shift indicates that businesses are prioritising immediate operational needs over long-term sustainability goals in response to current economic pressures.

In these uncertain times, it is crucial for mid-market businesses to remain agile and strategically assess the global and regional impact of trade policies and geopolitical tensions. By focusing on core strengths and adapting to evolving market dynamics, businesses can navigate challenges and seize growth opportunities.”

Year-end VAT and product charge optimisation opportunities

The deadlines for many decisions or entitlements in relation to value added tax (VAT) and environmental product charges are the end of December and January, which are worth considering and taking advantage of from a tax optimisation or even administrative reduction perspective, as those who decide and act in time can greatly facilitate their operations in the new year.

Year-end decisions related to VAT

 VAT-exempt status

Until the last day of the year, 31 December, eligible businesses can opt for an exemption from VAT and must notify the National Tax and Customs Administration (hereinafter: “NAV”) of their decision. Businesses must maintain their chosen status for two years and cannot voluntarily change it within that time period. (Of course, those businesses that start their activities during the year may also opt for the exemption during the year.)

The conditions for opting for the exemption are as follows: the amount of the consideration, expressed in Hungarian forints and aggregated on an annual basis, which the enterprise has received or is to receive in return for the supply of goods or services within Hungary may not exceed 12 million Hungarian forints either as actually paid in the preceding calendar year or reasonably expected to be paid in the current calendar year.

If a company opts for VAT exempt status, it will not be liable to pay VAT in this capacity and will only be able to issue invoices without VAT. However, as a matter of course, it will not be entitled to deduct VAT either. A taxable person who opts for a VAT exemption is also exempt from the obligation to declare VAT.

Making the sale or the leasing out of immovable property taxable

Under the VAT Act, the sale of immovable property with buildings erected more than two years before, as well as immovable properties (other than building plots) with no buildings on them, and also the leasing out of residential and other properties is exempt from VAT. Therefore, sellers and lessors are not liable to pay VAT on the sale or lease of such immovable properties, but due to their tax-exempt status, they are not entitled to deduct VAT on purchases made in connection with the sale or rental of immovable property either.

To avoid this problem, the legislation provides for the possibility of making the above sales and leasing activities subject to VAT (separately or even together), which also entitles taxable persons to deduct the related VAT. Taxable persons must notify NAV of their choice to become subject of VAT before the start of their activities, but those who have already carried out such activities but wish to become subject of the VAT from the following year must notify their choice by the last day of the year preceding the year in question, i.e. by 31 December.

Before the decision, it is worth considering whether or not potential customers are taxable persons eligible for VAT deduction, because for the latter the gross consideration is what matters and the VAT-added selling price may even put them at a competitive disadvantage, and it should also be borne in mind that the taxable status cannot be changed until the end of the fifth calendar year following the year of that choice.

Selecting cash accounting

Let us not forget about the option to opt for cash accounting, the deadline for which decision is also 31 December. Businesses using cash accounting incur the VAT liability when their customers have paid them the purchase price, and they can only exercise their right to deduct VAT on their purchases once they have paid the purchase price to their vendors. However, cash accounting does not only affect businesses that opt for it, but also the rights of their customers. Indeed, customers of such a taxable persons can only exercise the right to deduct VAT if the customer has already paid the purchase price on the invoice of the taxable person opting for cash accounting.

The following conditions must be met for businesses to be eligible for using cash accounting:

  • the business must be established for business purposes in Hungary;
  • on the first day of the calendar year in question, it must be a small enterprise within the meaning of the provisions of the SME Act (or it should qualify as one if it was subject to the Act);
  • the business cannot be subject to bankruptcy or liquidation proceedings;
  • the net amount of the consideration, aggregated on an annual basis, which the enterprise has received or is to receive in return for the supply of goods or services within Hungary may not exceed 125 million Hungarian forints either as actually paid in the preceding calendar year or reasonably expected to be paid in the current calendar year.

Choice of VAT conversion rate

Where the VAT tax base (as a main rule, the consideration) is denominated in a foreign currency, taxable persons must choose the exchange rate quoted in foreign currency as the selling rate in the domestic currency of a financial institution authorised to carry out currency exchange operations in the country of establishment for the conversion into Hungarian forints. They may also choose the official exchange rate of the Central Bank of Hungary (MNB) or the European Central Bank (ECB), but they must notify the NAV in advance. When making this choice, it should be noted that the MNB or ECB exchange rates cannot be deviated from until the end of the calendar year following the year of choice. When a company is set up, the MNB exchange rate is often chosen automatically, but it is not necessarily the exchange rate chosen for accounting purposes in the accounting policy at the start of the activity. In such a case, it may be advisable to change the previously chosen VAT conversion rate at the end of the two-year prohibition period in order to avoid the distortive effect of persistent exchange rate differences on the profits.

Overpayment and expiry of rolled-over VAT

At the end of the year, businesses should check both their overpayments in their NAV tax current accounts and the reductions carried over from the previous period in their last VAT returns (previously deducted but not yet reclaimed VAT –  rolled-over VAT), to see if they expire on 31 December. (The right to reclaim the overpayment and the right to reclaim the tax expires, unless otherwise provided by law, five years after the last day of the calendar year in which the right to reclaim the overpayment or the tax is triggered.)

NAV cancels the overpayment registered in the tax current account automatically and without prior notice, so it is worth checking these amounts and, if necessary, before the end of the year, arrange for such amounts to be transferred to another tax account to reduce arrears there or request these amounts to be refunded. Similarly, it is worth checking whether some or all of the VAT rolled over would expire on 31 December and whether it can still be used as a tax deduction in the last VAT return of the year or whether there are circumstances where its refunding could be requested by self-auditing a previous VAT return before the end of the year.

