On 27 October 2026, five tax-related bills were submitted to the Hungarian Parliament. This article highlights the provisions we consider particularly significant for businesses.

Mandatory eVAT: Postponement and phased implementation

Under the original rules, the use of transaction-level electronic VAT returns (eVAT) would have become mandatory for all taxpayers concerned from 1 January 2027. The proposed legislation would postpone this date and introduce a phased rollout. From 1 July 2027, the obligation would initially apply to monthly VAT filers established in Hungary with the highest tax performance in 2026 (who will be notified by the Hungarian tax authority, NAV, by 15 December 2026). The requirement would then be extended to other taxpayers, subject to limited exceptions, from 1 January 2028. The postponement would give businesses more time to prepare the necessary IT systems and internal processes.

The 5% VAT rate on new residential properties could become permanent

The bill would retain the reduced 5% VAT rate on sales of new residential properties without an expiry date. All other conditions for applying the reduced rate would remain unchanged. Retaining the preferential rate could have a significant impact on new home prices and, consequently, demand and the profitability of property developments.

15% Corporate Income Tax for “large enterprises”

The proposal would introduce a 15% corporate income tax (CIT) rate for “large enterprises”, instead of the current 9% rate. In addition to taxpayers voluntarily opting for large-enterprise taxation, this category would include taxpayers whose consolidated group revenue -or, in the absence of consolidated revenue, standalone annual revenue- reached EUR 500 million in the second tax year preceding the relevant tax year. If even one member of a Hungarian CIT group meets this criterion, the 15% rate would apply to the entire tax group, and all members would have to determine their individual tax bases under the rules applicable to large enterprises. In addition to the higher tax rate, affected businesses would need to take account of stricter tax-base and tax-incentive rules when planning for 2027.

Tax exemption for gains on disposals of shareholdings could be restructured

The current rules on registered participation would be replaced by the new concept of a “qualifying shareholding”. A favourable change would be the removal of the requirement to notify the tax authority of an acquisition within the current mandatory 75-day deadline in order to qualify for the CIT exemption on gains from disposal. However, the exemption would require a shareholding of at least 10% at the time of derecognition and continuous ownership for at least one year. The amendment would therefore simplify administration but could result in less favourable tax treatment for smaller shareholdings.

Enhanced R&D incentives – Higher innovation contribution

The bill would reshape tax incentives relating to research and development (R&D) in several respects, generally strengthening the tax incentives for in-house R&D activities:

• The CIT credit available for R&D activities would increase from 10% to 20% of eligible costs, while the five-year lock-in period associated with electing the credit would be abolished.
• For in-house R&D, the direct personnel expenses of researchers and depreciation of the assets they use could be taken into account at twice their amount for the additional CIT tax-base deduction. Together with the ordinary deduction of the underlying expenses, this could result in a total tax-base reduction equal to three times the relevant costs. At the same time, the tax-base deduction for R&D services purchased from external providers would be restricted.
• The relief available in respect of R&D personnel under the social contribution tax and the small business tax (KIVA) would also increase.

In parallel, the innovation contribution rate would rise from 0.3% to 0.5%.

As direct R&D costs also reduce the innovation contribution base – except where the company elects to claim the CIT R&D tax credit – it would become even more important to assess the available incentives and the overall tax burden together.

Stricter conditions for development tax incentives

While the R&D tax credit would remain available up to the full amount of calculated CIT, the development tax credit and other tax credits combined would be limited to 70% of the calculated CIT remaining after the R&D tax credit, compared with the current 80%.

The general investment threshold for the development tax credit would increase from HUF 3 billion to HUF 5 billion in present-value terms. The conditions relating to eligible investments, the period for claiming the incentive and relevant deadlines would also change. Additional requirements would apply to large enterprises, while certain procedural rules would be simplified.

Abolition of certain CIT incentives

Under the proposal, the CIT credit and tax allocation mechanism relating to support for spectator sports would be abolished from 2027. Previously acquired entitlements to tax relief could still be used during a transitional period: support transferred by the end of 2026 for a sports development programme approved before 1 January 2027 could be claimed no later than in a tax return filed before 1 July 2029. For tax allocations, however, attention must already be paid to the declaration deadline of 30 November 2026 and the payment deadline of 2 December 2026.

Certain CIT tax-base deductions relating to the sale or contribution in kind of registered intangible assets and qualifying intangible assets would also be abolished.

Changes to transfer pricing reporting

In future, transfer pricing reporting would have to be completed on a separate form rather than as part of the annual CIT return. Taxpayers could elect to apply the new rules already to reporting for the 2026 tax year.

Advertising Tax payments could resume

From 2027, the first HUF 500 million of the tax base of advertising publishers would be subject to a 0% rate, with the excess taxed progressively at rates of 2.5%, 4.5% and 7.5% across the relevant tax bands. The proposal would also affect the rules applicable to advertising service customers and the aggregation of tax bases of related parties.

Company Car Tax burdens could rise sharply

From 1 January 2027, the current highest company car tax power category, covering vehicles above 120 kW, would be divided into four categories with different tax amounts depending also on environmental classification. In addition, each taxpayer would be allowed to deduct motor vehicle tax paid from company car tax for only one selected vehicle; for other company cars, both taxes would effectively apply without the offset. The exemption for fully electric and zero-emission vehicles would remain in place, while the transitional exemption for previously registered plug-in hybrids and extended-range hybrid electric vehicles would expire at the end of 2026. The changes could increase costs for businesses operating multiple company cars or higher-powered vehicles, making it advisable to assess the expected tax burden when planning company car fleets.

Higher Rehabilitation Contribution for larger employers

For employers with at least 250 employees, the proposal would increase the rehabilitation contribution payable for each employee with a disability or reduced work capacity missing from the statutory employment quota, with the amount depending on total headcount. Instead of the current nine times the minimum wage per missing employee per year, the contribution would be 11 times the minimum wage for employers with 250–499 employees, 13 times for those with 500–999 employees, and 15 times for those with at least 1,000 employees.

Sector-specific taxes: still with us

From 2027, the retail tax rate on the portion of the tax base between HUF 1 billion and HUF 50 billion would triple from 0.15% to 0.45%, while the rates for other bands would remain unchanged. The amendment would also affect tax advances for 2027.

From 2027, the currently progressive insurance tax would apply at a uniform rate within each class of insurance, eliminating the preferential rates currently available to insurers with a tax base below HUF 20 billion. The progressive structure of the insurance surtax would remain, and a reduction linked to an increase in holdings of Hungarian government securities would continue to be available subject to specified conditions. 

The extra-profit tax on credit institutions and financial enterprises would remain in place in 2027. With tax rates unchanged, the 2027 tax base would be determined by reference to profit before tax reported in the financial statements for 2025. Subject to the prescribed conditions, the tax payable could still be reduced on account of an increase in holdings of government securities during the tax year.

The expected changes may have a significant impact on businesses’ tax burdens and tax planning opportunities. Our experts can help you review the changes affecting your business and prepare for the new regulations.

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