The act on the 2025 summer tax amendments (Act LIV of 2025) was promulgated in the 19 June 2025 issue of the Hungarian Official Gazette. In addition to making several fine-tuning amendments to existing tax mechanisms, the legislature has formally integrated windfall profit taxes and the latest tax exemptions applicable to mothers into the tax law. The only tax increase within the package affected the retail tax. In contrast, several relief measures were introduced within the scope of corporate income tax. Notably, the preferential regime applicable to reported participations is now available in the context of cross-border transformations. Furthermore, the preferential asset transfer rules can now also be applied in cases of spin-offs, and certain corporate income tax base and tax allowances are now subject to more favourable conditions. The amendment also introduced a transfer tax exemption for the sale of solar and wind power plant structures. In addition, the exemption from transfer tax applicable to preferential asset transfers was extended. The deadline for filing the declaration on the applicability of the global minimum tax regime has been postponed. With the entry into force of the new Annex No. 11 to the VAT Act, the electronic receipt data reporting system has been launched. The tax authority will be provided more time for the inspection of chain transactions. Our newsletter provides a summary of the key changes.

 

Amendments affecting corporate income tax

Under the amendment, a long-term asset management arrangement under the Act on Asset Management Foundations shall also qualify as a “fiduciary asset management relationship” for the purposes of the Corporate Income Tax Act. Consequently, statutory definitions related to fiduciary asset management have been expanded accordingly.

Microenterprises will benefit from more favourable conditions when applying the corporate income tax base allowance related to increasing headcount. The amount of the deductible allowance is increased by 50%, meaning that instead of 100%, 150% of the product of (i) the increase in average headcount compared to the previous tax year, and (ii) the monthly minimum wage in effect on the first day of the tax year, may be deducted from the tax base. The allowance remains available as long as the average headcount in the previous tax year did not exceed 10 persons (up from the previous limit of 5). These more favourable provisions may already be applied for tax years starting in 2025. Should the average number of employees decrease, the corporate income tax base must be increased in the year of the decrease by an amount equal to 1.5 times the annual minimum wage valid on the first day of the previous tax year, but no more than 120% of the allowance previously claimed for the increased headcount. Allowances claimed in the fourth or earlier years preceding the headcount reduction are not subject to repayment.

In the case of a preferential asset-transfer, if the taxpayer (or its related party) does not keep the shares, received as a consideration, for the minimum holding period, the profit-like difference arising at the time of transfer—between the assets transferred (+) and liabilities assumed (–), and the consideration received—must be taxed in the tax year of the derecognition of such shares. The amendment addresses partial non-fulfilment of the holding obligation: in such cases, the increase to the tax base must be calculated in proportion to the ownership ratio of the derecognised participation (i.e. deferred tax liability applies only to the non-fulfilled portion). These amended rules must be applied to non-fulfilments occurring after their entry into force.

Clarifications have been made regarding IFRS taxpayers: adjustments related to own shares are applicable even if the repurchase of such shares occurred in prior years before resale or contribution in kind.

The definition of reported participations has been refined to ensure applicability in cross-border reorganisations. Although the new definition applies from the entry into force of the amendment, taxpayers who underwent cross-border reorganisations between January 1, 2024, and the amendment’s effective date—becoming domestic taxpayers as a result—may report any previously acquired but unreported participations within 75 days following the entry into force.

For R&D activities involving higher education institutions, the Hungarian Academy of Sciences, budgetary research institutions, their research centres, or state-majority-owned research institutes, the maximum tax base allowance corresponding to three times the direct R&D costs increases from HUF 50 million to HUF 150 million. This favourable rule may already be applied to tax years starting in 2025.

As a result of the amendment, the legal institution of spin-off introduced in 2024 may qualify as a preferential asset transfer, and benefit from the preferential transfer regime. (Related exemptions from duties are discussed in our newsletter’s section on duties.) The amendment also exempts asset transfers under a preferential spin-off between related parties from the obligation to apply the arm’s length principle. This new rule applies to demergers completed after December 31, 2024.