Time limit for the right to deduct VAT

In VAT returns it is possible to deduct input VAT on transactions for which the right of deduction has been opened in the period concerned or before, but not earlier than the first day of the preceding calendar year. In practical terms, this means that the last opportunity to deduct input VAT on purchases of goods and services made in 2023 without self-auditing is in the last VAT return period of 2024. Thereafter, the amount of deductible VAT can only be reclaimed through self-auditing the VAT return period in which the right to deduct was opened (in principle, this is when the transaction was completed). Of course, this is also only possible if the relevant return period has not yet been closed by an audit.

To avoid unnecessary administration, it is therefore advisable at the end of the year to review the 2023 invoices containing VAT deductible amounts not yet taken into account, so that they can still be included in the last VAT return of the year.

Decisions in connection with product charges

Taxable persons liable to pay product charges have two options to consider, although in this case the deadline to notify their choice is not the end of the year, but 31 January 2025.

Taking into inventory

The product charge liability can arise at different times:

  • on the date of performance shown on the invoice issued for the first placement on the domestic market, or in the absence of an invoice issued, on the date shown on another document that certifies the performance of the transaction, or in the absence of such other document, on the date of the performance of the transaction;
  • in the case of use for own purposes, on the date on which the use for own purposes is accounted for as a cost, or, if this date cannot be determined, on the date of performance of the transaction;
  • in the case of use for own purpose related to the dismantling of packaging imported from abroad, if the date cannot be determined on the basis of the foregoing, the date of final dismantling of packaging;
  • in the case of other petroleum products of domestic production, on the date of the invoice issued by the first buyer of the first distributor placing the product on the domestic market, or on the date of performance as shown on another document certifying the completion of the transaction, or on the date when the use for own purposes is accounted for as a cost;
  • in the case of a shortage or destruction of products exceeding an accountable shortage, on the basis of the documentary evidence of the shortage or destruction of the products subject to the charge, on the date on which it is entered in the accounts.

For the sake of administrative simplification, the obligor may choose to incur the obligation to pay the product charge from the current year onwards on the date on which the goods subject to the product charge are taken into inventory. This must be notified to NAV by 31 January of the year in question at the latest, but the notification does not have to be repeated for each year in question, as it will be continuous.

In addition to the notification, the taking into inventory is dependent on the condition that an inventory of the goods subject to the product charge in stock on the first day of the year in question must be drawn up and the product charge must be declared and paid in the return for the first product charge assessment period of the year in question. The way in which the liability is incurred cannot be changed within the current year, but it is possible to revert to the general rules from the following calendar year. In order to do this, an inventory of the products subject to the product charge in stock at the turn of the year must be taken and the products in stock must be recorded separately in order to avoid having to pay the product charge again.

Choice of flat-rate product charge

The following types of operators may opt to pay a flat-rate product charge:

  • low-volume issuers (those placing goods subject to the product charge on the market, using them for own purposes or taking them into inventory),
  • agricultural producers, and
  • distributors of motor vehicles.

Obligors must notify NAV of the activity carried out with the product subject to the product charge, as well the intention to pay the flat rate, within 15 days of the start of the activity. An obligor that is registered with NAV prior to the current year and has opted for a flat-rate payment of product charges for the current year must make the notification by 31 January of the current year.

The notification does not have to be repeated for each year if the conditions for the obligation to pay the product charge on which the declaration is based remain unchanged. The choice of flat-rate payment may not be changed within a given year, except in cases where the quantitative limits are exceeded.

***

This newsletter is based on the information available at the date of its publication and is written for general information purposes only; therefore, it does not constitute or replace personalised tax advice in any respect.

Year-end changes to the tax system

The autumn tax package submitted to Parliament on 29 October 2024 underwent a number of amendments before its promulgation on 28 November 2024. In the following, we will provide an overview of the most important changes, in a breakdown according to tax categories.

Personal income tax 

Date of income in case of services used

For services provided free of charge by a payer, the rule before 1 January 2024 will be reintroduced as regards the determination of the date of income. This means that the date on which the income is earned is the date on which the provider of the service becomes or would become liable to pay tax with attention to the date of performance according to the provisions of the VAT Act. Under this rule, the liability may be established weather or not an accounting document is issued for the supply.

For purchased services, the rule introduced from 1 January 2024 remains in force, under which the date of the income is the date on which the accounting document for the service is available.

Increase of the amount of family tax allowance

The amendment provides for an increase of the amount of the family tax allowance depending on the number of children, including the allowance for children who are permanently ill or severely disabled. The increase will be implemented in two phases:  the amount of the allowance will be increased to 1.5 times the current rate from 1 July 2025, and to twice the current rate from 1 January 2026.

The rate of the family tax allowance (as an item reducing the consolidated tax base) per beneficiary dependant and per month of entitlement will be as follows:

All figures in HUF per child

Present to 30 June 2025 1 July 2025 to 31 December 2025 From 1 January 2026
For one dependent 66,670 100,000 133,340
For two dependants 133,330 200,000 266,660
For 3 and more dependants 220,000 330,000 440,000
Additional allowance for a permanently ill child 66,670 100,000 133,340

Flat-rate lump-sum taxation for persons providing private accommodation services

The range of properties eligible for the flat-rate option (private accommodation) has been extended to include not only holiday homes and flats, but also farm buildings, or a delimited part thereof, suitable for human habitation.

Furthermore, a distinction has been made in the flat-rate tax rate depending on whether the number of nights spent on the settlement where the accommodation is situated exceeds 2 million nights. If the private accommodation is located on such a settlement, the individual will have to pay HUF 150,000 of personal income tax per room per year instead of HUF 38,400. The list of these popular tourist destinations where the number of nights spent exceeds 2 million will be published by the National Tax and Customs Administration by 15 January 2025.

