In the 19 November 2025 issue of the Hungarian Gazette, a comprehensive omnibus act (Act LXXXIII of 2025) was published containing part of the year-end tax package. Two days later, an additional set of tax amendments was released in the form of a second omnibus act (Act LXXXIV of 2025), focusing on measures aimed at reducing the tax burden of businesses. Together, the two legislative packages introduce several significant changes. In the area of corporate taxation, the legislator has revised the deductible cost ratio applicable to the R&D tax incentive for certain taxpayers, and from 2026 a new environmental tax credit will become available. For VAT purposes, the mandatory data content of the M-sheet annex to VAT returns will be expanded, and the revenue threshold for the small-business VAT exemption will be increased in several stages. In the field of personal income tax, a favourable change for taxpayers using the lump-sum taxation regime is the gradual increase of their allowable expense ratio. As regards the small business tax, the circle of eligible taxpayers will widen substantially due to higher entry and exit thresholds. Within the social security system, the new Complex Legal Relationship Register (KJNY) will be launched in autumn 2026, providing a unified digital interface for querying and managing insurance and entitlement-related data. The retail tax, introduced five years ago, will see its previously unchanged tax brackets adjusted upward to partially offset inflationary effects. Our newsletter provides a detailed summary of these key developments.

Amendments affecting corporate income tax

Under the provision entering into force on 20 December 2025, the percentage of costs eligible for the research and development tax credit – determined in proportion to the deductible cost base – will no longer uniformly be 100% for taxpayers within the scope defined by the Act (e.g. the Hungarian Academy of Sciences, higher education institutions, HUN-REN, etc.). Instead, the support intensity will remain 100% only in the case of basic research, while it will be 50% for applied (industrial) research, and 25% for experimental development. There is no change to the limitations applicable to taxpayers outside the circle specified in the legislation.

A condition for applying the research and development tax credit is that the taxpayer must make a declaration of this election in its corporate income tax return. Under the previous rules, this election bound the taxpayer for six years; however, pursuant to the current amendment, this period is reduced to five years.

The scope of organisations whose jointly conducted research and development activities – carried out on the basis of a written agreement – may give rise to a corporate income tax base allowance is expanded: as of 20 November 2025, the related tax base allowance may also be applied in the case of joint research and development activities carried out with the HUN-REN Hungarian Research Network, or with an entity wholly owned by scientific organisations belonging to this network, where the primary purpose of such entity is to perform knowledge-utilisation functions for these institutions.

As of 1 January 2026, a new environmental protection tax credit will be introduced, titled tax credit for investments and refurbishments aimed at environmental damage remediation and other environmental protection purposes defined by law. The tax credit may be applied in respect of investments or refurbishments with an environmental protection purpose, provided that their value reaches at least HUF 100 million. It may be claimed for the first time for the 2026 tax year, and it applies to investments and refurbishments commenced on or after 1 January 2026. The detailed rules relating to the new tax credit will be set out in a ministerial decree.

The eligible investment purposes under the environmental protection tax credit include, among others, environmental damage remediation, the rehabilitation of degraded natural habitats and ecosystems, and the implementation of nature-based solutions aimed at adapting to or mitigating the impacts of climate change. The eligible costs vary depending on the investment purpose, but in all cases, the acquisition cost of the investment or refurbishment must be taken into account. However, for certain investment purposes, the acquisition cost must exclude the value of the land or any other real estate serving as the site of the investment or refurbishment. In these cases, not only the acquisition cost of the investment or refurbishment must be considered, but also the difference representing the increase in value of the affected land or other real estate resulting from the investment or refurbishment. This increase in value must be determined by an independent expert.

The maximum amount of the environmental protection tax credit – calculated at present value – per taxpayer and per investment or refurbishment, together with all state aid requested for the given investment or refurbishment, is 100% or 70% of the eligible costs, depending on the investment purpose. The tax credit is capped at the HUF equivalent of EUR 30 million.

