On 19 November 2025, Act LXXXIII of 2025 on amendments to certain tax laws aimed at reducing administrative burdens and ensuring legal harmonisation was published in the Hungarian Gazette, followed on 21 November 2025 by Act LXXXIV of 2025 on measures to reduce the tax burden of businesses (hereinafter together: the “Tax Package”). The amendments introduced by the Tax Package affect several types of taxes; in this newsletter we summarise the most important changes.

Personal income tax

The changes in personal income taxation focus on simplifying the application of family allowances and on the treatment of losses related to crypto assets.

The Tax Package allows mothers to indicate in their tax advance declaration for which dependants they wish to claim the allowances. The employer will automatically treat this declaration as a continuing tax advance declaration. This is particularly beneficial for those raising several children, as they will no longer have to submit a new declaration every year if their entitlement does not change.

A significant relief will apply to transactions involving crypto assets, as the possibility of tax equalisation will be extended: losses from such transactions will no longer only be available for set-off in the two tax years following their occurrence but may be used without any time limitation. This favourable rule may already be applied in the tax return for the 2025 tax year. Taxpayers must continue to keep records of their losses and must indicate these as information data in their tax return.

The cost ratio of private entrepreneurs, subject to flat-rate taxation under the Hungarian Personal Income Tax Act, will increase from the current 40% to 45% in 2026 and to 50% in 2027.

Between 1 December 2025 and 30 April 2026, the SZÉP card (acronym for Széchenyi Pihenő Kártya, “Széchenyi Leisure Card”) may also be used for the purchase of foodstuffs specified in a separate Government Decree.

Reflecting a crime type that has unfortunately become increasingly common in recent years, from 2026 the Tax Package exempts from tax the compensation received by a client who has fallen victim to bank phishing and is indemnified by the financial institution with which s/he has a contractual relationship. The tax exemption is independent of the legal title under which the compensation is paid, meaning that the benefit granted to the client is entirely tax-free.

Corporate income tax

According to the amendments in corporate income tax, in the case of subsidies for the renovation of sports-related real estate, a mortgage in favour of the State must be registered on the property for investments of at least HUF 5 million.

The free transfer of assets implemented from the subsidy will only be possible if their book value is zero. In the case of a transfer for consideration, the price may not be lower than the market value or the book value. If the asset is disposed of before the end of the maintenance period, the purchaser must undertake to comply with the maintenance obligation. The Tax Package also contains technical clarifications, such as changes in the proportion of cost accounting and the inclusion of sports academies in the subsidy system.

Since 2024, in relation to research and development (R&D) activities, taxpayers may choose to apply a tax credit instead of a tax base decreasing item. This choice is of a long-term nature and, under the current regulations, can only be changed in the 6^th year following the first tax year covered by the choice. This period is now shortened by one year, meaning that from the 5^th tax year it will be possible to revert to applying the tax base decreasing item.

The Tax Package also introduces a tightening regarding the amount of the R&D tax credit where the taxpayer claims it in relation to R&D activities carried out jointly with higher education institutions, research institutes or state-owned research centres. In these cases, the tax credit previously corresponded to the eligible costs (up to a maximum of HUF 500 million). Under the Tax Package, this ratio will decrease while the HUF 500 million upper limit remains unchanged: in the case of basic research, 100% of the costs will continue to be eligible, while for applied research only 50% and for experimental development only 25% of the costs may be considered.

From 2026, a new corporate tax credit will be available for the remediation of environmental damage and for other specified environmental investments, such as projects aimed at restoring soil and water quality or rehabilitating habitats, with a present value of at least HUF 100 million. The tax credit will amount to 100% of the eligible costs in the case of the elimination of environmental damage and 70% in the case of ecological developments and may be increased by 20 percentage points for small enterprises and by 10 percentage points for medium-sized enterprises, up to a maximum of EUR 30 million. This tax credit may first be applied to investments started on or after 1 January 2026.

Also from 2026, development tax incentives may be claimed in respect of the commissioning and operation of investments that increase the production capacity of clean technologies. These may be applied at a maximum aid intensity of 15% in Budapest and 35% in other regions (subject to the rules on cumulation of aid). Such an investment will only be eligible for support if, in the absence of the aid, it would be carried out outside the territory of the European Economic Area. A transitional provision ensures that taxpayers who have already submitted a development tax incentive notification may switch to this new title. At the same time, the development tax incentive title supporting strategic investments related to the net zero emissions target will be discontinued, as the EU Temporary Crisis and Transition Framework (TCTF) will no longer be applicable from 2026.