Use of non-wage benefits on the SZÉP Card for housing renovations

Up to 50 percent of the non-wage benefits provided by employer, as shown in the account balance of the Széchenyi Recreation Card (SZÉP Card) on 1 January 2025 and transferred to the account in 2025, may be used for housing renovation expenses in 2025. The products and services eligible for housing renovation are defined in the Government Decree on the rules for the issue and use of the SZÉP Card.

The new “Active Hungarians” sub-account of SZÉP Card

If the payer is the employer, it will be considered as a non-wage benefit if, during the tax year,

the employee receives an annual allowance not exceeding HUF 120,000, credited to the “Active Hungarians” sub-account associated with a limited-purpose payment account of Széchenyi Recreation Card benefits. The allowance is intended to promote an active lifestyle. Any amount exceeding the above limit is classified as “other non-wage benefit”.

Housing allowance for workers under 35 years of age

In addition, from 2025, a benefit not exceeding HUF 1,800,000 per year granted by an employer to an employee under 35 years of age to help pay rent or to repay a housing-purpose loan is also considered a non-wage benefit. Any amount exceeding the above limit is also classified as “other non-wage benefit” provided.

When applying for the housing allowance, the individual must present to the employer the lease or loan contract on which the housing allowance is based. If the amount of the housing allowance claimed by the individual in the year in question exceeds the amount of the rent or loan repayments certified as having been paid by the individual and for which the individual is liable, the individual must declare 50% of the excess amount as a differential penalty in his/her tax return for the tax year and pay it as personal income tax.

Changes in tax-exempt benefits 

  1. Tax-free transfer of deposit fees and packaging subject to the deposit refund system:

Payers may transfer products subject to the deposit refund system (i.e. packaging of specified beverage products) to individuals tax-free. The deposit fees paid by the distributor and provided by payers are also tax-free.

  1. Use of sports facilities and equipment as a tax-free benefit:

Employees and other private individuals will now be able to use sports facilities and sports equipment provided by employers or other payers for the purposes of sports free of charge or at a reduced price as a tax-free benefit.

  1. Tax-free provision of admission tickets to zoos:

The range of admission tickets and passes for sporting events and cultural services that can be granted tax-free has been extended to include zoo admission tickets and passes. In accordance with the previous rules, tax-free allowances of up to the minimum wage may be granted in any one year. As under the previous rules, the voucher does not entitle the holder to a tax-free allowance.

  1. Gifts given at a sporting or national events:

Representation and business gifts given in connection with the organisation of a major sporting event or national event under the Government Decree on the designation and definition of certain tasks of the National Event Organisation Agency Nonprofit Private Limited Company will henceforth be tax-free benefits.

  1. Use of voluntary pension savings for housing purposes

An additional service provided by a voluntary mutual pension fund under Section 74 of the Act on Voluntary Mutual Insurance Funds. This may take the form of support for the repayment or prepayment of a mortgage loan or an employer’s loan for housing; support for the down payment on a housing-purpose loan or credit agreement; support for the modernisation, renovation or extension of a dwelling; support for the purchase of a dwelling or building plot for the construction of a dwelling; and support for the construction of a dwelling.

  1. Sale of properties designated as protected monuments

Income from the sale of a real property classified as a protected monument under the Hungarian Architecture Act within 36 months of its acquisition will be exempt from tax, provided that the individual has renovated the property in accordance with the monument protection regulations, has carried out monument restoration after the acquisition, and has a certificate to this effect issued by the heritage protection authority, and the sale is not made in the context of business activities in the framework of an economic entity of as a sole trader.

Corporate income tax 

Differences arising from different legal classifications of the same situation by different states

If a taxpayer recognises a cost or expense or applies a tax base deduction that is recognised as a cost or expense (tax base deduction) in the tax base of both the taxpayer and a foreign person due to a difference in domestic and foreign law, the loss due to the disallowed expense could not be used in the future for twice recognized income, so it was permanently lost for taxpayers. The amendment intends to remedy this shortcoming of the legislation and will allow taxpayers to take previously disallowed expenses into account.

Extension of depreciation under the CIT Act

Land and plots used for the storage of hazardous waste may be subject to a depreciation equal to the accounting depreciation on the basis of Corporate Income Tax Act. This option is first available for tax year 2024.

Free allowances in connection with popular team sports

From 1 January 2025, free allowances paid to professional sports organisations that are in the field of popular team sports and the economic or business turnover of which for the tax year derives at least 75 per cent from sports activities will be recognised as eligible expenses. An additional condition is that no more than 1 per cent of the beneficiary’s turnover under the CIT Act for the tax year is recognised as an expense and that the beneficiary must have a written certificate with the appropriate data content issued by a professional sports organisation in the field of popular team sports.

Extension of the scope of the benefits linked to popular team sports

From 29 November 2024, taxpayers can also provide support (donations) to the national sports federation for popular team sports for the costs of operating a sports property. The total value of certificates of support may not exceed 80 percent of the supported organisation’s approved costs of operating its sports-purpose property.

Global minimum tax

Reporting obligation

Under the previous rules, the only requirement for a notification to be filed within 12 calendar months of the start date of the tax year was that “the report must present the multinational group of companies or large domestic group of companies.” In addition, from 29 November 2024, the notification must also include the identification of the group members (including their tax number, EU VAT number), the state in which they are resident, as well as the classification of each company under the GloBE Act. The notification must also include information on the overall corporate structure of the group, including the shareholdings of each group member in other group members.

Fortunately for taxpayers, the Hungarian Tax and Customs Administration (NAV) introduced the 2024 GLOBE filing form, available in the Online Form Filling Application (ONYA) with the previous, more restricted information content on 5 December 2024. As it is an ONYA form, it can only be completed and submitted by a person who has a registered power of representation for the company with NAV.

