Hungary has submitted five tax bills proposing changes to personal and corporate taxation, including a 15% corporate tax rate for large enterprises, a new progressive wealth tax, expanded tax incentives for research and development, and increased family tax relief. The proposals also revise small taxpayer rules, VAT reporting requirements, and tax exemptions for mothers. 

RF Report

Hungary’s government has submitted a series of tax bills accompanying the draft 2027 budget to parliament on 27 October 2026.

Following Prime Minister Péter Magyar’s parliamentary outline on 19 October 2026, this landmark reform package combines increased corporate levies and wealth taxes on high earners with targeted tax relief for families, sole entrepreneurs, and lower-wage workers.

Bill No. T/927: The tax law amendments and asset taxation act

Bill No. T/927  introduces broad structural updates across personal income tax, VAT, sectoral levies, and tax administration. Key measures include an exit tax on unrealised capital gains exceeding HUF 500 million, mandatory electronic VAT reporting, progressive advertising and company car taxes, excise duty increases, and expanded CSRD sustainability reporting rules aligned with EU directives.

  • Exit tax on asset appreciation: Introduces an exit tax on unrealised gains from shares, securities, and crypto-assets for individuals transferring tax residence abroad, applying to asset portfolios exceeding HUF 500 million. Payment deferral is available when relocating to EU/EEA states until sale.
  • Foreign performers and athletes: Assigns tax withholding responsibility to paying agents, exempting non-resident performers and athletes from filing Hungarian returns if tax was withheld.
  • Catering representation exemption limit: Reduces the tax-free threshold for restaurant and patisserie representation expenses from HUF 100 million to HUF 50 million.
  • Sole proprietor cost ratios & TBSZ accounts: Maintains flat-rate expense deductions at 45% in 2027, cancelling the planned increase to 50%. Financial institutions must submit annual electronic reports on long-term investment accounts (TBSZ) starting in 2027.

Corporate tax (Tao) & global minimum tax

  • Development reserves & transfer pricing: Extends development reserve utilisation from four to five tax years for natural disasters and moves transfer pricing disclosures to a separate reporting form.
  • Global minimum tax adjustments: Updates accounting rules in line with OECD guidelines, permits a single functional currency election for five-year periods, and extends the initial transition-year filing deadline to 18 months.

Value added tax (VAT)

  • Mandatory electronic VAT & housing rates: Introduces mandatory transaction-level e-VAT reporting on 1 July 2027 for major monthly filers, extending to all taxpayers on 1 January 2028. The 5% preferential VAT rate on new residential property sales becomes permanent.
  • Receipt relief & EU alignment: Exempts public transport operators from issuing paper receipts, extends manual submission deadlines from three to seven days, and aligns rules with EU platform deemed-seller obligations.

Sectoral & asset taxes

  • Advertising tax & company car tax: Reintroduces advertising tax from 1 January 2027 at progressive rates of 0% to 7.5%. Introduces progressive monthly company car tax for vehicles exceeding 120 kW.
  • Excise duty & EKHO ceiling: Doubles the quarterly excise advance payment threshold to HUF 12 million, increases spirit excise duties by 12%, and caps the EKHO income ceiling for sports professionals at HUF 60 million.

Accounting & CSRD sustainability reporting

Implements EU Directive 2026/470, raising mandatory sustainability reporting thresholds to firms exceeding HUF 180 billion net revenue and 1,000 employees, while easing value-chain disclosures for SMEs.

Tax administration & anti-abuse provisions

Replaces physical qualification cards for tax experts with an official online registry. Taxpayers must demonstrate genuine economic reasons for transactions during audits under tightened anti-abuse rules.

Bill No. T/928: Itemised tax of small taxpayers

Bill No. T/928 overhauls the itemised tax regime for small taxpayers by reopening eligibility to part-time workers, increasing the annual revenue threshold to HUF 22 million, permitting corporate invoicing subject to anti-abuse safeguards, and phasing out the existing KATA regime by 2029.

  • Reopening to part-time employees and secondary activities: Reopens the itemised tax regime to part-time sole entrepreneurs (working 36+ hours elsewhere), pensioners, students, and disability recipients. Full-time taxpayers acquire social security rights based on a HUF 317,000 monthly base, whereas non-full-time taxpayers do not.
  • Corporate invoicing & anti-abuse safeguards: Permits invoicing to corporate clients, but excludes income from current or former employers (within 24 months) and real estate rentals. Status terminates if a single corporate client provides 50% or more of annual revenue.
  • Revenue limit, itemised tax rates, and supplementary taxes: Raises the annual revenue limit to HUF 22 million, charging a 40% surtax on excess income. Monthly itemised taxes are set at HUF 100,000 for full-time and HUF 50,000 for part-time taxpayers. It also imposes a 15% corporate revenue supplementary tax when 15% of corporate client revenue exceeds the total itemised tax paid.
  • Transition rules & phase-out of old KATA (2027–2028): Allows existing KATA taxpayers to remain until 2028 if they avoid corporate invoicing. Monthly taxes increase to HUF 75,000 in 2027 and HUF 100,000 in 2028 before the old law is repealed on 1 January 2029.

