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On 9 May 2026, the newly elected Hungarian Parliament adopted Act XIV of 2026, which elevates several government decrees introduced during the state of danger declared due to the armed conflict in Ukraine to statutory level. The legislation specifically affects the economic and tax environment, as several measures previously applied on a temporary basis will remain in force and receive statutory regulation. Below, we highlight the most important tax-related provisions of the Act, without claiming completeness.
The Act stipulates that the rate of advertising tax will continue to be 0% for an indefinite period. By doing so, the legislator incorporates the emergency practice into the ordinary legal framework, meaning that businesses engaged in advertising activities will continue not to have to calculate with any in-year tax burden changes.
The legislation also elevates the rules regarding the surtax on energy suppliers to statutory level, while the provisions applicable to credit institutions and financial enterprises are likewise incorporated into the Act without substantive changes. These sectoral tax burdens will therefore not cease upon the termination of the state of danger but will remain in force as part of the ordinary legal framework.
The rules on the banking surtax and the government bond portfolio-related tax allowance remain unchanged
In this context, it is established that for the tax year beginning in 2026, the surtax payable by credit institutions and financial enterprises will remain two-tiered: a 10% tax rate applies to the part of the tax base not exceeding HUF 20 billion, while a 30% rate applies to the amount exceeding this threshold.
The legislator also confirms at statutory level the tax reduction opportunity linked to the increase in government bond holdings. The amount of the reduction may continue to equal 10% of the nominal increase, but no more than 30% of the annual surtax amount calculated before the reduction. The amendment clarifies that the nominal value of government bonds must be taken into account when calculating the daily average holding, which in practice represents the precise incorporation of the previous emergency decree regulation without substantive changes.
The surtax on energy suppliers and the tax treatment of transformations are now governed by statutory rules
The obligation to pay the surtax on energy suppliers has also been introduced at statutory level. Following the rules of the emergency government decrees, the provisions require energy suppliers as defined by the district heating services legislation to pay a 0.5% surtax for the tax year beginning in 2026 on the revenue from activities subject to corporate income tax as reported in the 2024 financial statements, capped at 50% of the 2024 corporate income tax base.
The regulation also sets out detailed rules for determining the tax base of companies affected by transformations. If an energy supplier was involved in a transformation, merger or demerger between 2024 and 2026, the surtax base must not be determined solely on the basis of its own 2024 revenue, but the relevant data of predecessor and successor entities must also be taken into account. Consistent with the previous emergency rules, this provision ensures that the tax base reflects the company’s actual economic performance regardless of organisational changes.
Filing deadlines and the long-term continuation of emergency rules continue to shape the tax environment
The Act also clearly defines the filing and payment deadlines. Energy suppliers must determine the surtax through self-assessment and are required to file and pay it on a separate form by the last day of the third month of the tax year beginning in 2026. If the taxpayer ceases to exist or otherwise falls outside the scope of the surtax before the deadline, the obligation must be fulfilled within 30 days following the termination or the exit from the scope of the surtax, provided that the original deadline has not yet expired. This regulation transfers the emergency decree practice into statutory law, ensuring the continuity and closure of obligations.
The newly adopted Act XIV of 2026 entered into force upon the termination of the state of danger on 14 May 2026 and does not merely reorganise surtaxes: several emergency measures affecting the economic environment will also remain in force at statutory level, which may continue to indirectly affect business operations. The detailed rules also include numerous minor amendments and specific provisions that collectively shape the tax environment for 2026.
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This newsletter has been prepared exclusively for general informational purposes based on information available on the date of publication and does not constitute personalised tax advice in any respect, nor does it replace such advice.
Key takeaways
- The absence of a Master file constitutes a standalone infringement.
- The penalty may reach HUF 5 million, and up to HUF 10 million in case of repeated non-compliance.
- The Hungarian Tax Authority (NAV) examines the existence of documentation at the very beginning of an audit.
- Group-level documentation prepared abroad does not replace Hungarian obligations.
- Compliance with Hungarian requirements is the responsibility of each taxpayer.
What does this mean in practice?
The Master file is one of the cornerstones of transfer pricing documentation, providing an overview of the group’s operations, business model, and transfer pricing policy. Its absence constitutes a breach of Hungarian regulations in itself, regardless of whether the applied prices meet the arm’s length principle.