New: obligation to pay tax advances

A domestic group member or a designated local entity acting on its behalf must assess, declare and pay a recognised domestic additional tax advance for the tax year. The deadline is the 20th day of the eleventh month following the last day of the tax year to which the recognised domestic additional tax relates, i.e. when the tax year 2024 corresponds to the calendar year, the deadline is 20 November 2025.

Data content of the advance tax return:

  1. the identification data of the domestic group member;
  2. the recognised liability of the domestic group member for the domestic additional tax advance.

The amount of the recognised domestic additional tax expected to be payable for the tax year will be assessed as the tax advance. Late payment penalty, tax penalty and default penalty in respect of the advance payment may not be applied if the group member acted in good faith.

Value-added tax (VAT)

Assignment of VAT deduction right

In order to combat the grey economy (reducing tax evasion through the use of an indirect customs representative), the from 1 March 2025, there will be more restrictions on in what cases an indirect customs representative is entitled to exercise the right of deduction for the importation of goods instead of the principal.

Postponement of the introduction of e-receipt system

The introduction of the e-receipt system is expected from 1 July 2025 instead of the originally planned 1 January 2025, giving the taxpayers concerned more time to prepare.

Extension of the scope of domestic reverse charge cases

As from 1 January 2025, supplies of natural gas between taxable dealers will be subject to reverse charge, making the taxable dealer who purchases the natural gas the entity liable to pay the tax in respect of these transactions. The measure aims to reduce VAT fraud.

For supplies of natural gas subject to reverse charge, the rule imposes an obligation to provide information on both the taxable person supplying and the taxable person acquiring the goods.

The amendment will apply for the first time to transactions for which the date of supply falls on or after 1 January 2025.

Changes in the rules applicable to VAT-exempt status

From 2025, taxable persons who are exempt from VAT in their home Member State will be able to opt for exemption in other Member States. A domestic taxable person that has opted for exemption from VAT cannot exercise a right of deduction in respect of domestic acquisitions used for transactions carried out in another EU Member State in which it has not opted for a VAT exemption.

In addition, the right of an exempt taxable person to opt for the one-stop shop for imports is reduced.

The taxable amount of the domestic supply of goods and services must include the tax-free consideration of the domestic supply of goods and services. Further, given that the supply of goods and services is subject to the exemption, the taxable person may not deduct the tax on the goods and services acquired for the purpose of the supply.

Extension of the 5% VAT rate for new residential properties

The Autumn Tax Package extends by 2 additional years the reduced rate of 5% VAT on the sale of certain new residential properties. This means that the reduced VAT rate on the sale of new residential properties will continue to apply after 31 December 2024 until 31 December 2026. In addition, the amendment provides for a transitional rule to deal with protracted construction works, so that the 5% rate may be applied until 31 December 2030 to all construction works for which the building permit has become final on 31 December 2026 at the latest or for which the construction has been notified under the simple notification rules by 30 September 2024 or has been acknowledged by 31 December 2026.

Preparation of a summary report without rounding (in HUF)

Under the current rules, the summary report on the invoices received must indicate the tax base and the tax rounded to thousands of HUF per voucher, but the legislator argued that this makes it difficult to compare the data with the online invoice data service and with other lines in the returns. The aim of the amendment is to ensure that the invoice data in this report are expressed in HUF. The return will continue to be in thousands of forints, but the breakdown of the data reported will have to be in forints from 1 January 2025.

Environmental product charge

From 2025, the environmental product charge (EPC) will no longer apply to products covered by both the product charge scheme and the extended producer responsibility (EPR) scheme. Accordingly, the administrative obligation (including the obligation to declare and register) will be abolished for packaging materials/products, electrical and electronic equipment, tyres, batteries, promotional and office paper.

Excise tax

Changes in tax rates or valorisation (adjustment) for inflation

From 2025, the excise tax rates on energy products and tobacco products are increasing as follows:

  • on natural gas: for supply, sale or use as fuel for road vehicles 36 HUF/kWh (increased from 32 HUF/kWh), otherwise HUF 0.3879/kWh (increased from 0.3492 HUF/kWh);
  • on electricity: 398 HUF/MWh (increased from 358.50 HUF/MWh);
  • on coal: HUF 3,230 HUF/metric ton (increased from 2,905 HUF/metric ton);
  • on heating oil: in the case of supply, sale or use for heating, 5,970 HUF/metric ton (instead of 5,375 HUF/metric ton), and HUF 116,000 HUF/metric ton in the case of supply, sale or use as fuel (for vehicles);
  • on LPG: HUF 95,800 HUF/metric ton for supply, sale or use as motor fuel for road vehicles, HUF 16,320 HUF/metric ton for supply, sale or use for other motor purposes (increased from 14,685 HUF/metric ton), and 0 HUF/metric ton for supply, sale or use for heating purposes;
  • on cigarettes, 32,300 HUF/thousand pieces (increased from 29,500 HUF) and 24% of the retail selling price, but not less than 45,200 HUF/per thousand (increased from 41 800 HUF);
  • on cigars and cigarillos, 14% of the retail selling price, but not less than 5,230 HUF/thousand pieces (increased from 4,840 HUF);
  • on fine-cut smoking tobacco and other smoking tobacco: 28,060 HUF/kilogram (increased from 25,960 HUF);
  • on liquid filler: 36 HUF/ml (increased from of 33 HUF);
  • on new tobacco product categories containing tobacco or consumed together with tobacco:
    • in case of single-use products, 38 HUF/piece (increased from 35 HUF);
    • in case of liquids 76 HUF/ml (increased from 70 HUF);
  • for smokeless tobacco products, 28,060 HUF/kg (increased from 25,960 HUF);
  • for nicotine replacement products 28,060 HUF/kg (increased from 25,960 HUF);
  • for heated products: 38 HUF/piece (increased from 35 HUF).