The environmental protection tax credit may be applied in the tax year of commissioning or in the following tax year, and in an additional five tax years thereafter, up to 70% of the corporate income tax liability. A prerequisite for claiming the tax credit is that the taxpayer must file a notification with the minister responsible for tax policy prior to the planned commencement of the investment or refurbishment. It is also important to note that this tax credit cannot be applied concurrently with any other tax credit.

The tax credit is not available in certain excluded cases, including where the taxpayer qualifies as an undertaking in difficulty or where a recovery order has been issued against the taxpayer that remains unfulfilled.

As of 1 January 2026, the current development tax credit available for investments of strategic importance in the transition to a net-zero-emission economy will be replaced by a new development tax credit for investments ensuring the manufacturing capacity of clean technologies. The new tax credit may only be granted for investments which, in the absence of state aid, would otherwise be carried out outside the EEA. Prior to commencing the investment, the taxpayer must submit a notification to the minister responsible for tax policy.

Where the total state aid requested for the investment, calculated at present value, exceeds the HUF equivalent of EUR 150 million for an investment implemented in Budapest, or EUR 350 million for an investment implemented outside Budapest, the registration of the notification will be decided by the minister responsible for tax policy. In such cases, the taxpayer may apply the development tax credit based on the decision issued by the minister, and only under the conditions set out in that decision. The aid intensity is 15% in Budapest and 35% outside Budapest. Additional conditions for claiming the development tax credit include that the taxpayer must use, for the activity implemented through the investment, the most advanced production technology available on the commercial market with respect to environmental emissions, and ensure that the activity implemented through the investment does not result in the displacement from the territory of the European Union of an existing production capacity or of a production capacity for which a commitment has already been made.

The tax credit may be applied in the tax year of commissioning or in the following tax year, and in an additional 12 tax years, but no later than the 16th tax year following the notification.

A significant amendment provides that, as of 1 January 2026, a taxpayer will be required to pay corporate income tax advances on a monthly basis if its corporate income tax liability for the previous tax year exceeds HUF 20 million (previously: HUF 5 million). If the taxpayer’s corporate income tax liability for the previous tax year does not exceed HUF 20 million, the tax advances must be paid on a quarterly basis. The new rule must be applied for the first time to tax advances determined on the basis of the 2025 tax year liability, provided that the return for that tax year becomes due after 31 December 2025.

Another amendment affects the deadline for paying tax advances. From 1 January 2026, the payment deadline for the fourth quarterly advance for taxpayers obliged to pay on a quarterly basis will be brought forward by one month, from the 20th day of the month following the quarter to the 20th day of the third month of the quarter. For calendar-year taxpayers, this means in practice that the final corporate income tax advance of the year becomes due earlier: the advance for the fourth quarter of 2026 must be paid not by 20 January 2027, but by 20 December 2026.

Amendments concerning the global minimum tax

In line with OECD guidance, the Minimum Tax Act introduces new definitions related to the simplified effective tax rate. However, the detailed rules governing its calculation are not yet available; these will be set out in a ministerial decree, the final version of which has not yet been published.

The Act will incorporate definitions such as simplified covered taxes, qualified country-by-country report, and qualified financial statements.

Amendment to the Accounting Act regarding transfer pricing adjustments

The amendment incorporates into the Accounting Act the legislative intent that, where a taxpayer voluntarily adjusts the consideration up to the balance sheet preparation date, any value within the arm’s length range may be selected for accounting purposes. In other words, the adjustment does not have to be made to the median of the range.

Amendments concerning value added tax (VAT)

As of 1 July 2026, the mandatory data content of the VAT return’s M-schedules will change. Taxable persons will be required to declare on the M-schedule the actual amount of input VAT deducted on the basis of incoming invoices. This information must be provided broken down by VAT rate and by the amount of VAT deducted using a pro rata method, with the possibility to report the pro rata–deducted VAT in aggregate, regardless of whether the taxpayer applies the revenue-based pro rata calculation set out in Annex 5 or a natural allocation key. The data content of the K-schedule will also be expanded: taxpayers will be required to report, by VAT rate, the amount of tax deducted or assessed as payable based on a corrective document. Another amendment effective from 1 July 2026 provides that, in the case of advance payments offset against the final invoice, taxpayers will only need to report the difference resulting from the advance settlement for the specific invoice in which the advance was taken into account.