During a NAV audit, the existence and quality of documentation are among the first areas reviewed. The absence of a Master file represents an immediate risk, as the authority cannot gain insight into the group’s operations and pricing logic. This situation may lead to further information requests and more in-depth investigations.
Penalties and compliance expectations
The consequences are direct and quantifiable. The penalty for the absence of a Master file may reach up to HUF 5 million, and in case of repeated infringement, up to HUF 10 million in the following year. The authority considers the level of cooperation and the circumstances of the case; however, the lack of documentation alone provides sufficient grounds for imposing a penalty.
A frequent question is whether documentation prepared in another jurisdiction at group level is sufficient to meet Hungarian requirements. Hungarian regulations clearly state that taxpayers must fulfill their obligations in accordance with local rules. Foreign documentation may serve as a useful basis, but it does not ensure compliance on its own. Local specifics and tax authority practice require particular attention.
In practice, this means that the Master file must be prepared on time and aligned with statutory requirements, while ensuring consistency with the local file. It is advisable to verify that group-level information is available with appropriate depth and format, and that the activities of the Hungarian entity and its related-party agreements are properly reflected. This reduces audit risk and ensures more predictable compliance in an increasingly strict tax environment.
Frequently asked questions
Can the Master file be replaced by group-level documentation prepared abroad?
Group-level documentation may provide a useful basis, but it is not sufficient on its own. Full compliance with Hungarian content and formal requirements must be ensured in all cases, including necessary local additions.
When must the Master file be available?
In the case of a foreign parent company, the deadline for preparing documentation equivalent to the Master file is the end of the 12th month following the taxpayer’s financial year.
How to move forward?
The existence and quality of the Master file have a direct impact on the outcome of a tax audit. It is advisable to review whether the current documentation complies with requirements and to address any gaps in a timely manner.
If you are uncertain whether your group-level documentation is sufficient or would like to reduce audit risks, our experts are ready to support you in reviewing and preparing your documentation.
While at the European level it is becoming increasingly clear that the management of ESG risks is becoming a fundamental element of banking operations, in Hungary the expectations that will enforce this in practice are also becoming more concrete.
MNB Recommendation 2/2026 (III.6.) and the related amendments to the Credit Institutions Act (Hpt.) represent this step change: ESG considerations are now directly linked to prudential operations, risk management and capital adequacy processes.
- MNB Recommendation 2/2026 (III.6.) and the amendments to the Hpt. make ESG risk management a direct part of prudential banking operations in Hungary.
- ESG is no longer a separate compliance area: it must be integrated into strategic planning, risk appetite, ICAAP/ILAAP processes and decision-making.
- Institutions must establish a concrete ESG risk management plan with clear timelines, milestones and at least a 10-year horizon.
- Management responsibility, the operation of the three lines of defence, and forward-looking analyses based on data all play a key role in supervisory compliance.
- The local adaptation of group-level ESG frameworks may present a particular challenge, while structured adaptation can also strengthen business stability.
Not a separate area, but core operations
One of the most important messages of Hungarian regulation is that ESG risks should not be treated as a separate field. The expectation is that these risks should appear as part of existing frameworks.
This becomes particularly tangible in the following areas:
- strategic and business planning;
- risk appetite and limit systems;
- ICAAP/ILAAP processes;
- as well as portfolio and product decisions.
The emphasis is therefore not on creating new processes, but on extending existing ones with ESG considerations.
What exactly does the MNB expect?
Only a few months are available between the final MNB recommendation and its application. This creates a particular challenge for institutions that do not yet have a transition plan in place, while banks with international backgrounds may have an advantage in this regard.
The MNB recommendation applies to a wide range of institutions falling under the Hpt., including credit institutions, Hungarian branches of foreign banks and certain investment firms.
The recommendation defines in detail the framework for managing ESG risks: institutions must be capable of identifying, measuring, managing and continuously monitoring these risks.
The principle of proportionality continues to apply; however, this does not mean exemption. The difference lies in the depth and complexity of implementation, not in the necessity of meeting expectations.
The central role of planning
Based on Section 109 (2a) of the Hpt., institutions must develop their plan for managing ESG risks. This plan will form one of the foundations of operations in the future.
