Hungary

The following significant changes were recently introduced in the Hungarian tax system. The changes are mainly related to corporate income tax (CIT), personal income taxes (PITs) and related contributions, indirect taxes, and the implementation of global minimum tax.

Rules of taxation

Penalties

From 1 January 2025, the maximum amount of default penalty increased from 200,000 to 400,000 Hungarian forints (HUF) for taxable natural persons and from HUF 500,000 to HUF 1 million for other taxpayers.

Timeframe of a tax audit initiated concerning a taxpayer, which shall be considered as unreliable

According to the rules in affect prior to the latest update of the respective document, where a taxpayer is considered unreliable during any period audited by the state tax and customs authority, or in a fraction of such period, or during the audit or any part thereof, the time limit for such audit shall be extended by 60 days.

Nevertheless, as of 28 February 2024, if liquidation, dissolution proceedings are commenced at an unreliable taxpayer during an audit in progress, or the liquidation, dissolution proceedings are concluded with continuation of the taxpayer’s activity in an audit in progress, the time limit of audit shall be calculated in accordance with the rules applicable on the start date of the audit.

Non-compliant fulfilment of payment services providers’ general obligations under the Value-added Tax (VAT) Act

As of 1 January 2024, the state tax and customs authority may impose a default penalty of up to HUF 5 million on the entity required to keep records, supply data, and retain records in case of non-compliance or late, erroneous, or incomplete compliance with the obligation of keeping records as specified in the VAT Act. However, no default penalty shall be imposed if the entity required to keep records, supply data, and retain records exculpates its non-compliance or late, erroneous, or incomplete compliance by certifying that it has acted as it may be usually expected in the given situation.

Violation of the rules with regard to cash registers and customer application

As of 1 January 2024, the tax authority imposes a default fine of up to HUF 10 million on the distributor for the distribution of an e-register or customer application without an authorisation or for the distribution of an e-register or customer application other than an authorised one. Moreover, the tax authority may impose a default penalty of up to HUF 500,000 on natural persons and up to HUF 1 million on non-natural persons in the event of a breach of the statutory obligations relating to the mandatory use, distribution, and operation of registers. The tax authority may impose a default fine of up to HUF 1 million on the distributor if it has not attempted to repair the hardware-based e-register within five days of receiving the operator's notification.

As of January 2025, state tax and customs authority shall impose a default penalty amounting up to HUF 10 million on the distributor in the case of distributing e-cash registers, buyer applications without a marketing authorisation, continued distribution of e-cash registers, buyer applications after withdrawal of the marketing authorisation, distribution of e-cash registers, and buyer applications differing from the ones authorised. They may impose a default penalty amounting to HUF 500,000 on the obliged person in the case of natural persons or up to HUF 1 million in the case of non-natural persons in the case of a violation of obligations determined by legal regulations with respect to the obligatory use, distribution, or operation of e-cash registers.

The state tax and customs authority may impose a default penalty amounting to HUF 1 million on the distributor if they have not tried at repair of the hardware-based e-cash register within five days from receipt of the operator’s indication by the distributor. In the case of violation, the obligations of servicing hardware-based e-cash registers, the state tax and customs authority may impose a default penalty amounting to HUF 1 million on the distributor, manufacturer.

Obligation to issue e-receipts

As of January 2025, an e-receipt shall be considered issued when admitted to the receipt repository.

Content of receipts

As of January 2025, receipts shall contain the following details in addition to the already existing obligatory details: the description of the goods supplied, the global trade identification number, where applicable, and the quantity of the goods, description of the services rendered, and the extent and nature of the services rendered if it can be expressed in some unit of measurement.

Documents treated as receipt

As of January 2025, any document, other than receipts, that contains information and amends and refers specifically and unambiguously to the initial receipt shall be deemed equivalent to the receipt.

The documents treated as receipt shall contain at least the following information: the date of issue; a sequential number, which uniquely identifies the document; reference to the initial receipt that is being amended by this document; and an indication of the detail that is being amended, and the reason for the amendment, including any revision of numbers, where applicable.