The turnover threshold for the application of the small business VAT exemption will gradually increase from the current HUF 18 million to HUF 24 million. Accordingly, the maximum cumulative annual value of supplies and services may not exceed HUF 20 million from 2026, HUF 22 million from 2027, HUF 24 million from 2028, if the taxable person wishes to apply the exemption. For each year, the relevant threshold must also have been met in the preceding tax year. From the 2028 tax year, the exemption will again be available – subject to the HUF 24 million threshold – even for taxpayers who previously dropped out of the scheme due to exceeding the turnover limit, without having to wait for the mandatory exclusion period to expire. 

The legislative amendment addresses several practical issues that have arisen since the introduction of VAT group taxation. As of 21 December 2025, the VAT group will no longer be dissolved if the group representative’s authorization ceases and the members fail to appoint a new representative. In such cases, the tax authority will automatically designate the member with the highest tax performance as the new representative. The representative’s authorization automatically terminates by operation of law if the group representative becomes subject to liquidation or compulsory strike-off proceedings, in both cases with effect from the date the proceedings commence. Although the tax authority may audit the VAT obligations of a dissolved VAT group within the statute of limitations, the current legislation does not specify with whom the authority should communicate if the former group representative has also ceased to exist. The amendment clarifies that, in such cases, the former group members who qualified as members during the final VAT return period preceding the dissolution must jointly appoint a representative for the purposes of communication and administration. The amendment also extends the scope of joint and several liability applicable to VAT groups. Once effective, joint and several liability will also cover tax penalties, default penalties and late payment interest related to VAT liabilities arising during the VAT group membership and those declared in the closing VAT return prior to the group’s formation. Joint and several liability continues to apply both to group members and to “outsider members”-entities that would qualify for group membership but choose not to join.

From 20 June 2025, foreign travellers may also demonstrate electronically that goods have left the customs territory of the European Union in their personal luggage. Accordingly, the VAT refund form must now indicate the option to use electronic data content for verification. 

Since 1 January 2025, the eVAT system allows a legal successor to access the legal predecessor’s data and to correct VAT returns submitted by the predecessor through eVAT by way of self-revision. The amendment clarifies that this option does not apply to statutory transfers of public tasks between state or municipal bodies. In such cases, no automatic data transfer takes place to the tax authority regarding the transfer of assets and liabilities; therefore, the transactional-level data required for reconstruction cannot be generated automatically within the eVAT system.

A small but welcome amendment for tripe enthusiasts: from 1 January 2026, a reduced 5% VAT rate will apply to the sale – fresh, chilled, or frozen – of edible meat, slaughter by-products and offal of domesticated bovine animals. For clarity and legal certainty, the VAT Act defines the exact scope of affected products by reference to customs tariff codes.

Although introduced by the Tax Administration Act with effect from 20 November 2025, the following also concerns VAT. In cases of retroactive VAT registration, taxpayers will be required to file the missing monthly VAT returns retroactively, dating back to the effective date of the VAT ID. From the same date, the rules for applying for frequent (monthly) VAT filing status will become stricter: the provision allowing for “exceptional equitable consideration” will be removed, and an application must be rejected if, at the time of submission, the taxpayer is subject to bankruptcy, voluntary dissolution, compulsory strike-off, or liquidation proceedings.

Amendments concerning personal income tax (PIT)

The amendment to the Personal Income Tax Act introduces an administrative simplification regarding advance tax declarations. As of 1 January 2026, mothers who are eligible for the mothers’ tax allowances – namely mothers raising three children, mothers raising four or more children, and mothers under the age of 30 – will no longer be required to submit a new declaration each year in order to claim the benefit. The employer or payer must treat the previously submitted advance tax declaration as continuous until the mother submits a new one. A further simplification is that, from January onwards, a single declaration will often be sufficient, as the declaration relating to the family tax allowance will also include an option for the mother to indicate eligibility for the under-30 mothers’ allowance as well as the allowances available to mothers raising three or four or more children. 