Effective as of promulgation, another amendment provides that costs and expenses incurred in providing higher-powered electric bicycles (up to 750 W) are recognised for corporate income tax purposes under unchanged conditions.

For stand-alone environmental investments (Section 4(28)), it will no longer be a requirement that the investment solely serve environmental protection objectives as defined by the Environmental Protection Act.

The quarterly data reporting obligation applicable to the first two years for taxpayers transitioning to IFRS-based taxation has been abolished.

 

Amendments concerning the Global Minimum Tax

The deadline for notification of taxpayer status related to the global minimum tax has been changed to the last day of the second month following the end of the tax year.

 

Amendments Concerning Value Added Tax (VAT)

In the case of VAT refunds for foreign tourists, a new form of proof of exportation from the EU customs territory is introduced: the customs authority shall certify the data file prepared in accordance with the mandatory data content of the VAT refund form in its own IT system. The data file must be pre-approved by the tax authority (NAV). If this method is chosen, the certified data file must be made available to the retailer for the application of VAT exemption.

For domestic reverse charge VAT on natural gas sales between taxable traders, the buyer must issue a written declaration to the seller confirming their status as a taxable trader.

The revenue threshold of HUF 18 million entitling a taxable person to apply for small-business exemption, which had previously been specified by government decree for application from January 1, 2025, is now included directly in the VAT Act.

The amendment allows taxable persons to apply the special scheme for small enterprises during the intra-Community transfers of their own goods—except in the case of new means of transport. In such cases, the acquisition or production value of the goods shall be taken into account when determining the small business exemption threshold.

Upon the death or loss of legal capacity of a VAT-exempt sole entrepreneur or agricultural producer, the surviving spouse, heir, or legal representative continuing the business may opt for general VAT taxation upon taking over the enterprise, allowing for mid-year transition. The same option applies in the case of business transfers under the 2021 Act CXLIII on the Transfer of Agricultural Enterprises.

For travel agency services, the provider must indicate the tax base and the VAT amount on the invoice only if the recipient is a taxable person who declares that they are not receiving the service as a travel organiser. However, the VAT return filed with the tax authority must always include the tax base and VAT amount.

Obligations related to online data reporting will be expanded. For e-receipts and equivalent documents introduced from July 1, 2025, the online reporting must comply with the content requirements of the new Annex 11 to the VAT Act.

In case of legal succession, if the successor issues an invoice for a transaction carried out by the predecessor, the online invoice report must also include the tax number of the predecessor. In the case of supplies by a VAT group member, the member’s tax number must also be included.

Non-established taxpayers in Hungary who declare VAT on domestic supplies of goods or services through the One Stop Shop (OSS) fulfil their reporting obligations by making available the electronic records required under the OSS scheme.

 

Changes affecting Personal Income Tax

One of the most significant changes is the introduction of new tax benefits for mothers in various life situations. According to the amendment, the Personal Income Tax Act (PIT Act) will incorporate previously adopted benefits from separate legislation that affect mothers. Specifically, the tax exemption for maternity benefits, childcare benefits, and adoption benefits will enter into force on 1 July 2025. The tax exemption for mothers with three children will apply from 1 October 2025, while the benefit for mothers with two children will be introduced gradually, concurrently with the benefit for mothers under 30, from 1 January 2026.

In connection with this, the order of application of tax base reducing allowances will be regulated by law. According to the new regulations, the benefit for mothers under 30 is to be applied first, followed by benefits based on the number of children (for mothers with four, three, or two children), then the exemption for maternity and care benefits, followed by the benefit for individuals under 25, personal allowances, the benefit for first-time married couples, and finally, the family allowance.

Administrative simplifications include the temporal supplementation of the content of certificates and declarations in line with the entry into force of the new allowances. Furthermore, a uniform 12% penalty shall apply for tax differences resulting from incorrect advance tax declarations, irrespective of whether the issue relates to cost deductions or the unauthorised application of tax benefits.

