Amendments to Certain Tax Obligations and Certain Tax Laws

The Parliament of Hungary passed the proposal of tax law amendment and recently the Act on “Amendments to Certain Tax Obligations and Certain Tax Laws” (“the Act”) was published in the Hungarian Gazette. In the following alert, we summarize the most significant tax law changes in Hungary. 

The Act clarifies the legal consequences of a transferring company’s failure to fulfill its holding in cases of partial default. Specifically, it states that the transferring company will only need to increase its pre-tax profit by an amount proportional to the default by the forward-carried and not-yet-taxed profit associated with the preferential asset transfer.

Additionally, the Act states that the rules on the preferential transfer of assets may also be applied in the case of separation, under the Civil Code.

The provisions concerning reported participation will be expanded to include taxpayers who become domestic residents during cross-border transformations. For the first time, these provisions can also be applied to cross-border transformations carried out between January 1, 2024, and the date the provision comes into effect (June 20, 2025), provided that taxpayers report their shares acquired before gaining domestic residence to the National Tax and Customs Administration (NTCA) within 75 days of the provision’s entry into force, if they have not already reported them.

The Act also outlines how the corporate income tax base for companies that maintain their accounting records under IFRS are determined. It states that, in the case of the sale or the exit as a non-cash contribution of the company’s own shares, the pre-tax profit shall be adjusted by the profit or loss recognized at the exit and in previous tax years.

The maximum amount of the tax base reduction item related to the R&D allowance for activities conducted jointly with a higher education institution or research institute will increase from HUF 50 million to HUF 150 million. This new limit can be used by taxpayers for the tax year beginning in 2025.

The Act also includes an amendment concerning tax base adjustment items related to the average headcount of micro-enterprises, both in terms of the upper headcount limit (10 instead of 5 people) and the multiplier number (150% instead of 100% of the minimum wage). These changes are effective from the beginning of the 2025 tax year.

The Act also addresses the global minimum tax reporting obligation, extending the relevant deadline. Domestic constituent entities or the designated local entity will be obliged to submit the declaration regarding their taxpayer status by the last day of the second month following the end of the tax year. This means that for 2025, the declaration shall be submitted to the tax authority by February 28, 2026, using the designated form. In addition, the extended deadline may already apply for 2024 in terms of taxpayers having a fiscal year differing from the calendar year. 

In line with changes to personal income tax laws, the following tax benefits will be introduced or modified:

• Tax exemption for mothers raising three children, starting in October 2025.
• Tax exemption for mothers raising two children. For mothers under the age of 40, exemption will begin from January 1, 2026. For women over 40, the exemption will be introduced in an ascending system until 2029.
• Tax exemption of benefits related to infant care allowance (CSED), childcare allowance (GYED) and adoption allowance (ÖFD) from July 2025.

The benefit for mothers raising children provides tax exemption on income included in the consolidated tax base as listed in the law, while those receiving infant care allowance, childcare allowance and adoption allowance can reduce their tax base by the amount of the benefit.

The rule in Annex 1 of the Personal Income Tax Act regarding tax-free benefits has been amended in relation to staff accommodation in service apartments and workers hostels. In the future, tax exemption can also apply to private individuals employed by foreign enterprises who are housed in properties owned or leased by the branch office of the foreign company, provided all conditions stipulated by the law are met.

Payer entities who provide taxable income to private individuals who are self-entitled pensioners and benefit from tax exemption for mothers — as well as those self-entitled pensioners benefiting from tax exemption for mothers who receive income from an entity which is not considered a payer — must pay a 13% social contribution tax on the portion of the paid or acquired income that exceeds four times the annual average salary.  

In applying this rule, affiliated companies as defined by the Hungarian Corporate Income Tax Act must be considered a single payer. 

As the next step in the ongoing introduction of the new e-cash registers, Decree no. 8/2025 (III. 31.) of the Minister of National Economy on the distribution and operation of e-cash registers and on the requirements for issuing e-receipts entered into force on April 1, 2025. The Act also amends the relevant regulations of the VAT Act and the Act on the Rules of Taxation. Taxpayers may use hardware-based e-cash registers from July 1, 2025, and taxpayers who are currently obliged to use online cash registers can already switch to a hardware-based e-cash register that meets the requirements of the Decree. According to the proposed schedule, from September 2026 a daily data reporting obligation would be introduced for receipts which are not issued by a cash register or e-cash register. From July 1, 2028, traditional online cash registers would be phased out. E-cash registers have the advantage of reducing administration and costs and simplify the obligation to archive receipts. The receipt repository (‘nyugtatár’) stores the data for 10 years.

The first period requiring the indirect customs representative to first fulfil its data reporting obligation on the tax base and tax amount is the VAT return period including October 1, 2025. However, the reporting obligation concerning the importer's tax number, and the import customs procedure identification will not be postponed.

In the case of the services of travel agents, the invoice does not need to specify the taxable amount, or the tax charged. An exception to this rule is when, by the time the invoice is issued, the taxable individual making use of the service declares they are not functioning as a travel agent. Regardless, the obligation to electronically report invoice data concerning the taxable amount and tax applies in every case.

The rules on the application of reverse charge mechanism for sales of gas by a taxable dealer through a natural gas transmission system within the Community or any other network connected to such a system have also changed. Accordingly, the taxable person purchasing gas must declare in advance and in writing to the gas supplier that he qualifies as a taxable trader. In the return, both the supplier and the purchaser must declare the tax number of the partner, the date of supply, the taxable amount of the goods in HUF and the quantity of the goods in MWh; for the first time in the return to be submitted for the period including October 1, 2025.

