2025-15-10
The Ministry for National Economy has released the draft of the autumn tax package (hereinafter referred to as the ‘Draft’) for public consultation, which contains numerous amendments simplifying tax administration and harmonizing legislation. Our newsletter provides a short summary of the Draft’s main amendments.
Personal Income Tax
According to the Draft, the possibility of tax equalization would be extended in the case of income derived from transactions involving crypto assets. Unlike the current regulation, which only allows for the consideration of losses incurred in the two years preceding the tax year, losses incurred in any previous year that were declared as losses in the tax return but have not yet been accounted for as tax equalization could be used for tax equalization purposes.
Under the Draft, a woman with a child is considered a mother under 30 if she is not yet 30 on the first day of the year in which she qualifies for the family allowance under the Personal Income Tax Act for her foetus, biological, or adopted child.
Social Security
The Draft would expand the definition of ‘insured person’ to include individuals working under a long-term mandate arrangement, provided they are not classified as engaging in supplementary activity. A mandate arrangement is considered ‘long-term’ if the employer has registered it as such with the Hungarian Tax Authority.
Corporate Income Tax
The Draft proposes amending the legislation so that, following the selection of the new type of R&D tax incentive, the decision on applying the tax incentive may be reconsidered after five years instead of six. This aligns with the current regulation, under which the election is valid for five years. According to the current wording of the Draft, R&D activities carried out under a written agreement with a higher education institution, the Hungarian Academy of Sciences (MTA), or a research institute that is — even indirectly — state-owned, would also be eligible for the tax incentive at the standard rate. This allows 10% of eligible R&D costs to be claimed as a tax incentive, with the existing upper limit of HUF 500 million remaining in effect.
Global Minimum Tax
The Draft would establish at the legislative level how the simplified effective tax rate test should be performed, based on which domestic constituent entities could benefit from the Transitional Safe Harbor rules. Following OECD guidelines, the numerator of the simplified effective tax rate would be based on the qualified financial statements (including both consolidated and individual financial statements), while the denominator would be based on data from the qualified CbC report.
In addition, the annex related to the transitional relief for the substance-based income exclusion would be amended to align with the original OECD Model Rules. Under the Draft, the income exclusion for eligible payroll costs and the book value of eligible tangible assets would be calculated using lower percentages than those currently in effect. For example, for 2024, the rates would be 9.8% and 7.8%, instead of the current 10% and 8%.
The key question remains which transitional rules will be associated with the Draft, given that, under its current wording, the relief amount would be reduced retroactively.
Value Added Tax
The Draft would also see the provisions on VAT group representation being amended. This would allow the tax authority to appoint the group representative in certain circumstances.
The rules on the joint and several liability of group members would be specified: according to the Draft, members shall also be liable for the legal consequences applicable under the Act on the Rules of Taxation due to any breach of their obligations under the VAT Act. The Draft also regulates the rules governing the application process for joining a VAT group in cases where a member outside the group is terminated with legal succession.
Under the Draft, from 2026 onwards, the Domestic Purchases Listing (Page ‘M’ of the VAT return) must be submitted with more detailed data, including the amount of tax deducted.
Tax Procedural Rules
The Draft provides that if a VAT obligation is fulfilled through retrospective registration (change notification), returns must be submitted for any periods not previously covered by the return, taking into account monthly tax assessment periods.
A change is also anticipated in relation to the statute of limitations. In connection with the right to a tax assessment, the Draft would amend the provision according to which the taxpayer is entitled to submit a self-audit in respect of a tax assessment period that has already expired in order to settle his tax obligation, provided that the court issues a final decision on the matter beyond the statute of limitations for the right to a tax assessment. However, the Draft specifies that a self-audit cannot be submitted for an expired tax assessment period if it may also affect another taxpayer’s VAT obligations.
Currently, taxpayers may amend or withdraw their taxpayer’s application before a decision becomes final. Under the Draft, once the amendment takes effect, taxpayers would only be able to amend or withdraw their application until the tax authority initiates action to communicate its decision.
According to the Draft, the option to submit a self-audit under Section 195 of the Act on the Rules of Taxation, previously permissible on grounds of illegality of legislation, would be abolished. In its place, taxpayers would be able to submit an application to reduce their tax liability. The deadline for assessing the application would be fifteen days, similar to self-audits.
Insurance Tax
Under the Draft, the basis for the advance payment of the supplementary insurance premium tax would be revised. The premiums from life insurance policies would also have to be taken into account when calculating the supplementary tax base.
Retail Tax
The Draft would extend the special tax rates applicable for retail sales of motor vehicle fuel for any tax year beginning in 2026.
Advertisement Tax
The Draft would maintain the 0% tax rate until 31 December 2026.
Act on Accounting
Under the Draft, from 2026 onwards, related parties would be permitted to record retrospective price adjustments — affecting assets, revenues, and services — in their accounting records only if these adjustments are accounted for by the balance sheet preparation date, to prevent any alteration of the corporate income tax base. However, this rule could already be applied in the financial statements prepared for the 2025 tax year.
We wish to draw our Client’s attention to the fact that, according to information provided by the Secretary of State for Taxation, an additional tax package is expected this autumn. Furthermore, please note that last night the Government submitted the bill to the Parliament based on the Draft. We will inform you about further developments regarding these in a separate newsletter.
KPMG experts are monitoring these legislative changes and are ready to assist you in interpreting them and assessing the impact on your business.
