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.