The government’s 2027 budget package could bring significant changes to business taxation. Following Prime Minister Péter Magyar’s announcement on 19 October, he presented the package in greater detail together with Finance Minister András Kármán on 20 October. In addition to higher corporate income tax burdens for large companies, changes to sector-specific special taxes and planned increases in advertising tax and company car tax, employee tax reliefs and investment programmes could also change. We have summarised what the announcements could mean for companies.

The government forecasts economic growth of 2.4% and a budget deficit of 4.9% of GDP for 2027, following the revised deficit of 7.5% for 2026. According to András Kármán, reviewing expenditure and reducing funding previously used inefficiently could generate savings of HUF 1,465 billion. Higher taxation of large companies is also part of the fiscal adjustment. These are government forecasts, the realisation of which depends on economic developments and the final measures.

Some of the announcements still concern planned measures: the exact tax rates, eligibility requirements and transitional provisions remain unknown in several areas. However, the information provided on 20 October clarified a number of previous uncertainties, making it advisable for companies to update their financial plans for 2027.

Corporate income tax and innovation contribution: large companies could face higher burdens

The government plans to increase corporate income tax for large companies. According to the information provided on 20 October, the change would affect companies with an enterprise value exceeding HUF 500 billion. This is a significant clarification compared with the earlier information referring to a revenue threshold of HUF 180 billion: enterprise value and revenue are different metrics. The proposed new tax rate and the rules for determining enterprise value have not yet been announced.

Earlier announcements projected combined additional revenue of approximately HUF 250 billion from changes to corporate income tax and the innovation contribution. However, the information provided on 20 October did not clarify the detailed rules for the innovation contribution, so no firm conclusions can yet be drawn about its expected rate or the entities affected.

What could this mean for businesses?

For large companies, higher tax burdens could directly affect profit after tax, returns on investment and financial planning within corporate groups. Changes to the innovation contribution could be particularly relevant to companies undertaking research and development and technology investments.

Companies should prepare different tax scenarios and review the expected development of tax reliefs. Particular attention should be paid to the announced abolition of the corporate income tax relief scheme for sports purposes, which the government would replace with a new, more direct support system. The timetable for abolition and any transitional rules remain to be clarified.

Sector-specific special taxes: financial and energy companies could be expected to make a larger contribution

The government also expects banks, insurers, energy companies and retail chains to make a greater contribution to the budget. For the energy sector, the planned additional revenue is approximately HUF 100 billion, while an increase in the mining royalty could generate a further HUF 37 billion.

On 20 October, András Kármán confirmed that certain categories of sector-specific special taxes would change, while the current fiscal situation does not allow tax cuts affecting a broad range of large companies. The specific rates, tax bases and details of the entities affected remain unknown.

What could this mean for businesses?

For companies operating in the affected sectors, higher tax burdens could reduce the funds available for investment and development. The indirect effects of the changes could also emerge in relationships with suppliers and business partners, for example through changes in service fees or procurement costs.

Modelling the expected tax burdens and assessing the extent to which additional costs can be incorporated into business plans will be particularly important.

Advertising tax could return: the digital advertising market could also be affected

According to the announcements, the current zero rate of advertising tax could be discontinued. The government expects the measure to generate approximately HUF 14 billion in additional revenue and has stated that it aims to increase the taxation of major international digital platforms, including Google and Meta.

It is not yet clear exactly which entities the new rules would cover or how they would ensure that foreign digital service providers meet their tax obligations.

What could this mean for businesses?

Changes to advertising tax could directly affect media companies and companies selling advertising. However, advertisers could also experience indirect effects if service providers pass on some or all of the additional burdens through their prices.

Businesses with significant advertising expenditure should therefore monitor regulatory developments, particularly when planning their digital marketing budgets.

Company car tax: operating corporate fleets could become even more expensive

The government also plans to increase company car tax, from which it expects approximately HUF 30 billion in additional revenue. The specific tax rates and the details of any differentiation remain unknown.