The amendment clarifies the scope of mothers eligible for the relevant tax allowances:

• For the under-30 mothers’ allowance, the restriction requiring that eligibility for the family tax allowance must arise before the mother’s 30th birthday is removed. Accordingly, the allowance may still be claimed even if eligibility – such as the start of pregnancy – arises after the mother has turned 30. The allowance may, however, be claimed for the last time in the tax year in which the mother reaches the age of 30.
• The rules on the personal income tax exemption for mothers with two children are also clarified regarding the age thresholds. Mothers who reach the relevant age exactly on 1 January of the given year will automatically qualify. This means that from 2026, mothers turning 40, from 2027 those turning 50, and from 2028 those turning 60 on the first day of the calendar year will be eligible for the exemption starting in that year.

From 1 January 2026, a significant easing will be introduced for private individuals trading in crypto-assets. The essence of the amendment is that losses arising from crypto transactions in previous years and duly reported in tax returns will become fully deductible without time limitation. Until now, so-called tax equalisation worked only in a restricted manner, as only losses from the tax year and the two preceding years could be taken into account. The current legislative change removes this restriction, enabling individuals to apply any unused, reported loss from any earlier year to reduce the tax payable on future gains. It remains essential, however, that affected taxpayers maintain adequate and detailed records of all transactions, allowing losses to be determined retroactively for any year. The new possibility may already be applied in the tax return for the 2025 tax year, so it is advisable to review documentation from prior years to ensure all necessary data is available.

The scope of tax-exempt income is also expanded: instead of being treated as a specifically defined benefit, amounts reimbursed by a bank to a private individual to compensate for losses arising from fraud affecting the individual’s bank account or payment data will qualify as tax-exempt income (up to the amount of the actual loss). For benefits provided after 31 December 2024, the exemption applies to amounts assumed or reimbursed by another person or organisation to cover the costs of teacher training, such as tuition fees, related meals, accommodation, or travel.

From 1 January 2026, new elements will be added to the system of fringe benefits:

• Housing support for public sector employees (e.g. teachers, physicians): a net annual amount of HUF 1 million may be drawn and used for the repayment of a housing loan or to provide the required equity contribution for such a loan. Although eligibility is granted as a statutory entitlement, employees must submit their application to their employer within a statutory (preclusive) deadline (by 20 January 2026 for loans taken out before 1 January 2026). Based on the application, the employer will request the support from the Hungarian State Treasury for the private individual and will fulfil the related tax obligations as payer. Additional detailed rules regarding the new benefit are set out in Government Decree 361/2025 (XI. 25.).

• Housing allowance for law enforcement personnel: regardless of age, and similarly to the former housing allowance available to individuals under the age of 35, the legislation will allow the rent-based housing allowance provided to members of the law enforcement services to be treated as a fringe benefit. The detailed conditions of this support will be specified in a separate Government Decree.

The amendment temporarily expands the SZÉP Card’s scope of use: between 1 December 2025 and 30 April 2026, balances available on the SZÉP Card may also be used to purchase food items specified in a Government Decree.

The amendment introduces a significant easing for sole proprietors applying lump-sum taxation, implemented in two stages, in 2026 and 2027. The generally applicable cost ratio will increase from the current 40% to 45% from 1 January 2026, and to 50% from 1 January 2027. In practice, this means that taxpayers opting for the lump-sum regime will be able to account for a higher portion of their revenue as costs without documentation, resulting in a more favourable tax base – and in turn, lower tax liability – than before.

The amendment also clarifies the conditions for the tax exemption applicable to shares granted to employees or executive officers of start-ups. Under the current rules, the mandatory three-year holding period required for the exemption begins when the option becomes exercisable. Under the amendment, the three-year holding period will instead start from the date the right is established or from the date of the declaration acknowledging the right. This allows for a tax-exempt sale to occur earlier. The change applies retroactively, covering rights granted after 31 December 2023.