Arm’s-length principle

The taxpayer is not entitled to a refund of the fee for the procedure aimed at determining the arm's-length price in the cases listed in the new provisions of the law. Such cases include situations where the foreign affiliated company of the applicant does not accept the agreement reached between the competent authorities or when the application is withdrawn, and the procedure is terminated in specified cases.

A new provision has been added to the law related to the procedure for determining the arm's-length price. According to this provision, if the taxpayer initiates a bilateral or multilateral procedure in a unilaterally initiated procedure, the taxpayer is required to pay the fee for the bilateral or multilateral procedure. Similarly, if the taxpayer initiates a unilateral procedure in a bilaterally or multilaterally initiated procedure, the taxpayer is still required to pay the fee for the bilateral or multilateral procedure.

Another change related to the application for determining the arm's-length price is that the fee for preliminary consultation is increased to HUF 1 million per consultation.

Payment services providers

According to the amendment to the law, the payment service provider managing the payment account is now required to notify the tax authority of the opening and closure of a payment account within seven days following the respective date, including the payment account identifier.

Biometric signatures

The Act is supplemented with data protection provisions related to biometric signatures (handwritten signatures collected electronically) recorded by the tax authority.

Duration of tax audits

Among the benefits for reliable taxpayers, the rule concerning the duration of tax authority audits has been amended. Under the new provision, in addition to the previous 180-day deadline, the head of the tax authority can extend the deadline for a tax audit conducted for a reliable taxpayer to a maximum of 365 days on one occasion if the determination of VAT liabilities requires the audit of multiple taxpayers involved in a chain of transactions. For other taxpayers, the deadline can be extended up to a maximum of 540 days.

Fees for applying for binding rulings

The official fees for applications aimed at binding ruling have increased: for standard contracts, the fee for evaluation in a regular procedure is HUF 12 million (HUF 16 million for evaluation in an expedited procedure). In other cases, the procedure fee is HUF 10 million (HUF 14 million if the application is evaluated in an expedited procedure). The recently reintroduced preliminary consultation is also subject to a fee, as before, and the fee will now be HUF 1 million per consultation.

Shareholder transfer

A member or shareholder transferring their shareholding is limitedly liable for the proportion of the uncollectible tax debt of the legal entity that corresponds to the transferred shareholding and can be ordered to pay the associated tax by a decision. According to the amendment, the tax authority can make the decision within a forfeiture period of 120 days from establishing the unsuccessful collection of the tax debt, instead of the previous 90 days. If the transfer of the shareholding becomes known to the tax authority after the deadline for making the decision has passed, the tax authority can still make the decision within 60 days from acknowledgment, instead of the previous 30 days, even if the forfeiture period has already expired or less than 60 days remain.

Global minimum tax (GloBE)

The penalties for non-compliance with the reporting and declaration obligations related to additional taxes ensuring the global minimum tax level have not changed. However, according to the amendment, the tax authority can now impose a fine of HUF 5 million for incorrect or late fulfilment of the notification obligation under the Global Minimum Tax Act and - HUF 10 million for failure to fulfil data reporting obligations, or for delayed, incomplete, incorrect, or false data submissions.

Please note that in case of non-compliance for tax years starting before 31 December 2026, the penalty cannot be imposed if the filling entity proceeded with due care and diligence.

E-cash registers

With the permitted installation of e-cash registers from July, the penalties for violating the related regulations have also been defined in the Act, in line with the current penalties for traditional cash registers. In this context, alongside the maximum fines that can be imposed for breaches related to cash registers and customer applications, the sanction of a mandatory 12-day business closure for violations related to the obligatory use and operation of cash registers has also been extended to e-cash registers.

Corporate income tax (CIT)

Global minimum tax: New notification obligation

Hungarian constituent entities are obliged to submit a notification form to the tax authority regarding their Pillar Two status. The notification form must be submitted by the last day of the second month following the end of the tax year as of June 2025 and every year thereafter (i.e. by 28 February 2026 for calendar year taxpayers for 2025).