Bill No. T/931: Amending laws relating to the taxation of companies

Bill No. T/931 introduces a two-tier corporate tax system, including a 15% rate for large enterprises with annual revenues of at least EUR 500 million. It also replaces team sports tax allowances with deductions for amateur sports support and expands R&D tax incentives.

  • Two-tier corporate tax system: Establishes a two-tier CIT structure, keeping the 9% general rate while introducing a 15% rate for large companies with revenue equivalent to EUR 500 million. If any member of a corporate group qualifies, the 15% rate applies to the entire group. Effective rates average ~11.25% due to HIPA and tax deductions.
  • Transformation of sports subsidies: Terminates corporate tax allowances for team sports (TAO) on 1 January 2027. Replaces them with a 20% pre-tax profit deduction strictly for non-refundable support to amateur sports entities, excluding professional sports.
  • Overhaul of research & development (R&D) allowances: Restricts R&D service deductions to qualified research institutions or SMEs. Allows triple deductions (3x) for R&D staff expenditures and tangible asset depreciation. It also increases the R&D tax credit rate from 10% to 20% and removes the mandatory 5-year election restriction.
  • Development tax allowance: Raises the minimum investment threshold for large enterprise projects to HUF 5 billion and requires an annual 5% increase in direct R&D spending. It shortens the claim window to 10 tax years within a 12-year period, repealing three underutilised investment titles. Total cost-based deductions are capped at the lower of 5.5% of wage costs + depreciation or 1% of tangible asset book value.

Bill No. T/930: Wealth tax

Bill No. T/930 introduces a progressive wealth tax of 1% and 1.5% on net taxable assets exceeding HUF 1 billion, alongside rules governing asset valuation, exemptions, and family and marital wealth allocation.

  • Tax threshold and progressive tax rates: Applies a progressive wealth tax on net tax bases exceeding HUF 1 billion, levying 1% on amounts up to HUF 100 billion and 1.5% on the excess.
  • Scope of tax liability: Imposes full tax liability on domestic residents for worldwide assets. Foreign individuals face limited liability restricted to Hungarian real estate, related rights, and equity holdings in Hungarian or property-heavy companies.
  • Net tax base calculation & deductible liabilities: Calculates the net tax base on asset values as of 31 December minus verified liabilities and the HUF 1 billion threshold. Verified debt reduces asset values for domestic taxpayers, while foreign taxpayers can only deduct debt tied to Hungarian assets.
  • Taxable assets, exemptions & specific thresholds: Includes real estate, shares, cash, crypto, and precious metals. Household items are exempt except artwork/jewelry over HUF 3 million and vehicles over HUF 10 million. Business assets are fully taxable.
  • Family & marital asset allocation rules: Applies prenuptial agreements or a 50-50 default split for marital property. Minor children’s assets are added to the parent’s tax base under the single HUF 1 billion threshold.
  • Valuation methodology: Uses a valuation hierarchy for real estate (recent sales, indexed prices, NAV models, or appraisals). Unlisted corporate shares are valued via a formula weighting net equity (1/3) and capitalised 3-year yield (2/3), with minority discounts of 25–30%.
  • Tax credits & deductions from payable tax: Allows taxpayers to deduct 50% of mandatory expert valuation fees (capped at HUF 2 million/year) and local property/vehicle taxes from payable wealth tax.
  • Administration, filing & payment: Requires annual electronic filing and payment by August 31. Allows 12-to-24-month payment deferrals for non-liquid portfolios and permits directing 5% of paid tax to the National Cooperation Fund (NEA).

Bill No. T/929: Restructuring family allowances and lower earnings tax credit

Bill No. T/929 restructures family allowances and lower earnings tax credits by converting tax-base allowances into direct tax credits, doubling monthly family allowances, introducing a 6% wage tax credit for minimum-wage earners, and capping mothers’ tax exemptions at HUF 1 million per month.

  • Direct tax credit shift & hierarchy: Converts tax-base allowances into direct PIT tax credits applied in a strict statutory sequence, placing family tax allowances last so unused amounts claim contribution allowances. Maternity benefits (CSED, GYED) become fully tax-exempt.
  • Increased monthly allowance rates: Doubles monthly family allowances starting December 2026, providing HUF 24,400–34,000 per month depending on child count and single-parent status, and up to HUF 51,800 for disabled children.
  • Minimum wage credit & tapering mechanism: Grants a 6% wage tax credit for earnings up to the minimum wage, effectively lowering the PIT rate from 15% to 9%. The credit tapers off above the minimum wage.
  • Income cap & age cut-offs: Introduces a HUF 1 million monthly income cap across all mother-related tax exemptions. Restricts the 2-child mother allowance strictly to women under age 40, abolishing previously planned expansions to older age groups.