Amendments concerning social contribution tax

From 1 January 2026, an important amendment will affect self-employed individuals and partnerships subject to the minimum social contribution tax base: the 112.5% multiplier, previously used to calculate the minimum social contribution tax base, will be abolished. Under the current rules, self-employed individuals and partners of business partnerships who are insured and have no other parallel legal relationship must pay social security contributions (both social security contributions and the social contribution tax) even if they earn no or only low income. However, the minimum bases differ: the social security contribution must be paid at least on the statutory minimum wage (or guaranteed wage minimum) valid on the first day of the month, whereas the social contribution tax must be paid on 112.5% of the same amount.

From 2026, with the elimination of the multiplier, the minimum social contribution tax base will equal the minimum social security contribution base, meaning that from next year the mandatory base will be 100% of the minimum wage or guaranteed wage minimum.

Also affecting self-employed individuals – and reducing administrative burdens – is the change that, from 1 January 2026, sole proprietors taxed under the entrepreneur’s income tax regime will also be required to declare and pay their social security contributions quarterly (for both social security contributions and social contribution tax), while continuing to report the relevant data on a monthly basis. (Currently this option is only available to lump-sum-taxed sole proprietors.)

Amendments concerning social security contributions

Significant innovations will enter into force in 2026 in the field of social security, aimed at reducing administrative burdens, ensuring more transparent management of insurance relationships, and enhancing digital administration:

Introduction of the “Long-Term Mandate Relationship” as a New Form of Insured Status

As of 1 January 2026, supplementing the existing rules on mandate agreements, a new legal relationship will be introduced: the so-called long-term mandate relationship, which will constitute continuous insured status for social security purposes. The purpose of the measure is to eliminate the practice of month-to-month retroactive registration and deregistration, which has caused substantial administrative and benefit-related difficulties (e.g. eligibility for an A1 certificate).

The main features of the new legal relationship are as follows:

• The employer (client) must register the relationship with the tax authority as a long-term mandate relationship from its start date.
• The insured status is continuous from the commencement of the mandate until its termination, meaning that the mandatary is entitled to health and pension insurance benefits from the creation of the legal relationship.
• The mandator is obliged to pay monthly contributions, based on rules identical to those governing the general minimum contribution base under the Social Security Act (the base is the mandate fee, but at least 30% of the minimum wage).

Establishment of the Complex Legal Relationship Register (KJNY) – Effective 1 October 2026

The KJNY will be a new, unified IT system designed to standardise the management and retrieval of all data related to social security and contribution payments.

The system will allow individuals to view, through a single digital interface: their insurance relationships, their entitlement to healthcare services, their pension contribution payment data and information connected to the European Health Insurance Card.

The KJNY will also support electronic administration through the tax authority’s web and mobile platforms. On the tax authority’s digital interface/mobile app, users will be able to initiate, among other things:

• reconciliation procedures related to healthcare service contributions,
• proceedings concerning disputes over entitlement (e.g. exemption from contribution payment),
• notification and reconciliation of periods of foreign insurance, and
• verification of tax compliance (certificate of no public debt).

Applications will be automatically forwarded by the system to the competent authority (e.g. the National Health Insurance Fund).

Amendments to the Act on the Rules of Taxation and the Act on Tax Administration

In the spirit of administrative simplification, the tax authority will have easier access to data relating to land use, agricultural status, and – from 1 March 2026 – the energy performance certificates of real estate (thereby enabling the estimation of the property’s market value). The tax authority will also be able to conclude joint data management agreements with the National Health Insurance Fund and the State Treasury and will gain electronic access to the National Building Registry. From next year, the tax authority will additionally take over the obligation to register the insured status of sole proprietors with the National Health Insurance Fund.

From 20 November 2025, a person jointly and severally liable for a taxpayer’s tax debt may, upon request, obtain information at any time on the current amount of the public debt for which they are liable.