After 2025 (and, in some cases, after 2024), the excise tax rates for energy products, fuels, tobacco and alcohol products will be revalorised in line with inflation. The inflation-adjusted figures will be published by the Hungarian Tax and Customs Administration (NAV) on its website by 31 October of the year preceding the year in question.

Reclaiming the excise tax

With the new change, a rail transit operator will be entitled to a claim a refund of the excise tax also on electricity, in addition to diesel oil.

The tax rebate for commercial diesel gas oil will be increased to the EU minimum level, i.e. the highest level that can be granted, and will automatically remain at that level even after valorisation.

Motor vehicle registration tax

Increase the tax rate following the inflation

An entirely new provision, already mentioned in case of the excise tax, is added to the law governing the motor vehicle registration tax, whereby the tax rate will be valorised in line with the change in inflation from 2024 onwards. In determining inflation, the Hungarian Tax and Customs Administration will compare the change in the consumer price index of the Central Statistical Office (KSH) for July of the year preceding the subject year with the consumer price index in July of the year before that, and on the basis of this it will publish the new tax rate on its website by 31 October of the year preceding the subject year.

Abolition of allowances and exemptions for hybrid vehicles

As a result of the amendment, the reduced or zero rate for hybrid and plug-in hybrid vehicles and the zero rate for hybrid motorcycles will be phased out from 1 January 2025 and will remain only for pure electric or zero emission vehicles.

Motor vehicle tax 

Tax rate increase adjusted for inflation

Similarly to other tax rates, the rate of the motor vehicle (road tax) will be also valorised in line with inflation from 2024 onwards. The new rules are the same as described above for the registration tax, so that when determining inflation, the Hungarian Tax and Customs Administration will compare the change in the consumer price index published by KSH for July of the year preceding the subject year with the consumer price index in July of the year before that, and on the basis of this it will publish the new tax rate on its website by 31 October of the year preceding the subject year. All vehicles subject to the tax (cars, lorries, tractors, buses, etc.) will be affected.

The same rule, i.e. the tax rate will be revalorised by inflation, has been introduced for vehicles registered abroad.

Under a transitional provision, the tax rates had to be published by NAV in this first year by 15 December 2024 (instead of 31 October 2024), which NAV has already done for both domestic and foreign motor vehicles.

Company car tax

 Tax rate increase for the year 2025

The monthly rates of company car tax increasing as follows from 1 January 2025:

(figures in HUF)
A B C D
1 Power (kW) for environmental classes “0” to “4” for environmental classes “6” to “10” for environmental classes “5” to “14-15”
2 0-50 37,000

(increased from 30,500)

 19,000

(increased from 16,000)

 17,000

(increased from 14,000)
3 51-90 49,000

(increased from 41,000)

 24,000

(increased from 20,000)

 19,000

(increased from 16,000)
4 91-120 73,000

(increased from 61,000)

 49,000

(increased from 41,000)

 24,000

(increased from 20,000)
5 Above 120 97,000

(increased from 81,000)

 73,000

(increased from 61,000)

 49,000

(instead of 41,000)

Tax rate increase adjusted for inflation

As described above, the company car tax rate will also change annually in line with inflation. The regulation itself is the same as for the motor vehicle tax, i.e the Hungarian Tax and Customs Administration will compare the change in the consumer price index published by KSH for July of the year preceding the subject year with the consumer price index in July of the year before that, and on the basis of this it will publish the new tax rate on its website by 31 October of the year preceding the subject year.

Additional temporary exemption for hybrid and plug-in hybrid vehicles

For vehicles in the environmental classes 5P and 5N, i.e. hybrid and plug-in hybrid vehicles, the exemption from the motor vehicle tax under the provisions of the law in force on 31 December 2024 and the exemption from the scope of the company car tax will be available until 31 December 2026, provided that the taxable person’s tax status or tax obligation arose on or before 1 January 2025.

Changes concerning property transfer tax

Adjustment of the rate of property transfer tax on the purchase of motor vehicles and trailers

As with many other taxes, after 2024, the rate of the property transfer tax due in case of the acquisition of a motor vehicle and trailer will be adjusted for inflation. The adjustment will take place in the same way as described above. Under the transitional provision, the new rates will also have to be published by the NAV for the first time by 15 December 2024 and by 31 October from 2025 onwards. The rates applicable from 2025 are available here.

Contributions to be paid by airlines

From 1 January 2025, the airline contribution will be phased out of the Hungarian tax system. The last date for taxpayers to report tax data will be December 2024, by the 5th day of the month following the month concerned, as previously. Consequently, the last payment of the tax is due for the month of December 2024, by the 20th day of the month following the subject month, in accordance with the rules previously in effect.

Advertising tax

The suspension of the obligation to pay advertising tax has been extended until 31 December 2025.

Retail sales tax

The scope of taxable persons is extended to include non-resident or resident platform operators who provide a marketplace for retail sellers. The taxable person for retail activities carried out through a platform is the platform operator, not the retailer.

For the purposes of the Retail Sales Tax Act, a platform is defined as any software (including websites and parts thereof) and application (including mobile applications) accessible to users that allows sellers to connect with other users for the purpose of directly or indirectly performing a relevant activity for users.

The annual taxable amount of the platform operator as a new taxable person is the revenue from the sales made through the platform by retailers selling through the platform. The platform operator therefore becomes a “quasi” vendor in respect of sales made through the platform. If the platform operator also carries out retail activities, its taxable amount is the sum of its taxable amounts determined with respect to the two activities.

The tax is determined on the basis of the combined amount of the receipts from retail sales abroad and domestically, but the tax determined on the basis of the revenue from abroad sales is reduced by the tax on the receipts received in respect of goods supplied abroad. In other words, no tax will continue to be payable on the proceeds of sales of goods transferred abroad.

The platform operator must comply with the notification obligation within 15 days of becoming a taxable person.

