Tax Changes for 2025 in Hungary

2025. July 07.

Dear Clients, Dear Readers,

On June 11, 2025, the Hungarian Parliament adopted the spring tax package, which introduces changes not only for the 2026 fiscal year but also for 2025. The aim of the legislative amendments is to simplify tax administration, ensure compliance with EU harmonization requirements, and implement the government’s tax policy objectives.

Below we summarize the most important changes.

1. Windfall Tax

According to the government’s decision, the windfall tax will remain in effect for the 2025 and 2026 tax years. Moreover, the additional tax burdens applied since 2022—typically in the form of government decrees — will now be codified into law.

The changes primarily affect credit institutions and financial enterprises. Significant changes will apply to the tax base and rates during this period.

2025 tax year: The tax base will be the pre-tax profit based on the 2023 annual financial statements. The tax rate:

7% on the portion up to HUF 20 billion
18% on the portion above HUF 20 billion

2026 tax year: The tax base will be the pre-tax profit based on the 2024 annual financial statements. The tax rates increase to:

8% up to HUF 20 billion
20% above HUF 20 billion

2. Personal Income Tax (PIT)

The law incorporates the allowances as follows:

Allowance for maternity, child care, and adoption benefits
Allowance for mothers raising three children
Allowance for mothers raising two children
Allowance for mothers under 30

The order of applying income-reducing allowances is also specified:

Allowance for mothers with four or more, three, or two children
Allowance for maternity, childcare, and adoption benefits
Allowance for individuals under 25
Allowance for mothers under 30
Personal allowance
Newlyweds’ allowance
Family allowance

The range of electric bicycles that employers can provide tax-free to employees is expanded. The power limit increases from 350W to 750W, and this exemption applies starting from the 2025 tax year.

A new tax-exempt disability benefit—Heroic Supplementary Disability Support—has been added.

As a new category among compensation payments replacing income, Heroic Health Damage Benefit is introduced. It is not subject to social security contributions but is subject to 15% PIT and 10% pension contributions.

3. Social Contribution Tax (SCT)

If a taxpayer’s income exceeds four times the annual average wage, the payer must pay SCT even if the recipient is a pensioner in their own right and claims a tax allowance (e.g., mothers with four or more children).

The change aims to prevent abuse, where business owners distributed dividends disguised as salary through tax-exempt pensioners.

Associated companies paying income to the same pensioner must be treated as a single payer, meaning their payments are aggregated for SCT threshold purposes.

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4. Corporate Income Tax (CIT)

The submitted bill includes several clarifications and amendments affecting corporate taxation:

Headcount Increase Allowance for Microenterprises

Corporate Income Tax base can be reduced by microenterprises which:

Qualify as such on the first day of the tax year (had max. 10 employees in the previous year), and
Have no registered tax debts on the last day of the tax year.

The reduction equals to 150% of the increase in average headcount multiplied by the annualized minimum wage at the beginning of the tax year.

Base Increase for Decrease in Headcount

If average headcount decreases, the CIT base increases.

The increase equals to 150% of headcount reduction multiplied by the annualized minimum wage and raised by 20%, but capped at the previously claimed allowance plus 20%.
No increase necessary in the tax base if the drop is due to maternity leave, childcare leave, sick leave, military service, imprisonment, or death.

Restriction of Heritage Property Tax Allowance

Properties under local individual protection will no longer qualify for the tax allowance related to heritage preservation.

R&D Tax Allowance Expansion

The tax base reduction for R&D cooperation (with a research institute or research center) increases from HUF 50 million to HUF 150 million.

5. Small Business Tax (KIVA)

No special tax base calculation is required when KIVA status ends due to a merger or demerger and the entity subsequently re-enters KIVA. This new rule simplifies re-entering KIVA after restructuring.

6. Global Minimum Tax (GloBE)

The deadline to register the top-up tax liability under the global minimum tax changes: From the current “within 12 months from the start of the tax year” obligation the deadline changes to “by the end of the second month after the tax year’s last day.”

This change applies to domestic constituent group entities and the designated representative of domestic groups, easing administrative burden.

A new penalty regime is introduced:

HUF 5 million for failing or delaying the registration obligations
HUF 10 million for failing, late, incorrect, or false data provision

7. Value Added Tax (VAT)

Tax Exemption Threshold Increased to HUF 18 Million

The legislative amendment confirms the change already announced in Government Decree 5/2025 (I. 25.): from 2025, the annual revenue threshold for VAT exemption increases to HUF 18 million.

The law clarifies that during VAT-exempt status, the taxpayer cannot act as VAT-exempt for sales under Sections 11 and 12 (e.g., new vehicles). These transactions are subject to VAT regardless of exemption.

Electronic Receipts and Cash Registers

As previously announced, cloud-based or hardware-based electronic cash registers may be used, and e-receipts are being introduced.

VAT Reporting Obligations

VAT payers will face broader data reporting obligations. Details are outlined in new Annex 11 to the VAT Act. The tax authority may use also receipt-related data in connection to the new system of cash registers for audits within the limitation period.

8. Retail Tax

For the 2025 and 2026 tax years, the retail tax applies progressively:

Tax base up to HUF 500 million: exemption
Between HUF 500 million and HUF 30 billion tax base: 0.15%
Between HUF 30 billion and HUF 100 billion tax base: 1%
Over HUF 100 billion tax base: 4.5%

For retail of vehicle fuels (TEÁOR/NACE ’25 code 47.3):

Tax base up to HUF 500 million: exempt
Above HUF 500 million: 3%

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9. Tax Administration and Procedural Rules

The term of de minimis aid used in tax laws is to be clarified.
The fees for advanced tax ruling increases

In the case of a standard contract, the fee for the tax assessment will be twelve million forints, in the case of an urgent procedure for the assessment of a conditional tax assessment application for a standard contract, sixteen million forints, in other cases ten million forints, or in the case of an urgent procedure for an application for such other cases, fourteen million forints.

The fees for advanced pricing agreement (APA) increases

The fee for the procedure in a unilateral procedure will be 10 million forints instead of the previous 8 million, and in a bilateral or multilateral procedure (MAP) it will be 14 million forints instead of the previous 12 million forints, while the fee for the preliminary consultation will increase from five hundred thousand forints to one million forints per consultation.

In case of violation of the rules related to the e-cash register and the customer application, the tax authority may impose a significant default fine.
Longer audit deadlines for chain transactions

New regulations apply to the deadline for auditing chain transactions involving multiple taxpayers. In such cases, the tax authority may extend the audit deadline to 365 days for reliable taxpayers, but in some cases even to 540 days.

New provisions apply to the electronic protocol on on-site audits and certain tax authority actions.

The above summary is provided for information purposes only. We recommend that you consult our experts before making any decision based on this information.

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