Summary of the changes in tax law
Newsletter – 08.12.2025
Dear Client,
The government announced the 2025/2026 tax law amendments in two parts, on 19th and 21st November. While certain provisions will enter into force already in 2025, but the amendments primarily relate to the 2026 tax year.
According to the explanatory notes the new rules are mainly aimed at simplifying administration, whitening the economy, and complying with EU law and other government tax and policy decisions.
1. Personal income tax
Cost ratio of flat-rate private entrepreneurs
The 40% cost ratio of flat-rate private entrepreneurs will increase in two stages to 45% from 1st January 2026 and to 50% from 1st January 2027. The purpose of the amendment is to support smaller business administration and to increase the competitiveness of flat-rate taxation.
Transactions with crypto assets
Private individuals are obliged to keep a record of losses from crypto transactions that have not yet been used for tax offsetting and indicate them in their annual tax return. According to the new rule, losses declared in any previous year can be offset, but up to the amount of tax paid on crypto income declared in the actual year and in the previous two years.
Bank fraud, tax exemption of compensation for damages received
The compensation for damages that a private individual receives from the credit institution for damage caused by the misuse of payment data and fraud will be exempt from tax.
Continuing statement
Mothers with three children and mothers under the age of 30 will be able to make a permanent (continuous) declaration for the assessment of tax advances from next year, so they will not have to make a new declaration every year on the conditions of entitlement until there is a change in them.
Tax allowance for mothers under 30
As a result of a recent clarification in the law, the tax allowance for mothers under the age of 30 also extends to those who turned thirty in the year of the birth of their child.
Benefits in the public sector
As part of the Home Subsidy Program (Otthonteremtési Program), public service employees can apply for a housing benefit of HUF 1,000,000 for the purchase of a home or repayment of a home loan, which is taxed as a fringe benefit. The amount spent on the in-service training of teachers; including meals, travel and accommodation costs in addition to the training fee – can be provided as a tax-free benefit from 20th November 2025.
Permitted uses of the SZÉP card
Temporarily, it will again be possible to use the balance on the SZÉP Card for the purchase of food. The new regulation will be in effect from 1 December 2025 to 30 April 2026 and applies to certain food products specified in a separate regulation.
2. Corporate tax
Tax allowance for R&D activities
Previously, the decision on the tax allowance available for R&D activities could only be modified from the sixth tax year following the first tax year affected by the choice, but according to the new rules, this will be possible from the fifth tax year.
Previously, the tax allowance applicable to R&D activities carried out jointly with a higher education institution, the Hungarian Academy of Sciences, a state research institute or a research institute could be applied up to a maximum value limit of HUF 500 million.
According to the new regulation, which will be in force from 20th December 2025:
- in the case of basic research, up to 100% of the eligible costs,
- in the case of applied (industrial) research, 50% of them,
- and in the case of experimental development, 25% of them
can be considered as a tax allowance.
The amount of the corporate tax allowance related to joint R&D projects will therefore be differentiate. Instead of the previous uniform, full cost-based validation, the classification of the activity according to the R&D type will determine the amount of the allowance that can be used.
Increasing of the scope of beneficiaries
According to the amendment, the range of beneficiaries of corporate tax contributions will be expanded. In addition to the Hungarian Olympic Committee, sports academies will also be eligible for support.
Tax advance frequency
Instead of the previous HUF 5 million, a monthly corporate tax advance must be paid above HUF 20 million of corporate tax. The threshold for the application of the special tax advance scheduling rule for taxpayers in the agriculture, forestry and fisheries sectors will also increase in the same way.
Tax allowance for environmental purposes
As part of the tax package, a new category, the tax allowance for investments and renovations aimed at the elimination of so-called environmental damage and other specified environmental protection purposes, will be introduced. The investment must be aimed at the elimination of environmental damage, the rehabilitation of habitats, or a nature-based solution aimed at the protection of biodiversity and adaptation and mitigation of climate change. The tax allowance will be available in the tax year following the commissioning of the investment or renovation or in the following tax year, and in the five tax years following the first use, if it was reported before the start of the investment.
Development tax allowance
Among the development tax incentives, a new type of investment appears to ensure the production capacity of clean technologies. Under this title, the tax allowance can only be granted for an investment that would be otherwise be located outside the EEA in the absence of state aid.
