The year 2025 is special, as the “usual” autumn tax package consists not of one, but three separate bills (T/12801, T/13110, T/13054). The first proposal was submitted to Parliament in October, the second in mid-November under an accelerated procedure, while the third was submitted in the first half of November, but the legislative process for this last one had not yet concluded at the time of closing this article, so another amending law is expected to be announced later.
The main driver of the amendments is to reduce the administrative burden on businesses. Thus, alongside some significant new elements, there are also numerous smaller but important changes that fundamentally reform previous practices. That is why it is recommended involving accountant, payroll specialist and tax advisory to discuss the modifications and their effect on the companies activity and administration In this post, we summarize the most important changes that have become known.
Crypto Transactions – Loss Utilization
For crypto transactions, the accounting of acquisition costs and transaction losses differs from the rules applied to normal capital gains or controlled capital market transactions (ETÜ). Currently, a 2-year limit applies to the use of losses, which, according to the new rules, will be deleted.
An individual may utilize losses incurred in the tax year or in previous years against income from crypto assets at any time, without a time limit. Since the terminology refers to “tax equalization,” in practice, it is not the incomes and losses that are summed, but their tax content.
Of course, to account for tax equalization, it is mandatory to keep records from which transaction gains and losses, as well as the use of losses, can be credibly substantiated for any year. Similar to ETÜ, the loss for the year that can be used in the future must be indicated as supplementary information in the tax return for the given year.
The new rule can already be applied in the tax return for the 2025 tax year.
Flat-rate Expense Ratio for Sole Entrepreneurs
The expense ratio for flat-rate taxed sole entrepreneurs applying the 40 percent expense ratio will increase in two steps: from January 1, 2026, from 40 percent to 45 percent, and from January 1, 2027, from 45 percent to 50 percent.
Tax Base Allowances
To enforce the allowance for mothers raising three children, the tax advance declaration made by the mother to the employer or payer in 2025 must be considered a continuous tax advance declaration by the employer or payer until the mother makes a new declaration.
A rule simplifying the obligation to make a tax advance declaration for mothers raising three children is introduced, whereby those newly entitled to the tax allowance can also make the declaration in the statement on family tax allowance.
For the allowance for mothers under 30, it is no longer a condition that entitlement to the family allowance must arise before the mother turns 30. According to the amendment, entitlement to the family allowance may arise after the mother turns 30, but the allowance can be claimed for the last time in the year in which the mother reaches the age of 30.
New Rules on Benefits
The range of tax-free or preferentially taxed benefits is extending:
Amounts refunded by banks to clients who have suffered losses due to criminal data-mining are currently taxable as certain specified benefits (with payer taxation). Considering that the client who was the victim of fraud does not, in the ordinary sense, gain income from the amount voluntarily refunded by the bank (as this amount previously appeared as a loss), i.e., the client does not “profit,” such payments should be treated as tax-exempt, similar to compensation or indemnification.
The range of benefits is expanded with support that can be provided as Home Support. The public charges arising from this benefit must be fulfilled according to the rules for fringe benefits.
The detailed rules of the support will be determined by government decree.
Vehicle Expense Accounting – (Bill Not Yet Adopted)
Currently, individuals and sole entrepreneurs using multiple vehicles in a tax year may only choose the same expense accounting method for all vehicles. The amendment allows taxpayers to choose different expense accounting methods for vehicles with different types of propulsion. However, the choice is not per vehicle, but for the group of vehicles with internal combustion engines, a uniform method must be chosen, and for the group of hybrid and electric vehicles, another (but also uniform) method may be chosen.
Tax Allowances for Environmental Purposes
The development tax allowance is supplemented with the legal title of investments to ensure manufacturing capacity for clean technologies and the provisions necessary for its use.
A new tax allowance is introduced: “Tax allowance for investments and renovations aimed at eliminating environmental damage and other specified environmental purposes.”
The tax allowance can be claimed for investments or renovations aimed at eliminating environmental damage and certain other environmental purposes, with a present value of at least HUF 100 million, over six tax years.
