Spring tax package approved

The President of the Republic signed the spring tax package, which Act LIV of 2025 on certain tax obligations and amendments to certain tax laws published in issue 2025/73 of the Hungarian Gazette.

The legislation amends numerous tax laws, with the changes coming into effect at different times. The main changes are summarised below.

Personal income tax

The National Assembly approved proposals regarding infant care allowance, child care allowance and adoption allowance, as well as tax base reductions applicable to mothers with three or two children and mothers under the age of 30. The regulations differ in terms of when the allowance can be applied to income earned.

• With regard to child care allowance, child raising allowance and adoption allowance, the tax base reduction will be applicable from 1 July 2025.
• The tax base allowance for mothers with three children will be valid from 1 October 2025.
• The regulations concerning tax relief for mothers with two children will come into effect on 1 January 2026, in several stages: From 2026, mothers under the age of 40 with two children will be exempt from tax. In 2027, those aged between 40 and 50; in 2028, those aged between 50 and 60; and in 2029, those aged over 60.
• The tax base reduction for mothers under the age of 30 will be effective from 1 January 2026.

The legislator has also incorporated the necessary provisions relating to the long-term asset management relationship currently being introduced into Act CXVII of 1995 on personal income tax, with effect from 1 September 2025 .

Among the new rules introduced in the area of tax exemptions, the following are worth mentioning:

• From 20 June 2025, tax-exempt titles will be supplemented by higher education courses financed by the budget of a subsystem of the state or by the European Union. Tax exemption is granted for training support (except for income supplements and income replacement benefits), adult education services, meals provided during the training period, transport, accommodation and reimbursement of expenses and living allowances granted on this basis.
• The power limit for tax-free private use of company bicycles will increase to 750 W from 2026.

Corporate tax

With effect from 1 September 2025, the legislator will amend Act LXXXI of 1996 on corporate tax and dividend tax. Act (hereinafter referred to as: Tao tv.) has also incorporated the necessary provisions relating to the long-term asset management relationship currently being introduced.

The micro-enterprise employer tax base allowance will increase from 100 per cent to 150 per cent from 20 July 2025, and the upper limit on the number of employees will rise from 5 to 10 in line with the micro-enterprise classification criteria. The extension of the micro-enterprise employer discount can be applied to the 2025 tax year, depending on the taxpayer’s choice.

In the case of a preferential transfer of assets, from 20 June 2025, in the event of partial non-fulfilment of the holding obligation, the deferred tax liability will not be reversed in a lump sum, but only in proportion to the non-fulfilled part, in proportion to the ownership share, which must be applied by both the transferor and the transferee. The favourable change affecting the beneficiary’s asset transfer shall apply to non-performance occurring after 1 January 2025.

From 20 June 2025, civil law spin-offs will be classified as asset transfers with declared benefits for corporate tax purposes. The parties involved are exempt from transfer pricing obligations. The favourable transfer pricing rule shall be applied to demergers taking place after 31 December 2024, at the taxpayer’s discretion.

Also, from 20 June 2025, a new rule will apply whereby the HUF 50 million limit on corporate tax base allowances for direct costs of research and development activities carried out jointly with higher education institutions, the Hungarian Academy of Sciences and certain other research institutions will be increased to HUF 150 million.

Based on the amendment, taxpayers who become resident in Hungary through cross-border transformation, similar to companies that only have their place of business in Hungary, may also report their shareholdings acquired prior to the transformation. Taxpayers who became resident taxpayers as a result of the cross-border transformation implemented in 2024 may apply the rules on reported shareholdings if they report previously unreported shareholdings acquired prior to obtaining domestic residency within 75 days of the provision coming into force on 20 June 2025. The provision also applies to the acquisition of shares in the case of a change of residence. In the event of failure to meet the deadline, no request for justification may be submitted.

The legislator has introduced new provisions concerning sports academies involved in spectator team sports, which must also be applied in ongoing cases.

The power limit applicable to recognised costs for company bicycles is increased to 750 W. This change must already be taken into account for the 2025 tax year. (As mentioned in our previous newsletter at mentioned in our previous newsletter, Tao TV does not stipulate that the cost can only be claimed if the service is used. Therefore, if the company provides a bicycle that meets the conditions to a private individual belonging to the specified group, the benefit will be subject to personal income tax on the part of the private individual, but the company can account for the cost.

KIVA

If, in the case of a merger or demerger carried out at book value, the taxpayer repeatedly opts for tax liability, the transition difference does not need to be determined and the rules on transition differences do not apply. The exception applies in the event of termination/repeat election following entry into force, as specified in the text of the amendment. Given that mergers and demergers give rise to separate financial years, the general deduction of the small business tax base applies, with the sole exception of Section 28. Exempts from taking into account the transition difference referred to in paragraph (4a).