Income tax for energy suppliers
From 2026, the tax package introduces a new investment tax allowance in the income tax of energy suppliers, which would be applicable to energy developments started after 31 December 2025 and put into operation in the given tax year. The amount of the allowance can be determined on the basis of the difference between the cost of the investment put into operation and the subsidies received, up to a maximum of 80% of the tax payable, or up to 50% of the difference between the investment value and the adjusted depreciation, and it can be used for an additional five years in the year of commissioning. The condition for eligibility is the existence of an investment promotion certificate and the maintenance of the investment for at least five years.
3. Small Business Tax
The amendment significantly increases the thresholds for choosing and terminating small business tax from 1st December 2025. The entry barrier will increase from 50 to 100 people in the case of headcount, and from HUF 3-3 billion to HUF 6-6 billion in terms of the amount of income and balance sheet total accounted for in the tax year preceding the tax year.
The thresholds for the termination of small business tax will also change from 1st January 2026. According to the new provision, the limit of HUF 6 billion for the previous sales revenue will be increased to HUF 12 billion, and the limit of 100 people for the average statistical headcount will be increased to 200 people. The change will make small business tax available to about 4-5 thousand additional businesses, in addition to the current approximately 100 thousand subjects. The transition from corporate tax during the year is still possible, but it is subject to a closing obligation, so it is advisable to examine the transition at the end of the year, and in the case of group companies, to evaluate it at group level.
The amendment introduces significant relief for businesses. Until now, the minimum amount of personnel-related payments for members of partnerships had to be set at 112.5% of the minimum wage, even if the actual wage was lower. The amendment reduces this mandatory minimum to 100% of the minimum wage. As a result, the small business tax base will be lower for many businesses, resulting in direct tax savings.
4. Global minimum tax
The conceptual framework of the Act is being refined. The legislator is revising the previous definition of the simplified effective tax rate and introducing new safe-harbour concepts (simplified covered tax, recognised CbCR, recognised financial statements) in order to facilitate their application. As a result, the domestic rules on the global minimum tax will be conceptually aligned with the OECD framework.
5. Registration Tax on Vehicles
As a general rule, the person in whose name the registration is initiated continues to be considered the tax. However, the new provision of the Act stipulates that if the identity of the owner and the operator differs, the subject of the tax is the owner.
6. Value Added Tax
VAT rate change
As of 1 January 2026, edible meat, slaughter by-products and offal (fresh, chilled or frozen) of domesticated cattle will be subject to a 5% tax rate.
Threshold individual exemption
Between 2026 and 2028, the modification will increase the threshold entitling to opt for individual tax exemption in several phases to HUF 20 million from 1st January 2026, to HUF 22 million from 1st January 2027, and then to HUF 24 million from 1st January 2028. The transitional provisions related to the amendments will allow for the choice for the following year as early as 22nd November 2025, if the taxpayer’s income actually exceeds the threshold applicable to the given year in the previous year and is not expected or actual in the current year. The aim of the regulation is to allow businesses to use this more favourable tax option more flexibly even in the case of a rollback ban in line with the rising thresholds.
Increase of the mandatory data content of the domestic recapitulative report
According to the amendment effective from 1st July 2026, detailed data reporting on the amount of tax deducted separately for each VAT rate that can be voluntarily provided in the VAT return will become mandatory.
Group taxation arrangement
If the representative appointed by the members participating in the group is terminated in this capacity, the members must appoint and notify the new representative within 15 days of the termination. In the absence of this, the Hungarian Tax Authority shall appoint the member with the highest tax performance as a representative. The status of representative ceases to exist if the representative is subject to liquidation proceedings or compulsory deletion proceedings, or if the representative is terminated without a legal successor after the termination of the group tax liability. The new text of the law also lays down the rules on the appointment and notification obligations of members or their legal successors.
In addition to the obligations under the VAT Act, the joint and several liability of the members will be extended to the legal consequences under the Act on the Rules of Taxation.
Data access in the event of legal succession
In the case of legal succession, the legal successor will first have access to the data provided by the Hungarian Tax Authority for the tax assessment period including 1st January 2025, and from this date onwards, it will also be able to carry out a self-revision of the previous returns of the legal predecessor.
At the same time, the amendment specifies the excluded cases of legal succession, thereby ensuring the legal certainty and uniform management of data access during corporate transformations.
