On 4th July 2023, the Parliament of Hungary passed the draft tax law amendment (“the Act” or “the Modification”). This bulletin summarizes the most important changes that will come into force regarding tax legislation in Hungary.

Personal Income Tax

  • Fiduciary Asset Management/Trust: According to the Modification and in relation to Trusts, the transfer of an asset made within the legal relationship of an asset management shall be deemed a sale at the settlor’s end. Accordingly, the transfer of an asset constitutes a sale, which may entail tax liabilities on the settlor’s side; for this purpose, the value at which the Trust booked it in its accounting records shall be deemed as the revenue from the sale. Such potential income on the settlor’s end must be determined in accordance with the prevailing principles of the Act on Personal Income Tax (PIT).
  • Furthermore, the abovementioned value of the non-monetary asset (e.g., a limited company’s business share previously provided by the Trust) shall prevail as cost/input value in the case of any subsequent sale made by the Beneficiary to a third party.
  • In addition, the Modification specifies the definition of dividend in relation to the Trust being the value transferred from the Trust’s reserve. It is worth noting that the value provided from the capital of the Trust is free of tax, while benefits deemed to be dividends are taxable per the principles of the Act on PIT.
  • Vehicle tax: The Modification amends the deadline of paying vehicle tax: instead of two separate payments (15 April and 15 September), vehicle tax will be due in a single installment (15 April).
  • Income declared for flat-rate taxation (PIT Act): The Modification adds driving schools to the list of activities where 80% cost or expenses write-offs are to be used.
  • The Modification incorporates certain rules that were previously regulated in Government Decrees in case of states of emergency:
    • Abolition of simplified contribution to public revenues (Ekho) on the payers’ end
    • Unification of different SZÉP-card subaccounts and the adjusting of the allowance’s cap (HUF450 000)*
    • Introducing tax allowance for mothers under the age of 30
    • A simplified employment calculation base linked to minimum wage

*It is important to note that Government Decree no. 237/2023. (VI. 19.) effective 1 August 2023 deems a single payment made to the employee’s SZÉP-card until 31 December 2023 with the maximum amount of HUF200 000 as income charged with payer’s tax, irrespective of the above cap. In addition, SZÉP-card holders may purchase food from vendors until 31 December 2023.


Corporate income tax:

  • The definition of a company holding real estate converted from agricultural land will be clarified to include the case where a company acquires real estate converted from agricultural land after the balance sheet day and then the member of the company sells/derecognizes its shareholdings in the same year. This rule would apply to shareholdings sold or derecognized after the law enters into force.
  • The Modification introduces a new, temporary tax allowance where a strategically significant investment for the purpose of transformation to a net-zero emission economy is made. Said allowance applies to investments aimed at manufacturing equipment such as batteries, solar panels, wind turbines, heat pumps, electrolyzers, carbon capture, and storage devices, as well as the production of key equipment directly used in their manufacturing and the production or recovery of raw materials associated with their manufacturing. In order to qualify for the tax allowance, the taxpayer must submit an application to the Minister in charge of taxation prior to commencing the investment, which should be judged until 31 December 2025 the latest.
  • The  loss carry-forward rule related to the release of a liabilities in connection with a bankruptcy or liquidation proceedings—currently being regulated by a government decree—will be incorporated into the law.
  • The amount of donation given to National Solidarity Donation Account (“Nemzeti Összefogás”) will be recognized as tax-deductible expenditure in the corporate income tax base without the need for a separate certificate.
  • According to the Modification, the non-deductibility of certain advertising costs (currently qualifying as non-business-related expenses) will be abolished.
  • The time limit rule on the utilization of carry-forward tax losses generated up to the last day of the 2014 tax year (previously it was 2030) will be cancelled; thus, these losses will be available for utilization without any time limit.


Financial enterprises tax (bank tax)

  • The Modification now incorporates into law the rules on certain tax exemptions of financial enterprises on extra profit surtaxes, which was  previously regulated by the Government Decree.


Robin Hood Tax

  • The scope of taxpayers will be extended to include traders selling petroleum products in Hungary that have been purchased abroad. The above-mentioned taxpayers should divide their tax base in proportion to the petroleum products purchased from Hungary and abroad. A specific obligation will also be imposed to keep separate records of such petroleum products and of the apportionment.