According to supervisory expectations, the plan must clearly include:
- the timeline for managing ESG risks;
- the related milestones and target values;
- as well as their connection to business strategy and the risk management framework.
A key consideration is the long-term approach: ESG risks must be interpreted not only in the short and medium term, but also over at least a 10-year horizon.
Management responsibility and governance
The management of ESG risks is clearly a leadership-level responsibility. The supervisor expects decision-making, execution and control processes to be clearly separated and documented.
The operation of the three lines of defence is also crucial in this area:
- the role of business areas in client relationships and risk identification;
- the integrating role of risk management functions;
- as well as the independent assessment of internal audit.
In practice, from a supervisory perspective, it will be decisive whether the ESG framework is supported by genuine management oversight and consistent operation.
Forward-looking approach and data requirements
The management of ESG risks increasingly requires a forward-looking approach. Scenario analyses, vulnerability assessments and long-term impact assessments are becoming defining tools.
At the same time, the role of data management is also increasing in importance. Institutions must ensure that the necessary data are available for planning and monitoring.
Supervisory expectations, however, do not point toward a perfect data environment, but toward transparent and controlled operations.
This includes:
- identifying data gaps;
- documenting assumptions;
- as well as monitoring risks and objectives through appropriate indicators.
Focus areas in 2026
Based on the current regulatory environment, several areas require particular attention from institutions:
- harmonising the ESG risk management framework and clarifying internal definitions,
- closely linking planning processes to prudential operations,
- strengthening decision-making processes,
- establishing data management and methodological frameworks,
- as well as integrating forward-looking analyses into business decisions.
Following European-level expectations, Hungarian regulation clearly defines the framework for practical implementation. ESG risk management is therefore no longer present only at guideline level, but as part of everyday banking operations.
A challenge may arise in determining to what extent an available group-level transition plan can and should be localised (for example, this may also create issues in risk management where this is designed at group level).
Institutions that implement this integration in a timely and structured manner may achieve not only regulatory compliance, but also a more stable business position.
A new era began in early 2026 in ESG risk management for the European banking sector. The updated guidelines of the European Banking Authority (EBA) make it clear: ESG is no longer a supplementary consideration, but a fundamental element of banking operations. Institutions that delay may face not only compliance risks, but also strategic and financial risks.
The new regulation is mandatory for significant institutions from 11 January 2026, while smaller, non-complex institutions (Non-Complex Institutions – SNCIs) must comply with the requirements by early 2027 at the latest.
- ESG has become a core requirement of banking operations: the European Banking Authority (EBA) guidelines mandate full integration from 2026.
- Compliance is not just a regulatory issue: delays also pose strategic and financial risks for institutions.
- ESG risks must be fully embedded into strategy, risk management, and decision-making processes.
- Banks that act early can build a competitive advantage, while laggards may face lasting disadvantages.
What does this mean in practice?
According to the expectations of the EBA and the European Central Bank (ECB), ESG risks must be fully integrated into banks’ operations:
- ESG aspects must be reflected in strategy and business models;
- ICAAP/ILAAP processes, risk appetite and internal controls must be reviewed;
- forward-looking, short- and long-term scenario analyses become mandatory.
The regulatory approach is clear: the principle of proportionality does not mean exemption. Every institution is expected to maintain effective control over ESG risks.
The MNB recommendation distinguishes between required and best practice levels of implementation. For the required elements (which must be implemented), consequences defined in the relevant legal provisions apply if implementation is missing or inadequate.
The new role of scenario analysis: from compliance to strategic tool
The assessment of ESG risks is no longer limited to theoretical models. Banks must quantify impacts:
- in short-term stress tests (capital and liquidity);
- in climate and nature-related risk analyses with a minimum 10-year horizon;
- in dynamic balance sheet models that take into account transition pathways and changes in client behaviour.
ESG risks affect all traditional risk categories – from credit risk to operational risks – therefore scenario analysis has become a key tool for long-term resilience.
Double materiality: risk management on new foundations
Supervisory expectations require banks to go beyond climate risks and integrate the full spectrum of ESG into their operations.
A central element of this is the principle of double materiality, which:
- requires regular (at least annual) materiality assessments;
- demands deeper understanding of client and sector exposures;
- presupposes data-driven risk assessment and reporting.