Online invoice data reporting regulations have also changed:

• online invoice data reporting for invoices issued by the legal successor for the supply of goods or services by the legal predecessor must include the tax number of the legal predecessor,
• in the case of a VAT group, the tax number of the group member involved in the transaction and the tax number of the VAT group must also be indicated.

The data provision deadline for credit institutions and payment service providers is now shortened. Currently, payment service providers must report the opening or termination of a payment account by the 15th day of the following month to the Hungarian Tax Authority. In the case of a change in the bank account number, the reporting must be fulfilled within 15 days. The amendment now specifies a reporting deadline of 7 days. Payment accounts included in the company registry are not within the scope of the data provision.

The regulation regarding the deadline extension of tax audits has been modified in cases where the assessment of the VAT liability requires the audit of several taxable persons involved in a chain of transactions. The head of the Hungarian Tax Authority may extend the duration of the audit once, up to 365 days in the case of reliable taxpayers, and up to 540 days in other cases. In the event of a change in the status of a reliable taxpayer, or where there is a lack of cooperation, the tax audit deadline may be extended once more, up to an additional 540 days maximum.

As of August 1, 2025, taxpayers will again be able to use the consultation option before submitting a binding ruling request, which they will have to initiate electronically. The consultation fee is one million forints.

The fee for binding ruling requests will increase as of August 1, 2025. The default fee will increase to 10 million forints; to 14 million forints in the case of an urgent procedure; to 12 million forints in the case of a contract template; and to 16 million forints for a standard contract in an urgent procedure.

The fee for an Advance Pricing Agreement (APA) procedure will also increase. In a unilateral procedure, the fee will rise from 8 million forints to 10 million forints, and in a bilateral or multilateral procedure from 12 million forints to 14 million forints. The fee for a consultation prior to the APA procedure will increase to 1 million forints per consultation.

The taxpayer will not be entitled to a refund of the procedural fee in any circumstances if the request for the APA is rejected, or if the procedure is terminated, or if the request is refused.

If the taxpayer initiates a bilateral or multilateral procedure in a unilaterally initiated procedure, the taxpayer will be obliged to pay the APA fee for the bilateral or multilateral procedure. If the taxpayer initiates a unilateral procedure in a procedure initiated bilaterally or multilaterally, the taxpayer will be obliged to pay the APA fee for the bilateral or multilateral procedure.

The Act on the Rules of Taxation did not impose any sanctions related to the requirement to provide information about top-up taxes ensuring compliance with the global minimum tax rate. However, this practice has been changed, namely based on the Act the tax authority may levy a default penalty of 10 million forints if the taxpayer does not supply information concerning the top-up taxes to meet the global minimum tax requirements, or if the information is provided late, incomplete, inaccurate, or contains false data.

The existing provisions of the Tax Administration Procedure Act regarding representation will be supplemented to allow the tax authority to appoint a trustee for taxpayers undergoing compulsory liquidation without representation.

The Act complements provisions concerning the recording of procedural actions by including regulations on the signing of electronic minutes and the verbal communication of the findings of the minutes, as well as notification about rights and obligations. Should the participant refuse to sign the electronic protocol, the refusal can be proven by the presence of two official witnesses. As a result, the tax audit would continue according to the general rules.

The provisions relating to the completion of the audit will be supplemented by the rules applicable to the preparation of electronic minutes. According to the Act, the date of completion of the audit is as follows:

• for taxpayers obliged to use electronic administration and with an activated user profile, the minutes are the date when the minutes are sent to the electronic company gate of the taxpayer,
• for taxpayers who are not obliged to use electronic administration and do not have an active user profile, the date on which the electronic minutes are sent at the official contact details reported by the taxpayer in the disposition register, or in the absence thereof, the date of posting the authentic paper copy of the electronic minutes.

Among the decisions eligible for appeal, the Act points out that no appeal is permitted against a decision concerning the certification and licensing procedure carried out by the NTCA, except by means of an administrative lawsuit.

In line with the Act, moving forward, the portion of a property’s market value related to the value of a solar or wind power plant structure will be exempt from real estate transfer tax. It is important to highlight that once the amendment enters into force (July 20, 2025), the new rule will also apply to pending transfer tax procedures.

The Act incorporates the regulations concerning extra profit tax (bank surtax) on credit institutions and financial enterprises regulated at the level of emergency decrees into a parliamentary act.  The bank surtax will remain applicable from the start of the 2026 tax year, but its rate will increase. The tax rate will be set at 8 percent for the taxable amount up to 20 billion forints, and 20 percent for any amount exceeding that.

Based on the Act the increased rate of the Robin Hood tax regulated in an emergency decree is incorporated into the respective law itself.  The Robin Hood tax rate remains 41 percent in 2025. However, as of 2026, the tax rate will be reduced to 31 percent.

The rules on supplementary insurance premium tax, which was regulated by emergency decrees, is also incorporated into the Act on Insurance Premium Tax. The increase of the effective tax brackets for the insurance premium tax, which have been considered temporary and which were extended from time to time, will be made permanent. Furthermore, the supplementary insurance premium tax liability will remain applicable in 2026.

A significant update is that from 2026 the available tax on the supplementary insurance premium tax will increase from 30 percent to 60 percent of the increment in the nominal value of the government bond portfolio.

The provisions of the emergency decree concerning the higher retail tax rate will be incorporated into the respective Act. The Act extends the applicability of the retail tax with the higher tax rates to the tax year starting in 2026.

The Act introduces another amendment. For payment transactions performed by electronic money issuing institutions, any debits made to electronic money accounts which are used for electronic money issuance and redemption, if initiated via customer-initiated payment orders, will also be subject to the financial transaction tax.