Other administrative changes
The new text of the law expands the mandatory data content of the tax refund form for foreign passengers and, in the spirit of digitalisation, makes it possible to certify the exit of a product from the territory of the Community not only on paper, but also electronically.
7. Excise tax
Fuel excise tax increase
The provision, which will enter into force on 22nd November 2025, stipulates that the annual inflation-related adjustment of the tax rates of petrol, kerosene and diesel (valorisation) will exceptionally enter into force in 2026 not on 1st January, but on 1st July.
Withdrawal of authorization
In the case of a public debt exceeding 60 days, the excise type authorization may only be withdrawn if the deadline specified in the order calling for payment has expired without result (i.e. the licence will remain in force if the authorization holder pays its obligation by the deadline or payment has been authorised in instalments or deferred payment).
Checking postal items
The Hungarian Tax Authority is still entitled to inspect parcel items handled by postal service providers. In the case of untaxed excise goods, the postal service provider or contributor may be exempt from the legal consequences of the untaxed product found during the opening if it proves beyond doubt that it has acted lawfully and in accordance with its business regulations.
Winemaking activities
From 1st January 2026, the law provides a 50% tax allowance for small-scale sparkling wine producers, which also applies to taxpayers from other Member States below the given production limit (maximum 500 hl per wine market year). The allowance qualifies as de minimis aid.
8. Retail Tax
The amendment significantly increases the range limits of the retail tax. The HUF 500 million threshold will be increased to HUF 1 billion, the HUF 30 billion threshold to HUF 50 billion, and the HUF 100 billion threshold to HUF 150 billion. The new bands will be applicable from the tax year starting in 2025, so most taxpayers may be subject to a lower rate.
According to the rule in force in 2025, a 0% tax rate will apply to revenues from fuel retail up to HUF 500 million, and a 3% tax rate will apply to the part exceeding that. The amendment extends this preferential rule until 2026.
9. Local taxes
Right of pecuniary value
The definition of “property value rights” under the Act on Local Taxes will be expanded to include the lessee’s right and the buyer’s right arising from retention of title, to align the terminology with land registration rules. As a result, the holders of these rights, among others, will become subject to building tax and land tax.
Protection of the forest within the scope of local taxes
The 2015 amendment allowed municipalities to impose a municipal tax on any tax object, unless prohibited by law and not subject to other public charges. From 2023, arable land and from 2026 forests will be exempt from municipal tax.
10. Advertising tax
Although the government has never abolished the advertising tax, its tax rate has been 0 percent in the recent period. For the time being, this rate has only been extended until 30th June 2026, which predicts the return of the tax.
At the same time, the possibility is created for the tax authority to reduce or waive the HUF 10 million penalty for failing to comply with the reporting obligation if the taxpayer registers because of the first notice of the tax authority.
11. Duties
Duty exemption for owner’s loans waived during voluntary liquidation
Owner loans waived during the voluntary liquidation will be exempt from duty if the voluntary liquidation ends with the cancellation of the company. (According to the current rules, gift duty is usually payable in these cases.) If the company is not cancelled, the duty must be paid together with a late payment penalty.
Cancellation of property transfer duty
In the case of plots purchased for the purpose of residential construction, duty exemption may be applied if a residential house is built on the plot within 4 years. Until now, the fulfilment of the condition of exemption could be verified by an occupancy permit or an official certificate certifying the acknowledgment of occupancy, but under the new rules, also by a notification of “tacit acknowledgement” sent by the building authority to the parties concerned.
The Hungarian Tax Authority will be required to have a 15-day deadline for automated inspections after the completion of construction. If the conditions are met, the suspended fee will be automatically cancelled without a separate decision.
Changes to the replacement purchase
The duty allowance for purchase replacing the exchange will also be extended to holders of rights of pecuniary value about the suspension of the duty assessment procedure.
The rule according to which only the sale of the apartment closest in time to the purchase can be considered for the purposes of duty relief, so in the case of several transactions, a more favourable duty base can be determined for the acquirer.
12. Act on Social Security Benefits
Long-term Engagement
The concept of a long-term engagement relationship will be added to the definitions of the Act to avoid having to report and close the legal relationship for the current insurance period at the time of each payment, if the assignment is for a longer period (several months or years).