This approach provides a more accurate picture of financial exposures and strategic vulnerabilities, while also requiring new capabilities and operating models.
The biggest challenge: data and processes
Experience shows that many institutions are not yet fully prepared. However, from a supervisory perspective, this is no longer an acceptable justification.
Banks are expected, among others, to:
- improve data quality and eliminate data gaps;
- define clear responsibilities for ESG risk management;
- integrate ESG into lending processes, onboarding and monitoring;
- establish transparent reporting structures and KPI/KRI systems.
Supervisors will actively assess whether institutions are truly capable of managing these risks.
There is a tight deadline of approximately four months between the publication and application of the final MNB recommendation (except for the transition plan, which has a deadline of 1 January 2027). The new recommendation has a strong risk management focus and is geared towards preparing transition plans. Institutions whose parent banks already have such plans will find it easier to meet the expected deadlines.
Why act now?
The message is clear: institutions that invest in a robust ESG framework in time:
- reduce supervisory risks;
- strengthen their strategic position;
- and build a competitive advantage in a rapidly changing market.
Delay, on the other hand, may result not only in compliance issues, but also in business disadvantages in an environment where regulators, clients and investors are raising their expectations.
The Government Decree No. 87/2026 (IV. 23.), published on the evening of 23 April, once again amends the application of the advertising tax and, with reference to the state of danger due to the Russian–Ukrainian war, would maintain the current 0% rate of the advertising tax even after 1 July 2026.
The purpose of the Decree is to ensure that businesses do not face additional burdens resulting from the reintroduction of the advertising tax, in particular due to the prolonged economic effects of the war. However, it is important to note that the application of the favourable tax rate is expressly linked to the existence of the state of danger, meaning that the 0% advertising tax rate will remain in force only as long as the state of danger is in effect.
Based on Government Decree No. 424/2022 (X. 28.) declaring the state of danger, the current state of danger will cease on 14 May 2026. This means that, unless a further extension or legislative amendment takes place, the advertising tax would still return from 1 July 2026, which could result in a significant additional burden for the affected taxpayers.
As a number of currently effective legal measures (e.g. food price caps, regulated fuel prices) are linked to the state of danger, it is likely that it will be extended; however, the exact details are not yet known. It is conceivable that a concrete decision on the extension (both its fact and duration) will only be taken in early May, following the establishment of the new Parliament. In the coming period, it is therefore advisable to closely monitor any potential extension of the state of danger or amendments to the advertising tax legislation, as these will determine whether the advertising tax will in fact be reintroduced in mid-2026.
Should the above raise your interest, the experts of Grant Thornton are at your and your company’s disposal.
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This newsletter has been prepared based on information available on the date of publication and is intended for general information purposes only; it does not constitute personalised tax advice in any respect and does not replace such advice.
Advertising Tax returns in 2026
After a seven-year suspension, the advertising tax will re-enter into force in Hungary from 1 July 2026. According to our latest analysis, the return of the regulation imposes critical administrative obligations on both advertisers and publishers. As the tax is reintroduced during the tax year, companies must already prepare their internal processes and contractual frameworks in the spring in order to avoid significant default penalties and the risk of double taxation.
- The advertising tax will re-enter into force from 1 July 2026, and due to its mid-year return, companies must prepare their processes already in the spring.
- The tax affects not only publishers but, in certain cases, also advertisers, especially where declaration management is insufficient.
- The key to compliance is the timely review of contracts, internal controls and administrative processes in order to minimise penalty risks.
- The reintroduction of the advertising tax is not merely a technical tax issue: it will also affect the operation of the media market, advertisers and advertising agencies.
Historical background of the advertising tax – disputes, legal proceedings, suspension
The suspension of the advertising tax began on 1 July 2019, after the European Commission classified certain elements of the regulation as unlawful state aid. The legal dispute ultimately confirmed the Hungarian position: in 2021, the Court of Justice of the European Union also ruled that the Hungarian advertising tax is in line with EU law. Nevertheless, the government extended the suspension year by year.
However, the autumn tax package of 2025 marked a turning point: the suspension was extended by only half a year, effectively signalling that from 1 July 2026 the advertising tax and all related administrative obligations will return.