Innovation Contribution

  • The tax base of ‘innovation contribution’ will be aligned with the local business tax base from a transfer pricing point of view; therefore, the arm's length price that should be taken into account for the purposes of the tax base of innovation contribution would subsequently need to be determined according to the transfer pricing methodology prescribed by the Corporate Income Tax Act.
  • Pursuant to the new rules, small business taxpayers (who are liable to pay innovation contributions) can choose to determine their innovation contribution tax base on the basis of their simplified local business tax base. This option is valid for the tax year in question and must be declared no later than the deadline prescribed for filing the innovation contribution return. This new innovation contribution tax base determination method may be applied for the first time for the 2023 tax year.



  • As of January 2024, a new chapter will be added to the VAT Act in order to regulate the VAT aspects of the Deposit Refund System (DRS), to be introduced next year. The return fee of non-reusable products subject to the DRS fee will not form part of the tax base of the supply of goods; the return fee will therefore be treated as falling outside the scope of VAT. For this reason, the tax base cannot be subsequently reduced as a result of the return of the product and re-payment of the return fee. If, however, the product concerned is not returned, a tax liability arises on the side of the taxable person operating under DRS. The operation of the new system and the relevant VAT rules raise a number of practical questions. There is no change in the rules for goods subject to the regular deposit fee (“betétdíj”). Accordingly, the deposit fee of such goods will remain part of the VAT base.
  • The Modification sets out the framework for the eReceipt concept (an electronic slip which can be issued by retailers), scheduled to be introduced by July 2024. To this end, the VAT Act and the Act of the Rules of Taxation will both be changed. The detailed rules will be laid down in a ministerial decree at a later stage.
  • The rules for the deadline for issuing invoices will change from 1 January 2024. As such, an invoice must be issued immediately if the payment of consideration is made by the settlement date (or, in the case of the application of issuing daily summary invoices, by the date of supply). The new time limit must be respected regardless of the means of payment (i.e., from January 2024, if the payment is made by the above deadline, the invoice must be issued immediately, not only in the case of payment by cash or cash substitute).
  • The Modification clarifies that a withdrawal from a VAT group is to be treated as a termination by succession.
  • The Modification allows for the transferee of a governmental task to be considered as a legal successor for VAT purposes. Accordingly, if the transferee meets the specific conditions of succession set out in the VAT Act, the transfer does not trigger VAT payment liabilities. In line with the rules on succession, the transferor and the transferee are jointly and severally liable for the VAT incurred up to the date of the transfer in such case as well.
  • Under the special VAT refund procedure for non-established taxable persons, input VAT incurred on a domestic purchase of immovable property can be reclaimed (provided that the taxable person otherwise meets all the underlying conditions). The new rule constitutes a change to harmonization purposes and applies to taxable persons established within the EU and to purchases where the VAT is due after 31 December 2021.
  •  The Modification clarifies the rules on the quarterly reporting obligations of payment service providers, which will enter into force on 1 January 2024, and adds special provisions of penalty to the Act of the Rules of Taxation in the case of non-compliance.
  • In order to properly support the fulfilment of online invoice data provision, a new stipulation of the Act of the Rules of Taxation requires the Tax Authority to notify the developer of the invoicing software on the system messages and tax number of the taxpayers concerned in the case of incorrect data provisions, in order to identify the reasons and to correct them.
  • As of 1 January 2024, the tax rate for publications issued at least four times a week (e.g., daily papers) is 0%.


Excise tax

  • As from 1 January 2024, the tax rate for fuels will increase in line with the EU minimum tax level, and the tax rate and tax relief for commercial diesel and agricultural diesel will also be adjusted.


Public health product tax (also known as “chips tax" or NETA)

  • The Modification moves the currently effective regulations included in a governmental decree to the level of the NETA act, without any changes.



  • At present, it is not technically possible to amend customs declarations before the goods are released for exit (only to cancel them), but the Modification makes it possible that the cancellation of export declarations does not necessarily trigger a customs administrative penalty.