From 2026, the threshold for quarterly corporate tax advance payments will rise from HUF 5 million to HUF 20 million, allowing more companies to benefit from the less frequent, quarterly payment obligation. For taxpayers with a calendar tax year, the transition can start from July 2026, and the advance payment for the last quarter must be made by 20 December.

The Tax Package also clarifies the rules on subsidies for sports academies: it aims to specify the conditions under which the transfer of 1% of the subsidy may be made, thereby increasing transparency and legal certainty in relation to the accounting of such subsidies.

Global minimum tax

The regulations on the global minimum tax will be substantially expanded. The concepts of “simplified covered tax” and “simplified effective tax rate” will be introduced. In addition, the definitions of “qualifying country-by-country report” and “qualifying financial statements” will be aligned with OECD guidelines, thereby ensuring comparability and legal harmonisation.

Value added tax

The amendments to value added tax (VAT) affect both VAT groups and VAT returns.

If the representative of a VAT group ceases to exist, the tax authority will be entitled to designate a new representative (the group member with the largest tax performance) if the members do not make a relevant notification within 15 days. This is a clearly positive change, as in the past the failure to meet this deadline resulted in the dissolution of the VAT group. From 2026, the scope of liability of members of the VAT group and of taxable persons outside the group will be expanded. In addition, the joint and several liability of VAT group members will no longer be limited to VAT but will also extend to all legal consequences specified in the Hungarian Act on the Rules of Taxation. This means that the group members and the taxable persons outside the group will be jointly liable for obligations arising from defaults, irregularities or other tax law consequences committed by a group member, including tax penalties and late payment interest.

From 1 July 2026, taxable persons will have a new obligation in their VAT returns: for each incoming invoice issued in their name, they must indicate separately the amount of VAT deducted on a per-invoice basis. This must be provided broken down by tax rate, i.e. separately for items subject to the 27%, 18% and 5% rates (it should be noted that the VAT return already contains this option, but its completion is currently voluntary). This change will result in additional administrative workload for businesses processing a large number of incoming invoices, as VAT returns will require more detailed data reporting.

If a taxable person retrospectively registers for VAT with the tax authority, they must submit supplementary VAT returns monthly for all previous periods in which they had a VAT payment obligation but did not yet file a VAT return. This differs from the previous practice, under which it was sufficient to submit quarterly VAT returns for the years preceding the current year.

From 1 January 2026, the VAT rate on the supply of meat, slaughter by-products and offal of domesticated cattle will be reduced to 5%.

The upper threshold of the VAT exempt status for small enterprises will gradually increase from the current HUF 18 million: to HUF 20 million in 2026, to HUF 22 million in 2027 and to HUF 24 million in 2028.

Rules of taxation

The Tax Package amends the Hungarian Act on the Rules of Taxation so that the Tax Authority will be entitled to cancel the tax number of a taxpayer who fails to comply with its obligation to report its legal representative. The tax number may also be cancelled if the taxpayer fails to submit its VAT return, recapitulative statement or social security return and does not remedy this omission within 90 days after the statutory deadline.

Before the tax number is cancelled, the tax authority will send the taxpayer a notice with a 30-day deadline to submit the missing notification or return, thereby providing an opportunity to restore lawful operation. If the taxpayer fails to comply with this notice, its tax number will be automatically cancelled, and the tax authority will immediately inform the court of registration, which will initiate proceedings to terminate the company.

Social contribution tax

The Hungarian Act on Social Contribution Tax will also be amended: from 2026, the monthly minimum base of social contribution tax for self-employed individuals and partners in partnerships treated as main-occupation entrepreneurs will be reduced from 112.5% of the minimum wage to 100% of the minimum wage.

In addition, there will be an administrative simplification for individual entrepreneurs: those who opt for taxation based on entrepreneurial income – similarly to flat-rate taxpayers – will be able to assess and pay their social security contributions and social contribution tax on a quarterly basis instead of monthly.

Local taxes

The amendments to local taxes clarify and extend the concept of rights representing assets. In the future, the lessee’s right in a leasing arrangement and the right of the purchaser in transactions where title is subject to retention of ownership will also be classified as rights representing assets.

Furthermore, the right of municipalities to levy local taxes will be restricted. Under the current regulations, such tax may not be imposed on arable land; the Tax Package extends this prohibition to forests and the related rights representing assets. Thus, from 2026, municipalities will not be allowed to levy local taxes on properties registered as forests or on the rights of use or disposal attached to them.

Small business tax

With regard to the small business tax, it is important to highlight that the entry criteria will become more favourable from 1 December 2025 (the date from which the option to choose this tax regime becomes available): the headcount limit (average statistical number of employees) will increase from 50 to 100, and the revenue and balance sheet total thresholds from HUF 3 billion to HUF 6 billion. From 2026, the exit thresholds will also be higher: the revenue threshold will rise to HUF 12 billion and the headcount limit to 200.