Prior to June 2025, the deadline for the notification obligation was different. It required submission within 12 months from the start date of the tax year beginning in 2024 (i.e. by 31 December 2024 for calendar year taxpayers).

QDMTT advance return

Hungarian constituent entities are required to submit a QDMTT advance return by the 20th day of the 11th month following the end of the tax year. For example, for constituent entities that are part of a multinational enterprise (MNE) group preparing consolidated financial statements on a calendar year basis, the QDMTT advance return for the 2024 tax year must be submitted to the Hungarian tax authority by 20 November 2025.

Filing the advance return is mandatory even if the entity has no QDMTT liability, for instance due to the application of exemptions or a nil tax base.

Energy suppliers' income tax: New tax incentive

As of 1 January 2026, distribution network operators will be eligible to claim tax incentives from the payable energy supplier income tax for investments that focus on the modernization of energy infrastructure. These incentives may be applied in the tax year in which the asset is commissioned and for the subsequent five tax years. The maximum amount of the tax incentive, calculated at present value, is capped at 50% of the difference between the eligible investment cost and adjusted depreciation. The energy supplier income tax can be reduced by the tax incentive for energetic development investments, up to 80% of the tax calculated with the deductions of development tax credit and energy efficiency related tax credit. A key requirement is that the assets remain in operation for a minimum of five years and fully adhere to the conditions specified in the applicable ministerial decree.

R&D tax incentive related developments

The general portion of tax incentive remains 10% of the eligible costs in case of R&D related tax incentives. However, up to HUF 500 million, in case of R&D projects carried out jointly with the Hungarian Academy of Sciences, or research institutes established by them, the tax incentive can reach 100% of eligible costs  for the research activity. In case of applied industrial research this proportion is 50% of the eligible costs and in case of experimental research the 25% of the eligible costs.

Development tax incentive: New investment opportunity has been introduced

Based on the recent change in legislation the new opportunity (investment aimed at ensuring the manufacturing capacity of clean technologies) of development tax credit should be reported to the minister responsible for tax policy before commencement, and the amount of tax credit may be up to 15% of the eligible investment costs in Budapest, and up to 35% outside Budapest.

New tax incentive for investments and renovations aimed at eliminating environmental damage and other specified environmental objectives

Starting in 2026, a new category of tax incentive has been introduced for environmentally focused investments exceeding HUF 100 million net present value. Eligible projects may include the remediation of environmental damage, habitat restoration, biodiversity protection, or the implementation of climate-related initiatives.

The incentive amount varies by investment type and may cover up to 100% of eligible costs, while in other cases it is capped at 70%, with an overall limit of EUR 30 million. For small and medium-sized enterprises, this percentage can be further increased.

To qualify, the investment must be reported prior to commencement, and in certain cases, an independent expert certification will also be required.

Local business tax (LBT)

Change in the subject of the permanent establishment (PE) definition for air passenger transport entrepreneurs

On 1 January 2024, the definition of PE in The Act C of 1990 on Local Taxes was expanded. As a result, entrepreneurs who perform air passenger transport activities are subject to LBT in the jurisdiction of the local municipality where there is an airport from which these entrepreneur's flights depart, irrespective of not having any fixed establishments there. Additionally, due to the PE triggered for LBT purposes, airlines would also be subject to innovation contribution, which is calculated as 0.3% of the same tax base.

As of 1 January 2025, the scope of affected entrepreneurs has been narrowed. According to the changes, those entrepreneurs who are resident in a state that is a party to the Convention on International Civil Aviation opened for signature in Chicago on 7 December 1944 are excluded from the scope of the PE definition.

Value-added tax (VAT)

The introduction of the Deposit Refund System (DRS) in relation to the Hungarian Act on VAT

In connection with the DRS, the range of goods to be introduced as of 1 January 2024 will be metal, plastic, and glass beverage packages with a capacity of 0 to 6 litres (with the exception of milk-based beverage products).