A taxable person who also sells through the platform, or any other person or entity that sells exclusively through the platform, must file a tax return even if not liable to pay tax.

If the platform operator fails to comply with the tax payment obligation and the tax debt cannot be recovered, the retailer is liable for the tax instead of the platform operator. In this case, the platform operator’s website will be rendered inaccessible by NAV.

Social contribution tax 

Social contribution tax on yields from a permanent investment contract

Starting from 1 January 2025, individuals established in Hungary will be required to pay social contribution tax on yields from long-term investment contracts governed by the Income Tax Act if the contract is concluded after 31 December 2024 and terminated before the three-year or five-year period ends. This payment is not subject to the tax ceiling. The rate of the social contribution tax is 13% before the end of the three-year period, 0% after five years, and 8% in other cases.

Reduction of the period for the application of the social contribution tax credit for labour market entrants

The emergency provisions in force from August 2024 will be transposed into law. Accordingly, the conditions for the social contribution tax credit to be claimed by the employer for a person entering the labour market are modified: the inactive period for which the credit is granted is increased from 6 to 9 months, the possibility of claiming the credit at 100% rate is reduced from 2 years to 1 year, and the rate for the subsequent 6 months is reduced to 50%.

Tax allowance for vocational education and dual training

Under the amendment, where an employer trains its own employees, the employer may claim the allowance for up to 12 months for the same employee, and it is subject to imposing an obligation on the employee to take an examination.

The rules of taxation

Application for a tax identification number by third-country nationals

The change in the legislation allows that in case of third-country national workers who do not have a tax identification number under the Act on the general rules for the entry and stay of third-country nationals, their employers may also request the Hungarian Tax and Customs Authority to issue one.

Final tax return of a group corporate taxpayer

The new rule for group corporate taxpayers is that they must file their final tax return within 90 days – instead of the previously applicable 30 days – from the date of termination.

Introduction of e-receipts

The amendment contains clarifications on the introduction of e-receipts for both the e-cash registers and customer applications.

Opening a payment account

Branch of foreign companies in Hungary will be added to the list of those obliged to open a payment account. As a transitional rule, branches already registered are required to open a domestic payment account until 31 January 2025.

The introduction of the data reconciliation procedure as a new tax authority procedure

In order to eliminate the risks identified, in addition to supporting procedures and audits, the tax authority may also conduct data reconciliation procedures. This procedure may be used by the tax authority to clarify any gaps or discrepancies in the data provided by the taxpayer.

The taxpayer is obliged to carry out the data reconciliation within 15 days of the date of service of the request, using the electronic interface provided for this purpose.

The new procedure is also accompanied by a new special default penalty of HUF 300,000 for taxpayers who fail to comply with the data reconciliation obligation.

Penalty for failure to comply with the procedure for clarifying the status of insured persons

If a taxpayer has not fulfilled the obligation to submit the ‘08 return for the employee or partner who is registered for that payer, the tax authority will first send a warning, and then may impose a default penalty of HUF 100,000, in addition to a further reminder letter.

Reduction of the grace period for cancellation of tax number in the event of failure to file returns

Instead of the current 180-day grace period, the tax authority will cancel the tax number of a taxpayer that fails to comply with the obligation to submit a summary statement on VAT, or to submit a monthly tax and contribution return or VAT return, 90 days after the warning.

Transposition into law of the increase in the amount of the default penalties

As of 1 January 2025, the increased default penalty items that were previously introduced by a government decree with attention to the emergency situation will be transposed into the Act on the rules of taxation. On the basis of the above, the upper limit of the general default penalty amounts will be increased, in line with the government decree in force from August 2024, from HUF 200,000 to HUF 400,000 for natural persons and from HUF 500,000 to HUF 1 million for non-natural persons. In addition, the maximum amount of the default penalty for the employment of undeclared workers and for infringements of the rules on the obligation to issue invoices, receipts and retain documents has been increased from HUF 1 million to HUF 2 million.

Late payment surcharge

From 1 January 2025, the late payment penalty will be applied without rounding. The tax authority will impose a late payment penalty if the annual amount of the penalty charged per month exceeds HUF 5,000. The tax authority will impose the late payment penalty for the months January to March 2025 in April 2025, and monthly thereafter.

Tax administration procedural rules

Hearings by way of electronic communications networks

By introducing a new legal instrument, the legislator would create the possibility for a person summoned for a personal hearing in tax administration proceedings to be heard by way of an electronic communications network. It must be ensured that the parties concerned can see and hear each other throughout the entire hearing. The minutes of the hearing need to be signed only by the representative of the tax authority, while on the taxpayer’s side, approval by oral declaration is sufficient. The minutes must then be served on the taxpayer without delay.

Examination of the transfer pricing documentation and data reporting during a compliance audit

Under the amendment, the tax authority is specifically entitled to examine, in the course of a compliance audit, the transfer pricing documentation and data reported. From 1 January 2025, instead of the current 30 days, the tax authority has 60 days to carry out a compliance audit of the transfer pricing documentation and transfer pricing data reported.

Expansion of the scope of decisions that can be appealed independently

The amendment expands the scope of first-instance decisions that can be appealed independently to include decisions on VAT refund claims by taxable persons established abroad.

New facts and circumstances in special VAT refund proceedings

The provision, often evoked in the context of appeals, concerning the introduction of new facts or evidence will not be applicable in special VAT refund proceedings. In other words, in such proceedings, taxpayers may rely on new facts or evidence in the appeal even if they were aware of the same before the first instance decision was taken – or, in the case of an audit, before the deadline for submitting observations had expired – but did not declare or submit them despite being requested to do so by the tax authority.

Enforcement rules

Additional grounds added as available for the suspension of enforcement proceedings

In accordance line with Section 52 of Act I of 2017 on the code of administrative court procedures, the amendment supplements the list of grounds for the suspension of enforcement proceedings.