Going forward, all sole proprietors will be required to fulfil their contribution declaration and payment obligations quarterly.

The rules are further standardised in that any refund claim arising from a provision that has been classified as unlawful (or is likely to be classified as such) by the Constitutional Court, the Curia or the Court of Justice of the European Union may only be submitted by formal request. Consequently, in the future, taxpayers will not be able to initiate claims based on not-yet-published decisions through self-revision. Another harmonising change is that the tax authority will not assess late payment interest below HUF 5,000, even in cases of tax shortfall.

In the case of a final judicial decision, self-revision of a statute-barred VAT liability will only be permitted if the self-revision cannot affect the VAT liabilities of any other taxpayer.

A favourable development for private individuals is that they will be able to apply – under the amended rules – for instalment payments of up to HUF 2 million, for a maximum of 12 months, without late payment interest, even in relation to tax liabilities that are not yet due.

The Act on Tax Administration will be supplemented by the introduction of an automatic decision-making procedure. Similar to the process implemented in the land registry from 2025, where the authority has no discretion and all required documents have been submitted, the decision will be issued rapidly and automatically, without the involvement of a case administrator. As these situations are strictly binary (“black-and-white”), such decisions will not be subject to appeal. This may occur, for example, where a right was enforceable only within a specific deadline that has already expired, or where the obligated person has passed away.

In addition, decisions rejecting an application for justification submitted due to failure to pay the assessed late payment interest will also become appealable.

Amendments concerning the retail tax

At the time of the rate increases in July, the statutory tax bands – unchanged since the tax was introduced in 2020 – were not adjusted. Under the adopted legislative amendment, the retail tax brackets (with the exception of motor fuel retail activities) will increase as follows:

• from HUF 500 million to HUF 1 billion,
• from HUF 30 billion to HUF 50 billion, and
• from HUF 100 billion to HUF 150 billion.

The new tax brackets must first be applied for tax liabilities for tax years starting in 2025.

Due to the increase in the brackets applicable to 2025, it may occur that the advance tax payments made by businesses in July and October 2025 exceed the actual tax liability calculated under the amended thresholds. To address this, the legislator has introduced transitional rules allowing taxpayers to reclaim any excess paid.

Amendments concerning local taxes

The definition of right of pecuniary value under the Act on Local Taxes will be extended to include lessee’s rights under a financial lease and buyer’s rights linked to retained title, both of which have become registrable rights in the land register under property law.

As a result, from 1 January 2026, the holder of such leased or retained-title rights – i.e., the holder of a registrable right of pecuniary value – will become the taxpayer liable for building tax and land tax. At the same time, properties classified as forest land use will be removed from the scope of municipal taxes. These amendments also enter into force on 1 January 2026.

Amendments concerning the small business tax

Under the adopted amendments, the range of businesses eligible to opt for the small business tax regime will broaden significantly. The entry thresholds will be substantially increased:

• the maximum headcount will rise from 50 to 100 employees,
• the revenue and balance sheet total thresholds will increase from HUF 3 billion to HUF 6 billion.

These new thresholds will apply to taxpayers opting into the small business tax regime from 1 December 2025.

The exit thresholds will be adjusted proportionally: from 1 January 2026, the current HUF 6 billion revenue limit will increase to HUF 12 billion, and the permitted average statistical headcount may rise to 200 employees, provided the other conditions are met. As a result, businesses already operating under small business tax may remain in the regime despite growth, without being forced out due to exceeding the previous limits.

It remains important that these thresholds must still be assessed on a consolidated basis with related enterprises, which restricts the ability of subsidiaries belonging to larger corporate groups to opt into small business tax.

Aligned with the amendments to the Social Contribution Tax Act, the minimum personnel-related payment to be taken into account in the small business tax base for members of corporate entities will be the minimum wage itself, rather than 112.5% of the minimum wage as previously required.

From 1 January 2026, electronic money balances will no longer be included when determining the closing balance of the cash register for small business tax purposes.