The amount of the tax allowance that can be claimed by the taxpayer depends on the type of investment and the amount of eligible costs, but may not exceed the HUF equivalent of EUR 30 million.
Taxpayers under IFRS
For taxpayers under IFRS, the rules for taking tax allowances into account are clarified by a general reference to tax allowances, so that the rules cover all tax allowances that expand year by year, and the different accounting of tax allowances does not cause discrepancies between the Hungarian and IFRS tax bases.
R&D Activity Tax Allowance
In the case of cooperation with research institutes or universities, based on the maximum limits under the General Block Exemption Regulation, the limit for the tax allowance is 100% of eligible costs for basic research, 50% for industrial research, and 25% for experimental development, with the HUF 500 million and the EUR 55, 35, and 25 million itemized limits remaining in place.
Advance Payment Frequency Threshold
The threshold for the frequency of corporate tax advance payments increases from HUF 5 million to HUF 20 million. The increase applies to all taxpayers, including those in agriculture, forestry, and fisheries.
Electronic Funds in the Cash Register
When determining the value of the cash register and its exempt value, the amount of electronic money recorded in connection with the taxpayer’s payment account does not need to be taken into account.
Rising Entry and Exit Thresholds
Among the entry conditions for small business tax status, the maximum headcount increases to 100, and the maximum revenue and balance sheet total increase to HUF 6 billion. The higher thresholds apply to taxpayers who notify the tax authority of their choice of small business tax status on or after December 1, 2025.
For termination cases, the revenue threshold increases from HUF 6 billion to HUF 12 billion, and the headcount from 100 to 200.
Minimum Value of Personal Payments
With the change in social contribution tax, the minimum value of personal payments will be 100% of the minimum wage instead of 112.5%.
Group Taxation
To address practical issues experienced in the operation of group taxation, the law introduces new solutions, some of which provide administrative relief for the establishment, termination, or change of group members (e.g., less data required). The tax authority also helps enforce compliance (e.g., mandatory appointment of a group representative by the tax authority if members do not appoint one in time).
M-Forms
To increase the effectiveness of risk management and control, the amendment changes the data reporting for received invoices so that not only the tax charged but also the deductible tax must be reported, as not all charged VAT is always deductible.
For taxpayers who have chosen cash accounting, and for invoices issued by such taxpayers, the deduction is aligned with the financial settlement of purchases, so the right of deduction may not be exercised at the same time for all invoices. Accordingly, the amendment repeals the provision that a single data report is sufficient for such invoices.
5% VAT Rate
From January 1, 2026, the sale of beef and related offal will be reclassified from the 27% VAT rate to the 5% VAT rate, grouping it with poultry and pork.
Threshold for Exemption
The annual revenue threshold for VAT exemption will increase in three steps to HUF 24 million. With effect from January 1, 2026, the threshold will be HUF 20 million, from January 1, 2027, HUF 22 million, and from January 1, 2028, HUF 24 million.
The new tax brackets for retail tax are set at HUF 1 billion, HUF 50 billion, and HUF 150 billion. The modification of the brackets already applies to the 2025 tax liability, i.e., the 2025 retail tax must be determined using the rates corresponding to the new brackets.
Financial leasing and retention of title are no longer listed as facts in land registry regulations, but are treated as rights (“lessee’s right” and “buyer’s right related to retention of title”) and can be registered in the land registry.
As a result of the amendment – in view of Section 12 (1) and Section 18 of the Local Taxes Act – from January 1, 2026, the lessee or the holder of the buyer’s right related to retention of title, as the holder of a property right registered in the land registry, will be the subject of building and land tax.
Furthermore, the scope of local taxes is amended. Forest land is removed from the possible categories of taxable objects, so local tax cannot be imposed on such land.
With the suspension ending on June 30, 2026, it is necessary to provide rules for cases where the tax year covers less than 365 days.