From 1 January 2026, the scope of tax-exempt benefits will be expanded and clarified as follows:

• The motor power limit of electric bicycles provided by the employer for private use will increase from 300 W to 750 W.
• Family allowance will remain tax-exempt; however, its legal basis will be explicitly included in Annex 1 of the PIT Act after the legislative change.
• Loan claims waived by financial institutions on grounds of death or disability on an individual equity basis will become tax-exempt.
• Accommodation in workers’ hostels will also be tax-exempt for employees of branch offices, provided that the statutory conditions are met.
• The applicability of rules governing trust relationships will be extended: from 1 September 2025, they will also apply to so-called long-term asset management arrangements. 

Additionally, clarification has been made regarding the valuation of assets considered as dividends granted by private foundations to private individuals.

 

Changes affecting Social Contribution Tax

The amendments to take effect from 1 January 2026 introduce significant changes in the tax treatment of high-earning private individuals who are retired in their own right and claim mothers’ tax benefits under the social contribution tax (SCT) system. The legislator is restricting the current full tax exemption for these high-earning retired women.

Under the new rules, a 13% SCT liability will arise for retired individuals claiming mothers’ tax benefits in respect of income forming the basis of the benefit, to the extent that such income exceeds four times the annual average gross wage. This applies both to income paid by the same payer and to income derived from self-employment (e.g., sole traders, agricultural producers). The payer is required to declare and pay the SCT liability in the January following the tax year. In cases involving multiple payers considered affiliated undertakings under the Corporate Tax Act, such payers must consolidate the incomes, with one designated payer fulfilling the tax obligation. However, all affiliated payers are jointly and severally liable for the tax payment. In cases of income not received from a payer or where no tax advance is withheld, the retired private individual is responsible for determining, declaring, and paying the SCT liability in the annual personal income tax return (including through the use of the pre-filled return), but only if the individual’s income exceeds four times the annual average wage. The applicable benchmark for annual average wage is the twelvefold amount of the gross national average wage published for July of the year preceding the tax year, as defined in the PIT Act.

The amendment also expands the list of benefits which, when paid concurrently (child-rearing support, child care benefit, or caregiver allowance), exempt the payer from taking the relevant day into account for SCT base purposes in the case of private individuals who are partners or sole entrepreneurs and receive such benefits.

 

Changes affecting Social Security Contributions

Effective from 1 July 2025, the scope of those eligible for the family contribution allowance will be expanded. Persons receiving childcare benefit (GYED) who do not qualify as insured individuals (i.e., passive GYED recipients) will also be able to apply the family contribution allowance under the general rules.

The amendment introduced in the SCT Act will also be incorporated into the Social Security Contributions Act (Tbj. Act) from 1 January 2026, stipulating that during the concurrent disbursement of the aforementioned child-related benefits, sole proprietors shall be exempt from minimum contribution payment obligations, and the lower limit of the contribution base for partners shall be proportionately reduced.

 

Key Amendments to Act CL of 2017 on the Rules of Taxation 

The definition of de minimis aid in the interpretative provisions has been clarified by specifying the applicable EU Commission regulations referred to in the Act.

In the case of simplified voluntary liquidation, the executive officer is responsible for fulfilling the taxpayer’s obligations and exercising the taxpayer’s rights.

Any procedural or default penalties imposed for infringements committed by the executive officer during simplified voluntary liquidation shall be applied in the same manner as for liquidators, voluntary liquidators, or executive officers in forced cancellation procedures

Monthly tax and contribution returns must now also include information related to childcare allowance and infant care benefit that have become tax-exempt.

A shareholder who transfers its participation remains partially liable — in proportion to the transferred ownership — for tax debts that are deemed uncollectible by the legal entity. The taxpayer may be held liable by resolution. Under the tax law amendment, such a resolution may be issued by the tax authority within 120 calendar days from the confirmation of failed enforcement (previously 90 days). If the tax authority becomes aware of the transfer of the participation after this deadline, the resolution can still be made within 60 days from the date it became aware of the transfer, even if the term limitation has elapsed or less than 60 days remain until the deadline.

Financial institutions are now required to report the opening or closing of a payment account to the tax authority within 7 days, indicating the account identifier. Similarly, in the case of any change in the domestic payment account number of a taxpayer due to reasons attributable to the financial institution, both the original and the new account numbers must be reported to the tax authority within 7 days of the change.