Who is subject to the tax? Both publishers and advertisers are affected
Under the current regulation, the suspension expires on 30 June 2026, and from 1 July 2026 the advertising tax will again become applicable. The return therefore takes place mid-year, which always creates additional administrative burden for businesses, as internal processes must be established during the year.
The advertising tax defines two main categories of taxpayers:
Publishers of advertisements: media service providers, publishers of press products, operators of outdoor advertising media and Hungarian-language online platforms.
Advertisers: they become taxpayers if their monthly advertising expenditure exceeds HUF 2.5 million and they do not possess a declaration from the publisher confirming that the tax has been paid.
The absence of the declaration does not automatically result in a tax liability; the advertiser does not become a taxpayer if
- the publisher is included in the register published on the website of the Hungarian tax authority (NAV),
- or if the advertiser can prove that it has requested the declaration, has not received it within 10 working days, and has reported this fact to the NAV.
What qualifies as advertising tax-liable activity?
The advertising tax applies exclusively to advertising publication for consideration; own-purpose advertising is not subject to tax. The regulation covers a wide range of appearances, from television and radio advertisements through press products and outdoor surfaces to advertisements displayed on vehicles, real estate, printed materials and online platforms.
Tax base and rate of the advertising tax
For publishers, the tax base is the annual net revenue derived from advertising publication.
For publishers, the tax rate is uniformly 7.5%, while the first HUF 100 million of the tax base is tax-exempt. This exemption qualifies as de minimis aid, which must be recorded and taken into account by the company in accordance with the relevant EU rules. The HUF 100 million threshold may fully exempt a significant proportion of smaller media companies from taxation, while for larger players it results in a meaningful tax burden.
It is important that where the publisher operates through a related-party advertising sales agency, special rules must be applied when determining the tax base.
If advertisers cannot rely on any exemption (publisher declaration, publisher listed on NAV website, notification of missing declaration to the NAV), the tax liability arises when monthly advertising expenditure exceeds HUF 2.5 million. A 5% tax must be paid on the portion exceeding the HUF 2.5 million threshold. When determining the advertiser’s tax base, there is no annual proportionality, meaning that in the months following 1 July 2026 the full monthly expenditure must be considered. This rule may create additional burden particularly for companies carrying out high-volume, campaign-based advertising spending.
Publishers are required to declare and pay the advertising tax annually, by the last day of the fifth month following the tax year (for calendar-year taxpayers, this is 31 May). In addition, they must pay tax advances twice (for calendar-year taxpayers: 20 July and 20 October), and the obligation to top up advances remains in place by the 20th day of the last month of the tax year (for calendar-year taxpayers, December). The difference between advances paid and the annual tax must be settled together with the annual return.
Advertisers, by contrast, are subject to monthly filing obligations: the return must be submitted and the tax paid by the 20th day of the month following the reporting period (this practically coincides with the deadline for monthly VAT returns). This more frequent filing obligation may impose a significant administrative burden on companies handling a large number of advertising invoices or working with multiple publishers.
Changes in penalty rules – more lenient, but still strict
The penalty rules related to the advertising tax have undergone significant changes in recent years, partly following the judgment of the Court of Justice of the European Union in case C-482/18 (Google Ireland). The previous sanctions, which could reach up to HUF 1 billion, were considered disproportionate, particularly for foreign service providers, therefore the legislator introduced a gradual, multi-stage penalty system. The essence of the new regulation is that default penalties should only be applied as a last resort and must in all cases be preceded by a call from the tax authority.
Publishers not yet registered with the NAV must register within 30 days of commencing advertising publication activities using the appropriate form. If they fail to comply, the tax authority first issues a notice with a 15-day deadline. If the notice remains ineffective, the NAV may impose a default penalty of up to HUF 10 million, followed by repeated notices. Each further failure may result in an additional penalty of up to HUF 10 million. An important mitigation is that if the taxpayer complies upon notice, the most recent penalty must be waived and earlier penalties may be reduced.
In case of failure to provide the declaration, a similar logic applies, but with different penalty amounts. If the publisher fails to provide the advertising tax declaration to the advertiser, the NAV first calls for its completion and warns that a penalty of HUF 500,000 will be imposed in case of non-compliance. If the obligation is repeatedly not fulfilled for the same advertiser and not remedied within the deadline set by the NAV, the penalty increases to HUF 10 million, which doubles with each further missed deadline. Here too, fairness applies: if the taxpayer complies, the most recent penalty is waived and earlier penalties may be reduced.