The employer notifies the national tax authority of the long-term engagement relationship, and the existence of the insured legal relationship is considered continuous from the start date of the assignment until the announcement of the end of the legal relationship. The minimum basis of the contribution in this case is 30% of the minimum wage.
Complex Legal Relationship Registration
The Complex Legal Relationship Register will be introduced, a new IT system from which the data of insurance relationships, health care entitlements, pension contributions and the European Health Insurance Card can be queried. The interface supports the administration related to the payment of public duties, the clarification of legal relationships, and provides access to electronic and mobile applications. The details of operation are regulated by a separate decree.
13. Tax procedure, tax administration, enforcement
Private entrepreneurs who have suspended their activities
Private entrepreneurs who suspend their activities are exempt from the obligation to file an extraordinary tax return if they did not actually carry out any activity during the period in question.
Tax liability reduction request
If the tax liability has been reduced due to a law that is contrary to the Fundamental Law or a binding legal act of the EU, or due to a local government decree that conflicts with other legislation, it has been possible to enforce this in the framework of a self-revision so far. In the future, a special application will have to be submitted for this case, which will be judged by the tax authority with a decision within 15 days of the submission of the request, provided that the decision of the Constitutional Court, the Curia or the Court of Justice of the European Union on this issue has not yet been announced at the time of submission of the request, or the taxpayer’s request does not comply with the provisions of the announced decision.
Deleting a tax number
In the future, the tax authority will delete the taxpayer’s tax number according to stricter rules in cases where the taxpayer has not reported its legal representative or fails to submit its VAT or monthly tax and contribution returns within 90 days of the deadline. According to the new, stricter rules, in the above cases, the request of the tax authority is not a condition for the cancellation of the tax number.
Other provisions
- Next year, the automatic instalment payment allowance may be granted on the basis of an application submitted before the tax becomes due.
- If the court issues a final decision on the tax liability beyond the limitation period, the taxpayer may submit a self-revision for the statute of limitations. This provision is not applicable if the self-revision would also have an impact on the VAT liability of other taxpayers.
- The late payment penalty for the tax shortfall may be charged from the original due date until the date of the audit report, but for a maximum of three years. The Hungarian Tax Authority does not prescribe a late payment penalty of less than HUF 5,000 per tax type charged on the tax shortfall. In the future, taxpayers will be able to request an extract from the fact of inclusion in the database of taxpayers with no public debts.
- The change affecting taxpayers with retrospective VAT registration is that the frequency of returns for the period prior to the date of registration will be uniformly monthly in the future.
- The list of taxpayers who may not request the modification of the frequency of their VAT returns has been clarified and supplemented, which will still to be provided for in Annex 3 of the Act on Rules of Taxation.
Faster tax procedures
The Act on Tax Regulation will be supplemented with the possibility of an automated decision-making procedure. This allows for decisions made and delivered without human intervention if all the necessary information is available to the tax authority (typically in routine matters that do not require discretion, e.g. issuance of tax certificates, correction of tax returns).
Automated decision-making will not be permitted in appeal procedure.
In the spirit of digitalisation, the use of electronic protocols and signatures will be extended to customs procedures.
Under the new rules, the Hungarian Tax Authority will have direct access to the relevant data of the National Building Register (e.g. land use sheet, energy certificate, occupancy permit, personal identification data) and may also conclude a data processing agreement with the manager of the National Health Insurance Fund and the Treasury.
14. Accounting
From 1st January 2026, the conditions for accounting for transfer pricing adjustments will be uniformly tightened. The cost of assets, the net sales revenue and the accounted costs and expenses may only be modified if the difference is
- the parties have agreed on the adjustment and
- the adjustment is accounted for at the latest by the time the balance sheet is drawn up.
The purpose of the amendment is to ensure that adjustments based on arm’s length under the Act on Corporate Tax are reflected in accounting in a time-limited and transparent manner.
Also from 1st January 2026, the thresholds for the eligibility of micro-enterprise simplified annual financial statements will increase. The balance sheet total will increase from HUF 150 million to HUF 180 million, and sales revenue will increase from HUF 300 million to HUF 360 million. This makes the simplified reporting format available to a wider range of entrepreneurs, which involves less administration and at the same time limits the accounting options.
From 20th November 2025, the world currency exchange rate published in national newspapers will no longer be applicable in the case of currencies not quoted by the MNB or the ECB, in such cases only the free market exchange rate or conversion into a quoted currency will be applicable.