The Act is supplemented with data protection rules regarding biometric signatures (electronically recorded handwritten signatures) collected by the tax authority.

It is now explicitly considered a lawful use of tax secrets if a shareholder/member of a company requests information on the company’s tax debt for the purpose of settling that debt.

The benefit available to the so-called “reliable taxpayers” regarding tax audit deadlines has been supplemented to the extent that in addition to the previous 180-day deadline, the head of the tax authority may now extend the audit period to 365 days (only once) if the VAT obligation can only be verified through an audit chain involving multiple taxpayers. In relation to other taxpayers not qualifying as reliable taxpayers, the deadline can be extended up to 540 days.

The general rules on advance tax rulings are extended by reintroducing the preliminary consultation (this opportunity was abolished by the end of 2018) via an electronic platform which can be initiated by the taxpayer prior to filing the ruling request.   

Statutory fees for advance tax ruling requests have been increased:

• In the case of standard agreements: HUF 12 million (standard procedure), HUF 16 million (expedited procedure).
• In all other cases: HUF 10 million (standard), HUF 14 million (expedited).
• The reintroduced preliminary consultation is subject to a statutory fee of HUF 1 million per consultation.

Refund of the fee for an Advance Pricing Agreement (APA) is no longer allowed in certain cases (e.g., if a foreign related party rejects the agreement reached by competent authorities or if the application is withdrawn in specified cases).

A new provision specifies that if during a unilateral APA process the taxpayer initiates a bilateral/multilateral procedure, the taxpayer must pay the fee applicable to the bilateral/multilateral procedure. In case the taxpayer initiates a unilateral procedure during an already initiated bilateral/multilateral procedure, the taxpayer must pay the fee applicable to the bilateral/multilateral procedure.

The fee for preliminary consultation related to APA procedures has also been increased to HUF 1 million per consultation.

No default penalty shall be imposed for unreported employment if the taxpayer:

• Missed the notification requirement related to simplified employment;
• Fulfilled all declaration and payment obligations related to such employment by the due date or before the audit starts;
• Files the required employee insurance registration within the deadline for submitting remarks to the Minutes of the tax audit.

The penalties concerning the non-compliance with the reporting and filing obligations related to Global Minimum Tax remain unchanged; however, a new provision allows the tax authority to impose a penalty of HUF 10 million for incomplete, incorrect, delayed, or false data reporting.

As e-cash registers become permitted from July, the related sanction rules have been introduced in the Act in line with existing penalties for conventional registers. Pursuant to this, besides the maximum amount of default penalties for violating operational and application rules in relation to cash registers, the 12-day business closure for breaches related to the mandatory use and operation of cash registers rule is extended to e-cash registers as well.

 

Key Amendments to Act CLI of 2017 on Tax Administration Procedures

The rules on representation are extended with an additional new point: the acting tax authority may now appoint a guardian for taxpayers under forced cancellation who lack a legal representative.

The procedural recording provisions have been expanded to include rules and formal requirements related to electronically recorded minutes of proceedings.

The rules on extending tax audit deadlines have been revised:

• For taxpayers not required to be registered and those classified as reliable taxpayers, the head of the tax authority may extend the audit period once for up to 365 days, if necessary to verify VAT obligations involving chains of transactions across multiple taxpayers.
• For other taxpayers, the extension may be up to 540 days.
• If, during the extended audit period, the taxpayer’s reliable status is revoked or the taxpayer becomes non-cooperative, the deadline may be further extended once, up to 540 days.

A new provision determines the official end date of an audit if the minutes are prepared in electronic format regarding the on-site tax inspection.

 

Changes affecting the Retail Tax

As a result of the amendment, the following higher tax rates will apply to taxpayers in the retail sector for tax years beginning in 2025 and 2026:

• Up to HUF 500 million tax base – 0%
• On the portion between HUF 500 million and HUF 30 billion – 0.15%
• On the portion between HUF 30 billion and HUF 100 billion – 1%
• On the portion exceeding HUF 100 billion – 4.5%

Different rules apply to taxpayers engaged in retail sales of motor vehicle fuels (classified under TEÁOR ’25 47.3 – i.e., “petrol stations”). For these taxpayers, the current amendment establishes a special rule only for the tax year beginning in 2025. Unlike other taxpayers, they are subject to a flat 3% tax rate on the portion of their tax base exceeding HUF 500 million.