Local Business Tax

  • The definition of permanent establishment will be extended. Resultingly and in the case of airlines, airports and the departure point of flights are also considered to be permanent establishments. The Modification also defines that an entrepreneur can be considered performing air passenger transport if 75% of its net revenue in the tax year comes from air passenger transport and related services. Furthermore, the definition of net revenue applicable to foreign-based airlines is clarified, including the consideration payable for utilizing passenger transport flights departing from Hungary and related services. In this way, the Modification also supplements the Annex of Local Tax Act with a specific method of tax base allocation for air passenger carriers.
  • The  definition of a permanent establishment of temporary work agencies will also be explicitly formulated, according to which every municipality where the total number of hours worked by the leased employees reaches at least 21 000 within the tax year is considered a permanent establishment.


Vehicle tax

  • An association or foundation is currently exempt from vehicle tax in the year in which it owns a vehicle if it had no corporate income tax liability in the preceding year. The Modification extends this tax emption rule to cases where the association, foundation or public body is only operating a vehicle without owning it. In connection with this, the legislation sets two conditions that should be met.
  • Finally, the existing exemption provision currently applicable to vehicles owned by associations or foundations is to be extended to vehicles owned by public bodies as well.


Real Estate Transfer Tax (“RETT”)

  • The Modification incorporates into law the rules previously regulated in Government Decrees for the emergency period. Namely, it extends the possibility of applying the reduced tax rate (2%) in cases where a credit institution acquires real estate property from its debtor undergoing a reorganization or restructuring procedure. No other changes have been made in relation to RETT.


Financial transaction tax

  • As in the above cases, the rules that were previously regulated in Government Decree for the emergency period will be incorporated into law. Therefore and in practical purposes, the same rules will continue to apply.
  • However, according to an addition to the law, the purchase of financial instruments is exempt from financial transaction tax if the owner of the client account (securities account) is exclusively a natural person, legal entity, or other legal arrangement (such as a company, civil law partnership agreement, trust asset management agreement, or foundation) being deemed as a tax resident of another EU member state, or another state based on the tax legislation of that state.


Act on the Rules of Taxation

  • In future, vehicle tax should be paid in a lump sum by 15 April instead of the current two instalments. Taxpayers who are unable to pay it in a lump sum may apply for a partial payment option under certain conditions.
  • In line with current goals, online cash registers will be progressively replaced by other technical devices/solutions capable of issuing electronic receipts. In this respect, the Modification introduces a number of new concepts, such as e-cash register (“e-pénztárgép”), e-receipt (“e-nyugta”), receipt storage (“nyugtatár”) and receipt storage service provider (“nyugtatár-szolgáltató”). In addition, data reporting obligations to the National Tax and Customs Administration and to the receipt storage service provider will also be introduced in relation to the e-cash register. The rules on e-cash registers will enter into force on 1 July 2024.
  • The possibility of binding ruling request will be extended to cover contracts having the same features, for a fee of HUF10 million. In addition, the fees of the existing ruling request procedures will also be modified, increasing from HUF5 million to HUF8 million under normal circumstances, and from HUF8 million to HUF12 million in case of an urgent procedure.
  • In the event that the economic activity of a taxpayer subject to VAT changes during the year in a way that the taxpayer would exclusively carry out an activity not giving rise to VAT deduction or would be engaged solely in agricultural activities under special legal status with a consequential change to tax return frequency from annual or quarterly to monthly, then the respective taxpayer will be required to file an interim/extraordinary tax return.
  • In relation to the emergency government decrees, the decree on the payment of corporate income tax and local business tax in a foreign currency will be incorporated into legislation.
  • The list of factors not affecting the qualification of a reliable taxpayer will include enforcement proceedings based on a request for the enforcement of small amounts (not exceeding HUF100 000). This extension prevents the disproportionate disadvantages associated with the loss of reliable taxpayer status. Additionally, the Modification will also change the assessment conditions for the qualification of the taxpayers being current or former members of a CIT tax group.
  • Only taxpayers with more than HUF30 000 in public debts or with a net tax debt of more than HUF5 000 will be excluded from the database of taxpayers without public debts.


Act on the Regulation of Tax Administration

  • The definition of tax procedure is extended in order to ensure that authorization procedures related to the e-cash register system can be carried out.
  • The minimum subscribed capital of fiscal representatives will be increased from HUF50 million to HUF150 million.


Government Decree on Extra Profit Surtaxes

  • Provisions to be incorporated into various tax laws will be abolished in the decree.


Contribution of Airlines

  • The contribution of airlines was introduced originally as an extra profit tax under the respective government decree, but these rules now get a “Green Tax” tag, while being incorporated into a new law.

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