If the filing obligation is not fulfilled, the consequence differs: the NAV does not impose a penalty initially but initiates a tax audit and determines the tax by estimation. This may be particularly disadvantageous, as the tax authority determines the tax base and payable tax based on available information, typically using a conservative approach.
Overall, the new penalty regime is more lenient and proportionate than the previous system, but it still poses a significant risk for those who do not pay sufficient attention to registration, declaration and filing obligations. With the return of the advertising tax, it is therefore particularly important to review declaration management processes, contractual documentation and the administration of advertising expenditures.
Practical steps in spring 2026
Due to the return of the advertising tax on 1 July 2026, companies should begin preparations already in the spring period, particularly because the tax enters into force mid-year, which always entails additional administrative burden and interpretational issues.
Review of contracts: companies should review advertising expenditures, contracts with advertising agencies and media partners, as well as internal processes for requesting and managing declarations. The advertiser’s tax liability arises only in the absence of a valid declaration from the publisher, therefore proper declaration management is critical.
Separation of complex services: particular attention should be paid to complex services that may include multiple elements (e.g. creative services, media buying, production, consulting). Companies must determine which parts qualify as advertising publication and which do not fall under the scope of the advertising tax. The separation must be properly documented, as the NAV may examine whether the tax base has been determined lawfully during an audit.
Establishment of internal controls: companies should review their administrative processes: who requests declarations, who verifies their existence, how advertising invoices are recorded, and what internal controls ensure that advertiser tax liability does not remain hidden. The return of the advertising tax may require the designation of responsibilities and the formalisation of processes.
The return of the advertising tax imposes a significant administrative burden on market participants, but timely preparation can minimise financial and legal risks. Should the above raise your interest, the prepared experts of Grant Thornton are at your and your company’s disposal.
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This newsletter has been prepared based on information available on the date of publication and is intended for general information purposes only; it does not constitute personalised tax advice in any respect and does not replace such advice.
What tasks remain for the 2025 tax year?
The first three months of 2026 have already flown by, and with this the period of closing the previous year from a tax perspective has arrived. This process is the first and perhaps most important step in publishing the annual report. In this newsletter, we review the most important tax obligations related to the year 2025 and the taxpayer tasks associated with them.
The goal of year-end closing remains unchanged: to ensure that the company’s financial and tax data are organized, reconciled, and in a condition suitable for preparing the financial statements.
Tax account
The first step of the year-end closing process is reviewing the tax account, as the records of the National Tax and Customs Administration (NAV) provide the starting point to which the accounting data must be aligned. During the beginning-of-year reconciliation, it is advisable to review payments, overpayments, and any outstanding amounts, and initiate settlement or transfer as needed. Ensuring an accurate tax account status allows later tax returns and the financial statements to be in harmony with the authority’s records.
Local business tax (HIPA)
Preparing the HIPA return is one of the defining tasks of every year-end closing. In 2026, the return must again be filed through the NAV using the form valid for the year in question.
Businesses must review whether any changes occurred during 2025—such as establishing a new site, expanding activities, or changes in headcount—that affect the allocation of the tax base. For companies operating in multiple municipalities, applying the allocation method correctly is particularly important, as it directly influences the amount of tax payable. Before submitting the return, it is also worth checking for any outstanding debts owed to local tax authorities.
Corporate income tax and small business tax (TAO and KIVA)
When preparing the corporate income tax return, businesses must review the economic events of 2025 and determine the tax base increasing and decreasing items. These include, among others, forming or using development reserves, accounting for depreciation, and examining available tax allowances.
For companies subject to KIVA, year-end closing requires determining the cash-flow-based tax base, assessing the impact of wage costs and dividend payments, and checking whether the eligibility criteria for KIVA remain met. This includes verifying that the company did not exceed the thresholds associated with KIVA exclusion (such as average statistical headcount, revenue limits, or thresholds calculated together with related companies). If the company no longer meets the conditions for choosing KIVA, the tasks related to the termination of tax status must be performed.