 

Amendments to Local Taxation

The legislative amendment allows municipalities to condition the eligibility for local tax allowances and exemptions on the taxpayer’s registered permanent or habitual residence as recorded in the official address register. In cases where the relevant address is not registered as either a permanent or habitual residence, the taxpayer may still be entitled to the benefit by providing evidence of habitual residence, such as utility bills issued in the taxpayer’s name.

As a result of the amendment, the scope of public service providers has been extended to include MÁV (Hungarian State Railways) and integrated railway companies. Subject to the fulfillment of specific criteria, these entities may be exempted from certain or all types of local taxes.

In the context of building tax and land tax, public service providers may benefit from exemption with respect to properties utilized for the performance of their public service duties. Additionally, entities falling within a specific category defined by law may also qualify for exemption from these tax types if the property is provided to a public service provider for the purpose of delivering public services.

Furthermore, the amendment increases the eligibility threshold for local business tax relief for district nurses and general practitioners. Municipalities may now grant tax allowances or full exemptions to such professionals whose local business tax base does not exceed HUF 40 million, in contrast to the former HUF 20 million limit.

In the case of gambling operators, the definition of net sales revenue has been revised: it is now defined as the net revenue from sales reduced by the amount of recorded prize payouts.

 

Motor Vehicle Tax and Company Car Tax

Under the amended legislation, the exemption from motor vehicle tax for buses is now subject to a revised calculation of the required minimum revenue ratio. In addition to net revenue derived from road-based public passenger transport, revenue from other forms of public transport, such as rail transport, may also be taken into account. As a result, buses operated by entities not exclusively engaged in road transport may now also qualify for tax exemption in practice.

Furthermore, the amendment introduces an exemption from company car tax for passenger vehicles operated by civil guard organizations or voluntary fire brigades, provided such vehicles are used exclusively for the performance of their core statutory duties.

 

Transfer Tax

The scope of the transfer tax exemption for preferential asset transfers is being expanded. Going forward, the exemption will apply not only to real estate and ownership shares in domestic companies holding real estate, but also to other types of assets. In addition, the legal concept of a “spin-off” will now qualify as a preferential asset transfer, meaning such transactions may also benefit from duty exemption, potentially leading to significant savings for taxpayers planning this type of corporate restructuring—as long as the existing eligibility conditions are met.

The amendment also introduces a specific exemption for power plant structures in the context of solar and wind power plants: the transfer tax on acquisition of property shall only be payable on the market value of the land, while the structures (e.g. the plant itself) will be exempt from this tax.

Additionally, the Act on Financial Transaction Duty has been amended to extend the duty payment obligation to transactions executed from electronic money accounts, broadening the scope of the tax.

The rules for duty exemptions have also been updated for asset acquisitions made through fiduciary asset management or by asset management foundations.

 

Changes to extra profit tax regulations

As a result of the current legal modification, the extra profit taxes according to Government Decree 197/2022 (VI. 4.) will not be phased out but will be elevated to the statutory level starting from 2026.

In addition to the elevation to the statutory level, the special tax rates applicable to credit institutions and financial enterprises will also increase next year: for the portion of the tax base not exceeding 20 billion HUF, the tax rate will rise from 7% to 8%, and for the portion exceeding that, it will increase from 18% to 20%.

The legislator will continue to encourage the purchase of government bonds through tax incentives in 2026: while the subjects of the bank special tax can expect a tax relief similar to the 2025 regulation for their government bond increase, the subjects of the insurance tax will see a tax relief of 30% of the increase in their government bond holdings, which may rise to as much as 60% in 2026.

 

Robin Hood Tax (Income Tax for Energy Providers)

A favorable change for energy providers’ income tax is that, starting from 2026, the previously increased tax rate, which was applied in response to the emergency, will decrease from 41% back to the previous 31%. Additionally, water utility providers will no longer be subject to this tax.