Amendments concerning the motor vehicle tax

Under the amendment, the scope of the legislation will no longer apply solely to agricultural tractors but will also exclude trailers towed by agricultural tractors.

The valorisation of the tax rates for the 2026 tax year will take place – the applicable rates are available on the tax authority’s website.

Amendments concerning the registration tax

The list of taxpayers subject to registration tax is expanded with a new category. As of 1 January 2026, where the owner and the operator of the vehicle are different persons, the owner will be regarded as the taxpayer. This rule therefore deviates from the general principle under which the person (individual or entity) in whose name the registration is initiated is considered the taxpayer.

As of 20 November 2025, the provision governing the calculation method of the tax for passenger cars equipped with Wankel engines has been removed from the law.

Amendments concerning excise duty

The planned valorisation of excise duty rates on fuels – petrol, diesel and kerosene – will be postponed by six months. The new, increased rates will apply not from 1 January 2026, but only from 1 July 2026. The 2027 valorisation will already be calculated based on these new rates applicable from July 2026.

The rules applicable to small-scale sparkling wine producers are clarified, and a reduced excise duty rate is introduced for them.

Amendments concerning the advertising tax

The suspension of the advertising tax has been extended by another six months, until 30 June 2026. For the tax year that includes 1 July 2026, taxpayers must pay half of the tax advance at one of the payment dates available under their chosen advance payment schedule. For taxpayers whose financial year corresponds to the calendar year, the 2026 tax year will run from 1 July 2026 to 31 December 2026.

The previously known, extremely strict penalty regime has been modified – while maintaining its overall severity:

• Under the new rules, taxpayers without a Hungarian tax number must register with the tax authority within 30 days (instead of the previous 15 days) of commencing advertising activity in Hungary. Registration is completed by submitting Form T201. If the taxpayer fails to register, the tax authority will not impose a penalty in conjunction with the first warning. A default penalty of up to HUF 10 million may be imposed after the 15-day deadline has expired and may be imposed repeatedly every 15 days until the obligation is fulfilled. If the taxpayer complies following the tax authority’s notice, the tax authority will cancel the most recently imposed penalty and may reduce or cancel earlier ones.
• Advertising service providers who fail to issue the required statement to the advertiser may be subject to a HUF 500,000 default penalty, and in the case of repeated failure with respect to the same advertiser, a penalty of HUF 10 million, which may double with each further non-compliance. If the taxpayer complies following the notice, the tax authority may again apply penalty mitigation.
• In case of failure to submit a tax return, instead of the previously presumed HUF 3 billion tax liability, the tax authority will initiate a tax audit and determine the payable tax by estimation.

Amendments to the Act on Duties

The amendments introduce several changes to the rules on duty liability, duty exemptions, and administrative procedures:

• Certification of residential building construction

The suspension of the duty payable on the purchase of a plot may be cancelled not only on the basis of a completion certificate issued by the construction authority but also on the basis of a document attesting to tacit acknowledgment.

As a transitional rule, the amendment also applies to pending real estate cases that have not yet been decided.

• New duty exemption – waiver of shareholder loan in liquidation

A waiver of a loan provided by a shareholder, when carried out as part of a voluntary liquidation process, is exempt from gift duty, provided that the liquidation is completed with the deregistration of the company.

If the court of registration rejects the application for deregistration, the duty assessed but not previously paid must be settled together with late payment interest.

• Amendments relating to residential property ownership

When calculating the duty base, the retrospective period during which the value of a sold property (without deduction for encumbrances) may reduce the value of the newly purchased property increases from three to five years.

In the case of a purchase substituting an exchange, the amendment extends the availability of the duty allowance to persons entitled to a right of pecuniary value.

From January, where an individual exchanges multiple properties or buys/sells several properties within the statutory time frame, the most favourable transaction may be taken into account when determining the duty base. In other words, the taxpayer is no longer restricted to using the immediately preceding or subsequent comparable transaction.

• Agricultural land – easements

The creation of an easement on agricultural land by operation of law does not constitute a breach of the conditions for duty exemption relating to the acquisition of agricultural land.