Global minimum tax

More time is available for reporting supplementary tax liability to the tax authority; the deadline is changed to the last day of the second month following the last day of the tax year affected by the tax liability.

Value added tax

The legislator has raised the value limit entitling taxpayers to opt for subjective tax exemption to HUF 18 million in accordance with government decree provisions.

In the case of intra-Community sales, the taxpayer acts in a tax-exempt capacity in relation to the movement of own goods to another Member State (not including the transfer of new means of transport), i.e. this transaction is subject to domestic tax exemption and and must therefore be taken into account for the purposes of calculating the value threshold for tax exemption. For the purposes of calculating the value limit, the calculated tax base of the transaction (VAT Act) 68. §) must be taken into account.

From 20 July 2025, the widow of the deceased taxpayer, heirs, legal representatives of taxpayers who have become incapacitated, and 9 farm successors who continue agricultural activities will have the opportunity to terminate the exemption out of turn and choose the general taxation method for the remainder of the calendar year. The legislator thus sought to ensure that taxpayers belonging to the relevant group would not incur any tax liability on the assets acquired.

From 2026, in the case of travel agency services, the service provider will not be required to indicate the tax base and the amount of tax transferred on the invoice. An exception to this is when the travel organisation service is used by a taxable person who also declares that they are not using the service as a travel organiser. However, the tax base and the amount of tax transferred must still be included in all cases in the data reported to the tax authority.

From 1 July this year, it will not yet be necessary to provide data on manual receipts, and the approximately 270,000 businesses affected will have until 1 September 2026 to prepare. From July this year, it will be possible to issue receipts using e-cash registers, but their use will remain voluntary until 1 September 2026.

The indirect customs representative must first declare the tax base and amount specified in forints in the returns to be filed for the tax assessment period including 1 October 2025.

From 2026, if a taxpayer issues an invoice for the sale of goods or provision of services performed by its legal predecessor, it shall also provide information on the tax number of the legal predecessor on the invoice or any document treated as an invoice. In the case of fulfilment by a group taxpayer, the data reporting must also cover the tax number of the given group member.

Excise duty

In order to curb illegal tobacco production and trade and to establish a verifiable, traceable production and supply chain, producers must report the location of the land used for growing tobacco in a clearly identifiable manner. The legislator also stipulates a reporting obligation for shipments of dried and fermented tobacco passing through the country.

The amendment also creates the possibility of reducing tax advances in excise matters.

The upper limit of the excise duty penalty that may be imposed in the case of an expedited procedure will increase significantly (to 80,000 forints, or 98,000 forints in the case of tobacco products). The amendment also stipulates fines for tobacco plants grown on unregistered land.

The regulations governing tax warehouses engaged exclusively in contract distillation have become more favourable and flexible, as tax does not have to be paid on distillate produced by the contract distiller but not taken over if subsequent takeover is unlikely, and the obligation to appoint a responsible plant manager has been abolished.

Under the previous rules, only bottled spritzers with a wine content of 50 per cent were exempt from excise duty. As a result of the amendment, bottled spritzers with a wine content of 20-50 per cent are now also eligible for the more favourable tax treatment and can be produced in a simplified tax warehouse.

Extra profit taxes, special taxes

Extra profits taxes, previously referred to as transitional measures and regulated at the decree level, will now be regulated at the legislative level, making it even clearer that these are permanent taxes.

The special tax on banks will increase from 2026: 8 per cent on the portion of the tax base not exceeding HUF 20 billion, and 20 per cent on the amount exceeding that. The discount applicable to increases in government securities may also be applied to the 2026 tax year, provided that the stock of government securities maturing after 1 January 2030 increases compared to the base periods. The discount applies to government securities denominated in Hungarian forints; retail government securities cannot be taken into account when applying the discount.

The rate of the supplementary insurance tax in 2025 and 2026

• in the case of insurance services, 3 per cent on the portion of the tax base derived from these services not exceeding HUF 48 billion, and 14 per cent on the amount exceeding this,
• In the case of life insurance services, 2 per cent on the portion of the tax base derived from these services not exceeding HUF 48 billion, and 6 per cent on the amount exceeding this.

Insurers may reduce this obligation in relation to the increase in the nominal value of their government securities portfolio. The discount will be 30% of the increase in 2025 and 60% in 2026 (but attention must also be paid to the upper limit related to the tax payable).

The rules governing credit institutions’ claims for reimbursement of the special epidemic tax will also be elevated to the level of law, without any changes to their content.