In addition, when calculating the cash balance for the purpose of the small business tax, electronic payment instruments (such as PayPal, Revolut) will not be considered.

Registration tax

As regards registration tax, the Tax Package clarifies that if the owner and the operator of a vehicle are different persons, the taxpayer liable to pay the registration tax is the owner.

Advertisement tax

The Tax Package postpones the application of the advertisement tax only until 30 June 2026, which means that this tax, which has been effectively dormant for years, will return as from 1 July 2026 in the middle of the calendar year. The primary taxpayers of the advertisement tax are entities publishing advertisements – media companies, publishers, outdoor advertising providers, online platforms – but in certain cases clients (advertisers) may also become liable. For publishers of advertisements, advertising revenues up to HUF 100 million will be tax-free, while the amount exceeding this threshold will be subject to a 7.5% advertisement tax. Clients that become taxpayers (in the absence of a declaration from the publisher) will be subject to a 5% advertisement tax, with the aggregate monthly consideration for advertisements being tax-exempt up to HUF 2.5 million. As things currently stand, the advertisement tax returning in mid-2026 will place a significant administrative and financial burden on the affected entities (media companies and advertisers), so they are advised to closely monitor any (potential) developments and to start preparing in time for the “old-new” regime.

Retail tax

The tax brackets of the retail tax have already been amended for the 2025 tax year: the upper limit of the tax exemption has been increased from HUF 500 million to HUF 1 billion, the 0.15% rate applies up to HUF 50 billion, the 1% rate applies up to HUF 150 billion, and the 4.5% tax applies only to the part of the tax base exceeding HUF 150 billion. The change does not apply to retailers of motor vehicle fuel.

Duties

The Tax Package brings a significant change to gift duty rules for business entities: the acquisition of property through the waiver of a loan granted by the owner will be exempt from gift duty if the waiver takes place in the framework of a voluntary dissolution and the process ends with the company being removed from the register without a legal successor. Previously, such acquisitions were subject to duty, so this change will create more favourable conditions for companies being wound up through voluntary dissolution.

The rules on transfer duty relating to residential property will also change, in cases where an individual purchases, exchanges or sells multiple residential properties within a short period of time. Under the previous rules, when determining the difference in value forming the basis of the duty, only the immediately preceding or subsequent transaction of the same legal title could be considered. From 2026, under the Tax Package, this restriction will cease to apply and, instead, any previous or subsequent transaction of the same legal title resulting in the most favourable difference in value for the taxpayer liable for the duty may be taken into account.

Social security

The amendments to the social security regulations introduce a new concept, the long-term agency relationship. This is a type of engagement based on an agency contract that the employer specifically registers with the tax authority as a long-term agency. A characteristic of this relationship, similar to an employment relationship, is that it will be mandatory to determine a minimum contribution base. Accordingly, the basis for contributions will be at least 30% of the applicable minimum wage per month, regardless of the actual remuneration paid. This rule is intended to ensure the predictability and sustainability of entitlements to social security benefits.

According to the Tax Package, from 1 October 2026 the Complex Legal Relationship Register (in Hungarian: Komplex Jogviszony Nyilvántartás, KJNY) will be launched as a central electronic database jointly established by the tax authority, the managing body of the Health Insurance Fund and the Hungarian State Treasury. The purpose of the KJNY is to manage in one place the data relating to individuals’ social security relationships, such as the validity of their social security number (abbreviated in Hungarian as “TAJ”), the type and duration of their insurance relationship and other relevant information.

The KJNY will be accompanied by an online administration interface and a mobile application, enabling citizens to retrieve data relating to their own legal relationships and to carry out certain procedures electronically.

Bank surtax

From 1 January 2026 (for as long as the state of emergency remains in force), credit institutions and financial enterprises will have to pay a bank surtax of 10% instead of the current 8% on the part of their tax base up to HUF 20 billion, and 30% instead of 20% on the part exceeding this threshold. In addition, the tax credit they can claim by purchasing government securities will be reduced from the previous 50% to 30%. Affected entities will first have to take these changes into account in their tax year starting in 2026.

Excise duty

The automatic increase (indexation) of excise duty on petrol, kerosene and diesel, originally scheduled for 1 January 2026, will only enter into force on 1 July 2026.

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This newsletter was prepared based on the information available on the date of its publication and is intended for general information purposes only. It does not constitute, and should not be relied upon as, personalised tax advice and does not replace such advice in any respect.