HUF 50 liability (non-reusable i.e., PET bottles):  According to the specific rule of the Hungarian Act on VAT, the mandatory (HUF 50) fee is not part of the VAT base, meaning it does not increase the VATable amount of the supply. The fee must be listed as a separate item on the invoice out of the scope of VAT.  When the consumer redeems the HUF 50 fee - as the fee is out of the scope of VAT - does not affect the VAT base. Accordingly, no corrective invoice is required in such cases.

Adjustable fee (reusable and voluntary i.e., glass bottles and pallets):  The Hungarian Act on VAT does not specify particular provisions regarding these items, so their supply must be included in the VAT base according to the general rules of supply of goods. If these products or packaging are later redeemed by the consumer, the VAT base can be reduced retroactively. To do so, a correction invoice must be issued in this regard.

According to the Act on VAT, unreturned products shall be regarded as supply of goods. The chargeable event shall occur, and VAT shall become chargeable on the last day of the calendar year. The taxable amount means the return fees on products not returned by the date of the chargeable event, and the return fees on unreturned products shall be applied as it contains the VAT payable as commensurate.

According to the new provisions, VAT shall be payable by the taxable person operating a binding return fee scheme.

Changes in VAT rates and VAT exempt cases

• The definition of infant formulae under the 5% VAT rate was clarified based on the customs tariff number.
• The supply of dental prostheses will be exempted from the tax.
• The activity of transporting injured persons and patients by a service provider carrying out this activity with an official licence and using a vehicle specially equipped for this purpose is now exempt from VAT (until now, only taxable persons who were public service providers could carry out this type of activity exempt from tax).
• Journals published at least once a year are also included in the 5% VAT rate (previously only journals published at least four times a week were included).
• Journals published at least four times a week (daily newspapers) are under a 0% VAT rate.

An increase in the maximum amount of the VAT exemption for members of diplomatic missions and professional consular posts

According to the amendment, the exemption provided for private purposes shall be available to the staff of diplomatic missions and consular posts and to officers of international bodies up to the limit determined according to reciprocity for any calendar year, up to maximum HUF 600,000, unless the international convention expressly provides otherwise.

New reporting obligation on payment service providers

Starting from 1 January 2024, payment service providers shall keep records of certain intra-Community transactions and report this data to the tax authority. The record-keeping requirement shall apply to payment services provided as regards cross-border payments. A payment shall be considered a cross-border payment when the payer is located in a member state of the Community and the payee is located in another member state of the Community, in a third country, or in a territory considered equivalent to a third territory. Payment service providers shall supply data from their records by the end of the month following the given quarter.

Social tax

The social tax payable by employers after employment income is 13%.

Advertisement tax

From 1 July 2019, until a provisionally extended deadline, 30 June 2026 the advertisement tax rate is reduced to 0%, and taxpayers subject to the advertisement tax do not have to fulfil their reporting and filing obligations during this period.

As of 1 January 2026, new rules will be applicable to companies in scope of advertisement tax liability not registered under other tax types in Hungary. Such taxpayers must register using the form provided by the tax authority within 30 days of commencing their taxable activity. If they fail to comply with the registration obligation, the tax authority will first send a warning and provide an additional 15-day deadline. In case of repeated non-compliance, a fine of up to HUF 10 million may be imposed for each subsequent non-compliance.

Excise duty

The excise duty rates increased for most products and are as follows as of 1 January 2026:

• Fuels (petrol, jet fuel, gas oil [diesel]): HUF 148,760 to HUF 158,800 per thousand litres, depending on the world market price of crude oil and on the type of product.
• Heating oil: HUF 6,230 to HUF 125,950 per thousand kilogrammes, depending on the purpose of the usage.
• LPG: HUF 0 to HUF 104,020 per thousand kilogrammes, depending on the purpose of the usage.
• Electricity: HUF 415/MWh.
• Coal: HUF 3,370 /1,000 per kilogramme.
• Natural gas: HUF 0.4046/kWh or HUF 38/nm3 depending on usage.
• Alcohol products: HUF 614,370 per hectolitre of pure alcohol. Special rules are applicable to spirits manufactured in private distilleries.
• Beer: HUF 1,950 per alcohol degree and per hectolitre, HUF 980 per alcohol degree and per hectolitre for beer produced in a micro-brewery.
• Still wines: HUF 0 per hectolitre.
• Sparkling wines: HUF 19,650 per hectolitre and HUF 9,830 per hectolitre for sparkling wines produced in a micro-winery.
• Other still fermented beverages: HUF 11,840 per hectolitre for other fermented beverages, HUF 0 per hectolitre for still wine of an actual alcoholic strength by volume not exceeding 8.5% volume mixed with carbonated water without added flavouring, where the ratio of still wine exceeds 50%.
• Other sparkling fermented beverages: HUF 19,650 per hectolitre.
• Intermediate alcoholic products: HUF 30,510 per hectolitre.
• Cigarettes: HUF 33,690 per thousand pieces and 24% of the retail selling price, but not less than HUF 47,140 per thousand pieces. The tax base per cigarette also depends on the length of the cigarette (without filter). It is double if the length of the cigarette is 8 cm to 11 cm, triple if the length is 11 cm to 14 cm, and so on.
• Cigars and cigarillos: 14% of the retail selling price, but not less than HUF 5,450 per thousand pieces.
• Fine-cut and other tobacco: HUF 29,270 per kilogramme.
• Refill liquid: HUF 38 per millilitre.
• Other consumables that contain tobacco or are consumed with tobacco: HUF 40 per piece; HUF 79 per millilitre for liquid.
• Smokeless tobacco products: HUF 29,270 per kilogramme.
• Smoking-substitute, nicotine-containing tobacco products: HUF 29,270 per kilogramme.
• Heated products: HUF 40 per piece.

Registration tax

The registration tax rates increased and are as follows as of 1 January 2026:

• Passenger cars: From HUF 47,000 up to HUF 10,152,000, depending on the power (kW) and environmental class of vehicles.
• Purely electrical vehicles and zero-emission vehicles: HUF 0.
• Motorcycles: From HUF 47,000 up to HUF 235,000, depending on the power (kW) of the motorcycles.
• Electrically powered motorcycles: HUF 0.

Extended Producer Responsibility fee

The EPR fee rates increased for some products and are as follows as of 1 October 2025:

• Plastic packaging: HUF 219 per kilogramme.
• Paper and cardboard packaging: HUF 173 per kilogramme.
• Metal packaging: HUF 186 per kilogramme.
• Other packaging: HUF 129 per kilogramme.
• Wooden packaging: HUF 22 per kilogramme.
• Textile packaging: HUF 148 per kilogramme.
• Glass packaging: HUF 107 per kilogramme.
• Composite packaging: HUF 191 per kilogramme.
• Single-use and other plastic products: HUF 113 per kilogramme.
• Temperature exchange equipment: HUF 116 per kilogramme.
• Screens, monitors, and equipment containing screens with a surface area greater than 100 cm²: HUF 362 per kilogramme.
• Lamps: HUF 419 per kilogramme.
• Large equipment (any external dimension more than 50 cm): HUF 124 per kilogramme.
• Photovoltaic panel (any external dimension more than 50 cm): HUF 63 per kilogramme.
• Small computer and telecommunications equipment (no external dimension more than 50 cm): HUF 261 per kilogramme.
• Portable battery, accumulator: HUF 160 per kilogramme.
• Industrial battery, accumulator: HUF 239 per kilogramme.
• Vehicle battery, accumulator: HUF 390 per kilogramme.
• Vehicle: HUF 36 per kilogramme.
• Tyre: HUF 137 per kilogramme.
• Office paper: HUF 128 per kilogramme.
• Paper-based advertisement: HUF 204 per kilogramme.
• Frying oil and fat: HUF 62 per kilogramme.
• Textile products: HUF 164 per kilogramme.
• Wooden furniture: HUF 51 per kilogramme.