What could this mean for businesses?

The change could primarily result in higher operating costs for companies maintaining substantial vehicle fleets. Trading, logistics and service companies whose operations rely heavily on company vehicles could be particularly affected.

The planned increase could warrant recalculating fleet costs and reviewing vehicle purchase and leasing arrangements.

Personal income tax: employers should also prepare for changes

Under the government’s plans, the personal income tax rate applicable to the minimum wage will decrease from 15% to 9% from 2027. According to the information provided by András Kármán on 20 October, this could mean annual tax savings of approximately HUF 240,000 for employees earning the minimum wage. The detailed rules for calculating and applying the relief remain unknown.

Existing personal income tax reliefs would largely remain in place, but the tax exemption for mothers would be subject to a gross monthly income limit of HUF 1 million. According to the announcement, the relief for mothers with two children will not be extended to those over the age of 40. Until the precise eligibility and payroll rules are published, employers should prepare for several possible implementation scenarios.

What could this mean for businesses?

A change in personal income tax does not necessarily reduce employers’ direct wage costs in itself, but it could increase the net income of the employees concerned.

Employers need to prepare to modify their payroll systems, apply the reliefs correctly and inform employees. The changes could also play a role in salary negotiations and the planning of employee benefit schemes.

KATA and wealth tax: different objectives, different effects on businesses

According to the finance minister, no additional revenue is expected in 2027 from changes to the rules of KATA, the flat-rate tax for small taxpayers; the aim is to increase the number of those choosing this form of taxation by more than 100,000. This could be relevant to smaller businesses and sole traders, although the eligibility requirements remain unknown. The announced wealth tax is expected to generate annual revenue of HUF 200 billion; any direct and indirect consequences for businesses can be assessed once the detailed rules are known.

Business development and investment: new opportunities are also taking shape

The government plans to stimulate investment partly through housing and infrastructure programmes. According to the information provided on the 2027 budget, the Wekerle Plusz housing scheme would replace Otthon Start, while the Wekerle Felújítási Támogatás renovation grant would help expand the supply of new homes and support first-time home ownership. The specific conditions of the programmes remain unknown.

The planned developments could generate additional demand for construction, property development and related services. The government referred to more than HUF 3,500 billion in railway development under the ten-year Baross Gábor Plan, electricity grid development worth HUF 100 billion financed from EU funds in 2027, and HUF 221 billion in spending on water management and environmental protection. These programmes could offer potential business opportunities, but budget allocations do not automatically translate into contracts and funding opportunities available to businesses.

The detailed conditions of the housing, renovation and infrastructure development schemes, procurement schedules and available funding require further clarification. The government also announced the phase-out of the profit margin cap, which could affect pricing and business planning among retailers.

What should companies prepare for now?

Based on the announced measures, the tax and operating environment for businesses could change in several areas in 2027. The expected effects could vary significantly by sector and company size.

The following could be particularly important in the period ahead:

• Preliminary modelling of tax burdens for 2027, with particular attention to corporate income tax, the innovation contribution and sector-specific special taxes.
• Reviewing corporate budgets, including fleet costs, marketing expenditure and payroll processes.
• Reassessing investment and financing decisions, taking into account expected tax changes and new funding opportunities.
• Monitoring the legislative process and the budget bill, with particular attention to the enterprise-value-based threshold for corporate income tax on large companies, the phase-out of corporate income tax reliefs for sports purposes and the detailed rules for employee tax reliefs.

One of the most important tasks for businesses in the coming weeks will be to assess the direct and indirect effects the planned measures could have on their operations. However, effective preparation requires an understanding of the detailed rules and an assessment tailored to each company.

Our experts continuously monitor tax changes related to the 2027 budget and the detailed rules as they are published, analyse their potential effects on businesses, and regularly inform our clients about the most important developments and the steps needed to prepare.