Tax law amendments in Hungary for 2026 and an important change in electronic administration

If the original pricing applied within the group does not meet the arm’s length requirement, the corporate tax base adjustment must be made to the median value of the arm’s-length range. However, if taxpayers perform a subsequent ‘accounting price adjustment’ (e.g. through correction invoices) for the relevant tax year by the balance sheet preparation date in order to reach the arm’s-length range – where the accounting adjustment amount may differ from the median value – no further adjustment is required under Section 18 (12) of the Corporate Tax Act. This procedure may already be applied for the 2025 tax year.

The rate of the corporate tax base deduction available for direct costs of R&D activities carried out in cooperation with higher education institutions, the Hungarian Academy of Sciences, or other designated research institutions will be reduced on a tiered basis. For basic research, 100% of eligible costs may still be deducted. However, for applied (industrial) research, the deductible portion decreases to 50% of eligible costs, and for experimental development, it decreases to 25% of eligible costs. The maximum amount of the tax incentive remains unchanged at HUF 500 million.

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From 2026, a tax relief will also be available for investments aimed at ensuring manufacturing capacity for clean technologies. The aid intensity may not exceed 15% in Budapest and 35% in other regions, taking into account the state aid accumulation rules. Such an investment is eligible for support only if, without the aid, it would have been carried out outside the EEA. The investment must be reported to the minister responsible for tax policy prior to its implementation. 

A new tax incentive is being introduced for investments aimed at eliminating environmental damage, rehabilitating ecosystems, and pursuing other specified environmental protection objectives. Taxpayers may claim a tax credit, for example, for investments of at least HUF 100 million and up to the equivalent of EUR 30 million that eliminate soil, surface water, or groundwater contamination. The amount of the tax incentive is 100% of eligible costs in the case of environmental damage remediation, and 70% of eligible costs for other ecological developments; these rates increase by 20% and 10% respectively for small and medium-sized enterprises. The investment must be reported to the minister responsible for tax policy prior to its implementation. Detailed rules will be made available in a ministerial information notice issued by the minister responsible for tax policy.

The threshold for quarterly corporate income tax advance payments will increase from HUF 5 million to HUF 20 million. 

In the future, a declaration by the group members will be sufficient to demonstrate that internal and external relations can be distinguished; detailed descriptions and documentation will no longer be required. 

If the status of the VAT group representative ceases, the members must appoint a new representative within 15 days and report this to the National Tax and Customs Administration (NAV). If they fail to do so, NAV will appoint the member with the highest tax performance as the representative.

The joint and several liability of VAT group members for obligations under the VAT Act and for sanctions imposed under the Tax Administration Act has been clarified.

From 1 July 2026, the ‘Domestic Purchases List’ must be completed with more detailed information and breakdowns. In addition to the taxable amount and VAT, taxpayers will also have to indicate the amount of VAT actually deducted in the return. Taxpayers who submit their VAT returns through the eVAT (eÁfa) system will be exempt from providing this detailed data.

The tax authority will automatically cancel a taxpayer’s tax number if the taxpayer fails to report its legal representative or does not fulfil its filing obligations within 90 days of the statutory deadline. Before cancelling the tax number, the authority will call on the taxpayer to remedy the deficiencies and will grant an additional 30-day deadline.

The deductible cost ratio available to self-employed individuals taxed under the flat-rate regime under the Personal Income Tax Act will increase from 40% to 45%, and from 2027 onwards to 50%.

A continuous (standing) declaration will be introduced, allowing eligible mothers to claim the allowance with a single declaration, which remains valid until revoked. 

The long-term engagement contract will be introduced as a new category of social security liability. Remuneration paid under such a long-term engagement agreement – amounting to at least 30% of the minimum wage – will always be subject to social security contributions and social contribution tax. As a result, a long-term engagement contract will constitute an insurance relationship.

Under the amendment, credit institutions/financial institutions will be required to pay a bank surcharge of 10% on the portion of their tax base not exceeding HUF 20 billion (instead of the previous 8%), and 30% on the portion above this threshold (instead of the previous 20%) in 2026. The option to reduce the annual tax liability through government bond purchases will decrease from 50% to 30%.

The suspension of the advertising tax obligation will be extended by half a year, and the payment obligation will again become effective from 1 July 2026. Within 30 days of commencing taxable activities, a regulatory registration will be required; failure to comply may result in a fine of up to HUF 10 million.

The brackets applicable to the retail tax rates will change as follows:

Note:

The automatic excise tax increase resulting from valorisation for petrol, kerosene and diesel will take effect from 1 July 2026 instead of 1 January 2026.

Amounts credited to SZÉP cards may also be used for the purchase of cold food from 1 December until 30 April 2026. 

The amendment, in line with OECD guidelines, defines, among other things, the concepts related to the simplified effective ‘covered’ tax rate and clarifies the procedural steps. The detailed rules of the procedure will be set out in a ministerial decree.

All Hungarian companies are required to maintain electronic communication with the Hungarian authorities. In this context, an important change has occurred: pursuant to the so-called Dáptv. (Act CIII of 2023), the AVDH (Document Authentication Based on Identification) service was permanently discontinued as of 31 October 2025. This represents a significant shift in electronic administration, as economic operators are still obliged to maintain electronic communication and to authenticate documents electronically.

 

Following the discontinuation of AVDH, as of 1 November 2025, statements of intent made on behalf of a business entity may be executed exclusively with a qualified electronic signature by a person authorized to represent that entity. It is important to note that the so-called DÁP eSignature may not be used for representing business entities or for professional purposes; it is permitted solely for private use. Therefore, after the phase-out of AVDH, only commercially qualified electronic signatures will be suitable for authenticating declarations. At present, two major providers offer qualified electronic signatures in Hungary:

 

Once the qualified electronic signature has been obtained, it is advisable to use it not only for electronic communication with authorities but also in contractual relationships and for business purposes, thereby achieving significant savings in paper, postal, and document storage costs.

The Company Act also allows the electronic signature of the person authorized to represent the company to be recorded in the company register. 

 

If you are authorized to represent a business entity, please ensure that you obtain a qualified electronic signature without delay so that you can continue to fulfil your electronic administrative obligations smoothly.

Should you have any questions regarding these changes, we remain at your disposal.