Transfer pricing
For related parties, preparing transfer pricing documentation and the related data reporting is now an integral part of the corporate income tax return, meaning that substantiating related-party transactions requires special attention.
At the end of 2025, the first step is identifying related parties and the relevant transactions, as these form the basis of transfer pricing obligations. Next, previously applied benchmarks must be reviewed to ensure that the prices and profitability ratios used in the transactions fall within the arm’s-length range. If discrepancies arise, it becomes necessary to assess whether year-end transfer pricing adjustments are required and, if needed, correct the result.
To meet documentation requirements, it must be evaluated whether the taxpayer is subject to Local File, Master File, or CbCR reporting obligations, taking into account statutory thresholds and the new regulations entering into force in 2026. It must also be ensured that the ATP data reporting in the corporate income tax return is fully aligned with the transfer pricing documentation, particularly regarding transaction values, methodological justification, and segmentation.
Finally, as part of the year-end closing, it is advisable to prepare for the new transfer pricing requirements applicable from 2026, particularly the more detailed content requirements, increased documentation thresholds, and stricter data reporting obligations.
Reviewing tax incentives and grants
During the closing of the 2025 tax year, it is advisable to review the tax incentives, grants, and development tax allowances used by the company, paying special attention to meeting eligibility criteria. Reviewing the documentation, records, and deadlines associated with the incentives is essential to avoid potential subsequent tax authority findings. Reviewing indicators, headcount requirements, and investment obligations related to grants is also an important part of the process. Properly documented and substantiated incentives can result in significant tax savings, making their careful review particularly important.
Tax planning and strategic decisions for the upcoming year
Year-end closing is not only an administrative task but also a strategic opportunity to lay the foundations for tax planning for the coming year. Companies should review planned investments, financing decisions, corporate structure changes, and their tax implications. Choosing among different tax regimes (e.g., corporate tax, small business tax), planning development reserves, or optimizing the use of incentives can all contribute to effectively shaping the company’s tax burden. Thoughtful tax planning helps ensure that businesses operate in a stable and predictable tax environment in the following year.
Invoicing compliance and NAV Online Invoice
Reviewing invoicing processes is an essential part of year-end closing in 2026 as well. The NAV Online Invoice system continuously monitors submitted data, so businesses must ensure that the invoicing software properly transmits data and that invoices include all mandatory elements.
At the start of the year, it is worth reviewing incorrect or incomplete data submissions and correcting them if necessary. It is also advisable to compare the revenue calculated from invoices reported to NAV for 2025 with the actual revenue recorded in the accounting, and identify the causes of any discrepancies. These discrepancies often stem from technical errors, missing data submissions, or incorrect invoicing practices, making timely identification crucial for compliance.
Global minimum tax (GloBE)
Under the Hungarian global minimum tax framework, no filing obligation arises for 2025; however, it is already advisable to begin estimating the potential tax amount. This is especially important because if minimum tax becomes payable for the 2025 tax year, it must be accounted for in the 2025 financial statements, regardless of the later timing of filing and prepayment obligations.
The first global minimum tax return for the 2024 tax year is due in summer 2026, so businesses should begin preparations in time. This includes reviewing previous preliminary calculations, finalizing the necessary computations, and checking that all relevant data are available for the filing. It is particularly important to review whether the necessary information is available internally or must be obtained from other group members or foreign subsidiaries. Proper preparation ensures that the corporate group can fulfill its filing obligations efficiently, without delays or subsequent corrections.
Summary
Closing the year 2025 is a comprehensive task affecting the company’s tax, accounting, and administrative processes alike. Accurate tax account reconciliation, preparing HIPA, TAO, or KIVA returns, fulfilling transfer pricing obligations, ensuring invoicing compliance, and carefully performing the accounting close all contribute to ensuring that the financial statements are reliable and compliant with regulations. This period also provides an opportunity for companies to review their processes and, if necessary, improve them for more efficient operations in the coming year.
If the above has raised your interest or if you need support in calculating annual taxes, preparing transfer pricing documentation, or ensuring your invoicing processes are in order, the prepared experts of Grant Thornton stand ready to assist you and your company.
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This newsletter was prepared solely for general informational purposes based on information available on the day of publication and does not constitute personalized tax advice, nor does it replace such advice.