For many years, Hungary’s system allowing companies to allocate part of their corporate income tax (TAO) to support team sports and film productions operated effectively. This framework offered mutual benefits: sports and film projects received significant funding, while companies could achieve tax savings through their donations. However, recent legislative changes have tightened the conditions for TAO donations, making it increasingly difficult for businesses to utilise these support opportunities.
At the same time, the profitability of companies has declined due to economic challenges, putting additional pressure on sports organisations and film productions eligible for TAO support to secure the necessary funding.
Stricter conditions for supporting team sports
This year has already brought substantial changes to the TAO system for team sports, as discussed in our previous article. The main development is the introduction of stricter documentation requirements for the approval of sports development programmes, along with more detailed TAO accounting rules. These adjustments aim to make the support system more transparent and controllable, but they also result in additional administrative burdens for the organisations involved.
Moreover, the legislation sets an annual national support budget cap; once this limit is reached, no further team sport donations can be approved during that tax year. As a result, donations are currently only possible under individual authorisation.
Film production support: new limits and capped production costs
A government decree issued during the summer introduced further restrictions on film production support. The total eligible production cost of registered films has been capped at HUF 407 billion, meaning that no new film projects can currently be registered for support because the cumulative production cost limit set by the decree has already been reached.
Another amendment raised the maximum amount that may be held in the escrow account from HUF 69 billion to HUF 81 billion, effective since 2022.
In practice, this means it has become increasingly difficult for independent film productions to find sponsors through the TAO donation system, as payments from the escrow account are executed in a predetermined order of priority.
Further tightening expected in the autumn tax package
The draft of the Autumn 2025 Tax Package foresees additional restrictions. Although the proposal is still under public consultation, it would introduce more stringent conditions for issuing support and tax certificates.
Under the draft provisions, companies and sports organisations would be required to submit more detailed declarations of intent, financial statements, and potentially new forms of data reporting. In practice, this would mean that both donors and beneficiary organisations must provide comprehensive financial documentation and declarations proving the purpose, source, and use of the donated funds.
At the same time, the scope of eligible beneficiaries would be expanded — in addition to the Hungarian Olympic Committee, sports academies would also be included as potential recipients of TAO donations.