In view of the judgment of the Court of Justice of the European Union in case C–482/18, the penalty system is changing. The new provisions emphasize that the penalty for non-compliance is only a last resort to ensure that taxpayers fulfill their obligations properly. Therefore, when the tax authority detects a failure to register, it will not impose a penalty in the first instance. At this stage, only a call to the taxpayer is appropriate.
Long-term Commissioned Relationship
Implementation of the term of long-term commissioned relationship is a change affecting the payroll area. For persons working under a commission contract for an extended period, the usual subsequent notification causes several problems: the principal has a significant additional administrative burden, as the legal relationship must be reported (and closed) for each payment period, even if the commission lasts for several months or years. It is also problematic that those who are only in a commission relationship cannot obtain a European Health Insurance Card or an A1 certificate due to their subsequently established (not continuous) insurance relationship.
Due to the above problems, the provision introduces the concept of a long-term commissioned relationship, which is a commission relationship that the employer reports as such to the state tax and customs authority. In this new relationship, unlike the “normal” commission relationship, the insured notification does not have to be made retrospectively, and the insurance relationship is considered continuous from the start date of the commission until the principal reports its end.
Persons working under a long-term commissioned relationship are considered insured from the creation of the relationship. The assessment of a long-term commissioned relationship also differs from a “normal” commission relationship in that it is not necessary to check whether the monthly commission fee exceeds 30% of the minimum wage, but since this new relationship creates insured status, minimum contribution and social contribution tax obligations are attached to it. The minimum base is 30% of the minimum wage.
Filing Frequency for Sole Proprietors
From 2026, not only sole proprietors applying flat-rate taxation but also those applying entrepreneurial income taxation must file social security contributions quarterly. However, the return must show the public charges payable for each month. The contribution for the quarter must be paid by the deadline for filing the return, i.e., by the 12th of the month following the quarter.
For full-time sole proprietors and partnerships, the minimum monthly base for social contribution tax is currently 112.5% of the base for social security contributions. To ensure unified treatment, from January 1, 2026, the 112.5% multiplier will be abolished. In the future, the base for social contribution tax (in line with the base for social security contributions) will be at least 100% of the minimum wage (or guaranteed minimum wage).
Currently, flat-rate taxed sole proprietors must file and pay social security and social contribution tax quarterly, while those applying entrepreneurial income taxation must do so monthly. The amendment eliminates the difference between the different taxation methods, and the unified quarterly filing and payment frequency reduces the administrative burden for sole proprietors applying entrepreneurial income taxation.
Waiver of Owner’s Loan in Liquidation
Earlier involvement of tax advisor was essential in the correct management of a dept-to-equity conversion. Because, in connection with the acquisition of assets resulting from the waiver of an owner’s loan, gift duty must be determined according to the general rules. Good news, that according to the modification in case of voluntary liquidation the tax authority suspends the duty assessment procedure. The assessed duty is deleted by the tax authority without issuing a decision, by noting it on the file, if the company court deletes the company in liquidation affected by the waiver of the member’s loan.
Substitute Purchase for Exchange
The duty allowance for substitute purchase for exchange is amended by removing the reference to the sale of the dwelling closest in time to the purchase, so that in the case of the sale of several dwellings, the acquirer can achieve the most favorable duty base.
When determining the duty base after the purchase of a dwelling – if the individual sold another dwelling before the purchase, under the current rules – the market value of the dwelling sold within a maximum of 3 years before the purchase can be taken into account. The 3-year period is changed to 5 years.
A tax allowance for investments aimed at energy development is introduced.
The allowance can be claimed up to 80% of the calculated tax reduced by other tax allowances.
The tax allowance for investments aimed at energy development can be applied for the first time to investments started in 2026.
The amendments impact every business to some degree. Tower Consulting, an accounting and payroll firm based in Budapest, along with its trusted partners, is ready to assist you with any accounting, payroll, or tax advisory needs—whether in Budapest or anywhere across the country via secure online channels.
Author: Gábor Kertész
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