Electronic communication with the employer in the event of an income garnishment

In the case of an electronic income garnishment (attachment of earnings), the provision obliges the employer to provide the tax authority with the information required by law using the form provided for this purpose.

Changes to the calculation of late payment penalty in enforcement proceedings

The provision unifies the rules for the calculation of the late payment penalty at the Hungarian Tax and Customs Administration by transposing the calculation method for tax debts to the calculation of public debts that are not tax debts. Thus, the rate of the late payment penalty for each calendar day of delay will be a 1/365th part of the base rate of the central bank at the time of the delay plus 5 percentage points, just as it is for tax debts.

Changes related to the Accounting Act

Increase in indicators affecting the obligation to prepare simplified annual accounts and consolidated annual accounts

The thresholds determining the obligation to prepare simplified annual accounts and consolidated annual accounts will increase as follows:

Value limits applicable to opting to prepare simplified annual accounts:

  1. a) the upper limit concerning the balance sheet total will be increased to HUF 2,000 million from HUF 1,200 million,
  2. the upper limit for the annual net turnover is increased from HUF 2,400 million to HUF 4,000 million. The criterion on the average number of employees in the business year (50) remains unchanged.

The limits for the obligation to prepare consolidated accounts are increased as follows:

  1. the balance sheet total is changed from HUF 6,000 million to HUF 10,000 million,
  2. the annual net turnover is changed from HUF 12,000 million to HUF 20,000 million. The criterion on the average number of employees in the business year (250) remains unchanged.

Increase in the limit for exemption from the audit requirement

The limit for exemption from the audit requirement is increased from HUF 300 million in annual net revenue to HUF 600 million. The criterion on the average number of employees in the business year (50) remains unchanged.

Selection of the auditor of the sustainability report

The amendment introduces a one-year transitional period by allowing for the financial year 2024 that the auditor or audit firm, which is a member of the Chamber, be elected by the executive body instead of the supreme body (such as the general meeting) in connection with the sustainability report or consolidated sustainability report, at the latest by the balance sheet date.

Severance tax (mining tax)

Introduction of banded severance tax rates

Banded severance tax rates will be introduced based on world market prices. In addition, lower rates will be set for certain extraction technologies, partly because of the higher cost requirements of the technology concerned and partly in order to maintain domestic extraction levels and thus reduce the import ratio.

Liquidation and compulsory dissolution procedures

Increase in the amount of debt required to initiate liquidation proceedings

The amendment raises the amount of the claim to be notified or the amount of the company’s assets needed to initiate liquidation proceedings, from HUF 400,000 to HUF 1,000,000. Below this limit, the court will remove the company from the register (by way of compulsory dissolution) if the conditions set out in the law are met, while the court will initiate liquidation proceedings for claims or assets reported in excess of HUF 1,000,000.

***

If you have any questions about the planned tax changes, the tax experts of Grant Thornton are ready to assist you and your company.

This summary is based on the information available at the date of its publication and is written for general information purposes only; therefore, it does not constitute or replace personalised tax advice in any respect.

NIS2: mentoring instead of outsourcing

With the entry into force of the Act on cybersecurity certification and cybersecurity supervision, the transposition of the new NIS2 (Network Information System v2) Directive of the EU into Hungarian law has started. These information security requirements cover a wider range of companies than ever before, with preliminary estimates suggesting 2,500-3,000 companies directly covered. Affected companies had until 30 June 2024 to register with the Supervisory Authority for Regulated Activities (SZFTH). However, in addition to providing administrative and technical company details, the identity and contact information of the chief information security officer (CISO) also had to be provided.

Companies established after 30 June 2024 have 30 days from the date of incorporation to register with the Supervisory Authority.

CISO: Who should be the responsible person?

One of the most important issues during the registration process is the designation of the chief information security officer. In our view, this is a difficult decision for companies with an international background even though the CyberCert Act does not contain any specific expectations or requirements regarding the CISO and explicitly allows for the possibility to fill the position even with the involvement of an external expert.

Outsourcing the work of the CISO is only a partial solution for companies with an international background

Outsourcing the tasks of the chief information security officer may at first sight seem a rational solution when the necessary expertise, experience or resources are not available in-house. However, our experience shows that many companies nevertheless register an information security officer from their internal staff on form of SZFTH.

Before we write about the reasons for this, let us consider the tasks and challenges a prospective internal CISO faces when preparing for a NIS2 audit in a Hungarian subsidiary with an international background.

What is the CISO responsible for?

The primary tasks of the CISO are:

  • reducing the risk of cybersecurity incidents, and
  • shortening the time needed to detect such incidents.

Cybersecurity incidents are typically aimed at acquiring a company’s data assets. The severity of incidents is compounded by the fact that in many cases the attempted data theft can result in a complete or partial service outage or even the suspension of business operations, which in all cases can have at least significant and sometimes catastrophic consequences for a company’s operations.

In addition to reducing the likelihood of cybersecurity incidents, reducing the harm they can cause is in fact a measure of a company’s defensibility and resilience, which can be increased by

  • introducing barriers,
  • establishing rules,
  • deploying tools, and
  • providing training.

The novelty of NIS2 lies in its requirement for affected companies to continuously enhance their cyber defence capabilities in line with these principles, while the legislation also seeks to establish a common standard at the EU level.

It is also important for the CISO to ensure that mandatory information security measures are designed in line with the threats and also fit within the available budget.

Cybersecurity measures inevitably slow down the business, and a large part of the company can be expected to actively cooperate in their implementation. The internal CISO needs to consider the business as a whole when thinking about responses to threats and when working with the local IT team, business area managers, legal professionals, the headquarters (abroad) or even the Supervisory Authority.

