Tax law amendments related to the termination of the state of danger

On 9 May 2026, issue No. 44 of the Hungarian Gazette was published, containing the provisions that elevate to statutory level the earlier government decrees adopted in connection with the armed conflict in the territory of Ukraine. These amendments prepared the legal framework for the termination of the state of danger, which was subsequently promulgated less than a week later in issue No. 50 of the Hungarian Gazette, with an effective date of 15 May 2026.

Content:

- PIT exemption in case of representation in restaurants and confectionaries

- Exemption in social contribution tax

- 2% of touristic contribution

- Small enterprises tax and the service charge

- Advertisement tax

During the state of danger, numerous decisions and provisions affecting taxation were enacted exclusively by government decree. With the termination of the state of danger, these decrees automatically lost their effect. Therefore, the previously adopted rules — primarily those providing more favourable treatment — had to be elevated to statutory level to ensure their continued applicability. Below, without claiming completeness, we summarise the most important new tax-related statutory provisions included in Act XIV of 2026.

Personal income tax exemption for representation in restaurant and confectionery

The measures supporting the competitiveness of restaurants, originally adopted in Government Decree 10/2026 (I. 30.), have been incorporated into statutory law without substantive changes. Accordingly, following the termination of the state of danger, the portion of income (i.e., the value of the benefit) arising from representation provided in the form of catering services (food, beverages) in restaurants or confectioneries remains exempt from personal income tax up to 1% of the annual total revenue accounted for in the tax year, but not exceeding HUF 100 million.

In line with this, Section 70 of the Personal Income Tax Act is supplemented with new subsections (4a) and (4b), which define the exemption below the above threshold and provide the relevant definitions (such as tax year, confectionery, restaurant, or annual total revenue).

Similarly, Section 69 of the Personal Income Tax Act is supplemented with new subsections (5a) and (5b), which regulate the procedural rules and deadlines for tax liabilities arising from representation expenses exceeding the threshold. The statutory

text reproduces the earlier decree verbatim, including an incorrect word order (“by the 12th day of the quarter following the month”), which is not ideal. The legislator’s intention was presumably to require the taxpayer to settle the tax liabilities by the 12th day of the month following the quarter in which the annual total revenue is determined. We therefore recommend applying the rule accordingly.

We would like to highlight that the exemption must be calculated based on total revenue, not net sales revenue, which results in a higher tax-exempt amount.

Reduced rate of the tourism contribution

The more favourable tourism contribution rate adopted in Government Decree 10/2026 (I. 30.) has also been incorporated into the relevant statute. Under this provision, contrary to the general rule of 4%, the rate of the tourism contribution payable after restaurant and confectionery catering services remains 2% even after the termination of the state of danger.

Social contribution tax exemption for representation

Similarly to the above, following the termination of the state of danger, the portion of restaurant and confectionery catering services that is exempt from personal income tax (i.e., the part of the income/value of the benefit arising from representation that does not exceed 1% of the annual total revenue, up to HUF 100 million) also remains exempt from social contribution tax.

Service charge and its relationship with KIVA

The Act on Small Business Tax (Act CXLVII of 2012) has also been amended. The amended Section 20 (2) removes the service charge from deductible expenses, meaning that the service charge is no longer included in the KIVA tax base.

Advertising tax

Finally, as expected, the former provisions related to the advertising tax have also been extended. Under Act XXII of 2014 on the Advertising Tax, the tax rate has been 0% since 1 July 2019. This 0% rate would have been guaranteed only until 30 June 2026; however, based on the amendment, the 0% rate will continue to apply from 1 July 2026 for an indefinite period.

Tower Consulting, a Budapest-based accounting and payroll firm, together with its cooperating partners, is at your disposal for any accounting, payroll or tax advisory matters — in Budapest or anywhere in the country via remote, online channels.

Gábor Kertész