The special tax liability of petroleum product manufacturers remains at 95% for petroleum imported from the Russian Federation.

The income tax rate for energy suppliers will be reduced to 31% from 2026 . Water utility providers and public service providers authorised to collect domestic sewage not collected by public utilities will be exempt from taxation and will no longer be subject to the “Robin Hood tax” from 2026.

Retail tax

The amendment provides for the incorporation into law of provisions regulated at the level of emergency government decrees and the maintenance of retail tax liability in the tax year beginning in 2026.

Duties

The duty law is supplemented by rules on long-term asset management.

The amendment clarifies that the exemption from property acquisition tax under the Tao tv. in the case of beneficiary asset transfers applies to all assets subject to duty affected by the legal transaction, provided that the statutory conditions are met. The clarified provision on exemption from property transfer duty in connection with the transfer of assets to beneficiaries shall also apply to ongoing duty cases.

The legislator exempts from the transfer tax on real estate the portion of the market value of the land corresponding to the market value of the solar power plant or wind power plant structure. The purpose of the amendment is to ensure that, in the case of renewable energy parks (solar parks and wind farms) established on land, the obligation to pay property acquisition tax arises after the acquisition of the land. A transitional provision clarifies that the favourable duty rule must also be applied to cases that have not been definitively closed by the tax authority.

Financial transaction tax

The legislator extends the scope of the financial transaction levy to transactions executed from electronic money accounts, thereby imposing an obligation on settlements that were previously treated by neobanks and fintech service providers as transactions not subject to levy, but rather as exempt “internal transactions”.

Social security contribution tax

Contrary to the rules stipulating exemption from social contribution tax for private individuals who are pensioners in their own right, from 2026, with regard to private individuals who are pensioners and who are entitled to the mother’s allowance, the “mother’s allowance” to which the payer or self-employed private individual is entitled will only be valid up to four times the average annual income.

Social security contributions

The amendment stipulates that persons receiving childcare allowance are also eligible for family contribution relief if their basic legal relationship (e.g. employment relationship, self-employment relationship) ceases, and as a result, he/she is no longer considered insured.

The family contribution allowance can also be claimed against social security contributions payable on income that is not taxed in Hungary under double taxation agreements, but for which social security contributions are paid in Hungary.

Tax procedure rules

Several important tax procedure rules have changed as of 20 June 2025:

• The limit for automatic instalment payments without surcharges has doubled and can now be requested for tax debts of up to two million forints.
• Reliable companies can request automatic payment relief of up to 5 million forints, instead of the previous 3 million forints.
• Data on cash flow accounts must be provided to financial institutions within 7 days instead of 15 days. Faster data retrieval increases the efficiency of NAV’s control, enforcement and debt collection procedures.
• New rules for calculating deadlines have come into effect. The strict maximum audit period of 365 days, or 180 days for reliable taxpayers, may be extended to a maximum of 540 days in certain special cases. Reliable taxpayers are also subject to favourable rules, as the maximum extension period in their case is 365 days. However, an important guarantee rule is that the audit deadline can only be extended if the audit of several taxpayers is necessary to unravel the invoicing chain. The change could be an effective tool against VAT fraudsters who invoiced through long, complicated chains involving foreign companies.

Other significant changes:

• With the introduction of the concept of digitisation of on-site inspections, the tax authority can now record the minutes of on-site inspections electronically. Biometric signatures are intended for natural personal identification, and are therefore subject to extremely strict data protection rules.
• The 85% refund of the fee for the procedure to determine the normal market price will not be available in cases where the taxpayer’s conduct typically hinders or delays the procedure. The amendment also regulates the amount of the fee payable in the event of a switch between unilateral and bilateral or multilateral procedures for determining the normal market price.
• Under current regulations, no default penalty may be imposed for undeclared employees if the taxpayer has fulfilled their reporting obligations in relation to the same legal relationship for the last tax assessment period closed with a pre-audit return. The amendment creates the possibility that, subject to appropriate guarantee rules, it will not be necessary to impose a default penalty in the case of simplified employment relationships.
• In accordance with the Minimum Tax Act, a default penalty may also be imposed in the event of a breach of the data reporting obligation. The transitional exemption for tax years beginning before 31 December 2026 also covers this legal consequence.

Related materials:

• Act LIV of 2025 on certain tax Act LIV of 2025 on certain tax obligations and amendments to certain tax laws
• https://nav.gov.hu/sajtoszoba/hirek/Mar_ma_hatalyba_lepett_nehany_fontosabb_adovaltozas

If you have any further questions regarding changes to tax legislation, please feel free to contact our experts.