Hungarian NIS2 for Hungarian companies

Although NIS2 is an EU directive designed to establish a unified cybersecurity framework and level of protection, Member States are incorporating it into their national legislation at varying speeds and with content that is not entirely consistent.

The internal CISO of a Hungarian subsidiary should be familiar with the specificities of the “Hungarian” NIS2 rules, so that he/she can represent them, along with other domestic requirements, in the development and adaptation of a globally managed information security governance system and related policies and procedures.

The compliance of companies established in Hungary will always be assessed based on the Hungarian CyberCert Act, the implementing decrees, as well as the methodological guidelines issued by Hungarian institutions, and the audits will be conducted in Hungarian and by Hungarian auditors.

Thus, preparation in all cases requires the active involvement of the domestic operation and almost certainly cannot be managed solely from abroad using the policies and system elements developed by the headquarters in their unchanged form.

Despite being an obvious choice, it is not advisable to delegate a member of the IT team as compliance manager

In international corporate groups, CISOs face a rather complex set of responsibilities, so fully outsourcing their tasks may not always prove to be an effective solution.

For these companies, it may be advisable to expand the capabilities and resources of the local compliance officer to ensure they can also coordinate preparations for meeting the new compliance requirements set forth by the CyberCert Act. This can be achieved by involving external consultants and experts as needed.

A compliance manager’s local knowledge, existing channels and acceptance by the local IT team, the central IT management, the business areas and management are assets that will be needed during the implementation of the NIS2 information security management system, as it is likely to have a significant impact on most of the company’s current processes and will also shape the organisational culture.

IT will be a key player in the changes but, as in many other areas, will mainly remain in an implementing role, which makes it unfortunate to combine IT and information security management positions.

Professional mentoring can help compliance managers

NIS2 requires companies to continuously improve their cybersecurity capabilities. In doing so, they need to develop an information security system that can be operated effectively and audited robustly. To succeed, a trusted manager must have a good understanding not only of international and domestic rules, but also of the company’s internal processes and operations.

This makes it difficult to fully outsource NIS2 preparation tasks and may push companies towards developing internal competencies instead. Appropriate mentoring can help compliance managers to adapt to the new requirements.

We offer our NIS2 professional mentoring service to compliance officers who wish to become familiar with the NIS2 information security management system established by the Hungarian provisions of law, which will become a requirement from 2025. This service is also aimed at those seeking a supportive partner for covering the role of the chief information security officer with an internal staff member.

NIS2: The decree on the IT requirements of the CyberCert Act has been promulgated

On 24 June, the government decree containing the IT requirements of the Cybersecurity Certification and Cybersecurity Supervision Act entered into force. The promulgation of the implementing decree for the Act on cybersecurity certification and cybersecurity supervision (CyberCert Act) is a significant step for companies, prospective auditors and consultants alike.

 The 120-page document contains the precise requirements to start the preparation of the companies concerned and to plan their official cybersecurity audits starting in 2025.

Rules for a wide target group

The government decree provides a common list of requirements that should be applicable to all companies covered by the CyberCert Act, covering nearly 100 sectors of activity. This has resulted in a rather long, general but sufficiently detailed document.

The NIS2 applies to all companies that

  • employs more 50 persons, or
  • has an annual turnover of more than EUR 10 million, and
  • operates in one of the sectors considered critical from a strategical point of view.

Preliminary estimates suggest that around 2,500-3,000 businesses in Hungary could be directly impacted, with the potential for several times that number to be indirectly affected by this new provision.

The three chapters in the package

The decree sets out a risk management framework, a catalogue of measures and a catalogue of threats, which are to be implemented and applied by the companies affected by the legislation.

The risk management chapter contains the basic steps necessary to classify information systems and to monitor the implementation of the associated security measures. This chapter therefore means the regulation of the foundational measures. For companies that have not yet addressed information security risk management in depth, the chapter can also be seen as a form of help with that.

The risk management process will result in an inventory of the information systems used by the company and all the systems included will be classified in one of the security classes (basic, significant, high) set out in the decree. These three classes and the risk management framework itself in the decree have a number of similarities with existing international risk management standards, which will help to facilitate the transition between them.

A staggering number of security measures required

The classification will be used as the basis for the security measures to be introduced for systems, which will also be sought and tested in the mandatory audits. This includes more than 160 for the “basic”, more than 300 for the “significant,” and nearly 400 mandatory inspection and control points, as well as associated measures for the “high” security class. By comparison, the latest version of ISO 27001 Information Security Standard from 2022 only contains 93 control points.

In addition, some 530 additional security measures are also included in the decree, the use of which is not generally mandatory, but which companies may consider incorporating into their information security management systems, depending on their sector and activities.

To improve transparency, the security measures are grouped into 19 categories, such as: access control, training, systems monitoring, business continuity, incident management, supply chain security, etc.

For each category, the legislation not only requires adequate documentation and clear responsibilities of the companies concerned, but also organisational measures and adequate technological readiness in order to successfully pass the audits.

Mandatory but interchangeable

With specific cases in mind, the decree allows companies to derogate in certain cases from the rules set out in the catalogue of security measures issued. This may be the case, for example, where the technology used, the operating environment, the physical infrastructure or a public service does not allow certain measures to be put in place.

In special cases, the company may use its own substitute security measures, but in this case it must also document how the arrangements it uses are better than those in the decree. In addition, the company must ensure that the documentation is regularly reviewed, as circumstances may change over time. Substitute measures may only be implemented by companies at their own discretion and with written approval from the responsible manager.

Compliance can be painful

The promulgated decree also highlights that a significant proportion of companies covered by NIS2 will face serious challenges in complying with the legislation. For them, putting in place the mandatory security measures will require significant resources and, most importantly, considerable time, so it is advisable to start preparing as soon as possible in order to pass the first regulatory audit in 2025.

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