The aim of the tax package adopted under an accelerated procedure on 18 November 2025 is to reduce the tax burden on businesses, cut red tape, and continue the digitalisation of tax procedures. According to the explanatory memorandum to the legislation, the government’s objective is to maintain the competitiveness of the domestic tax environment and to ensure more predictable financial and administrative conditions for small and medium-sized enterprises and sole traders.
In our expert summary, we present the most important tax changes and explain their practical implications for businesses.
1. Corporate income tax
New tax allowances
The 2025 autumn tax package introduces two new investment incentive tax allowances.
- One is a tax allowance supporting the remediation of environmental damage, which may be claimed for investments with a present value of at least HUF 100 million. The allowance may be applied for six tax years, and a significant portion of the investment value – depending on the size of the enterprise, up to 70–90% – may be deductible. An important condition is that a notification must be filed with the designated ministry before the allowance is claimed, and the allowance is not available to an enterprise that caused the environmental damage to be remediated.
- The other new element is the development tax allowance for investments securing manufacturing capacity for so-called clean technologies, which replaces the earlier TCTF-based transitional development tax allowance. The CISAF-based tax allowance may be linked to investments that contribute to the green transition (e.g. battery production, solar panels, heat pumps, CO₂ capture technologies). The allowance may be applied up to 80% of the calculated tax and is subject to prior notification to the ministry (and to approval by the European Commission for aid exceeding EUR 150 million in Budapest and EUR 350 million in other regions).
Both allowances create significant tax saving opportunities; however, given the complexity of the rules, it is advisable to model the tax impacts of investments in advance and to harmonise them with other forms of aids. Inthe large corporate environment, additional factors – such as the global minimum tax – may also influence the actual effect of the allowances, so multinational groups in particular should carry out comprehensive advance planning.
2. Value added tax
Increase of the exemption threshold for small taxpayers
The change affecting the personal exemption from VAT for small taxpayers is intended to reduce the administrative burden on micro-enterprises. The higher threshold is expected to significantly improve the liquidity of sole traders and small businesses, as fewer transactions will fall within the scope of VAT and tax return obligations will be reduced.
The gradual increase of the VAT exemption threshold in three steps is scheduled over several years:
| 1 January 2026 | HUF 20 million |
|---|---|
| 1 January 2027 | HUF 22 million |
| 1 January 2028 | HUF 24 million |
The taxpayer may opt for personal exemption from VAT as a small taxpayer for 2026 if the rolling annual total consideration received or to be received for all domestic supplies of goods and services does not exceed HUF 20 million in 2025 actually, and in 2026 neither reasonably expected nor actually exceeds this amount.
New mandatory boxes on M-sheets
In the recapitulative statements attached to VAT returns relating to tax periods including 1 July 2026, data will have to be provided not only on the VAT charged on the invoice but also on the VAT deducted.
3. Personal income tax
Favourable changes for flat-rate taxpayers
One of the key elements of the autumn tax package is the reduction of the tax burden on sole entrepreneurs applying flat-rate taxation. The current 40% general cost flat rate will increase in two steps:
- from 1 January 2026 the applicable general cost flat rate will be 45%,
- from 1 January 2027 it will increase to 50%.
In practice this means that the taxpayers concerned – primarily those engaged in service activities – will be able to treat a larger portion of their revenues as costs, thereby reducing their personal income tax base and achieving a direct tax saving.
The amendment primarily benefits those who operate with a low cost ratio and whose activity is mainly based on their own labour/knowledge. For them, the higher cost rate makes flat-rate taxation significantly more competitive and in many cases more favourable than taxation based on entrepreneurial income.
Entrepreneurs may find it worthwhile to carry out an advance impact assessment, as the increase in the cost rate may also affect their expected tax advance payments.
4. Social contribution tax
Changes for full-time sole entrepreneurs and associated entrepreneurs in business entities
From 1 January 2026, the currently applied multiplier of 112.5%, which determines the social contribution tax base of full-time sole entrepreneurs and associated entrepreneurs in relation to the social security contribution base, will be abolished. Under the amendment, the minimum social contribution tax base will be 100% of the minimum wage or the guaranteed minimum wage.
The advantage of the change is that the calculation of the payable burden becomes more transparent and the monthly payable amount may decrease for many entrepreneurs.
In addition, from 2026 not only sole entrepreneurs applying flat-rate taxation, but also those applying taxation based on entrepreneurial income will have to file a social contribution tax return on a quarterly basis.
- Accordingly, the Act on the Rules of Taxation (Art.) will be amended, eliminating the difference between sole traders applying different forms of taxation.
- The quarterly tax return must show the payable public charges broken down by month.
- The social contribution tax for the quarter must be paid by the same deadline as the filing deadline, i.e. by the 12th day of the month following the quarter in question.
5. Small business tax (KIVA)
The thresholds for opting for KIVA will increase as of 1 December 2025, so that from 1 January 2026 taxpayers can already choose KIVA based on the higher thresholds:
Based on current data, a number of companies operate which have already exceeded the previous HUF 3 billion entry threshold but have not yet reached the new HUF 6 billion revenue and balance sheet total thresholds or the headcount limit of 100 employees, so they may now, for the first time, have a realistic opportunity to opt for KIVA. Furthermore, due to changes in the headcount criterion and other indicators, additional enterprises that previously fell out of the regime due to a slight excess over the limits may also enter the system.
It is important that those who wish to choose this form of taxation from 2026 can do so by the end of the year.
The increase of the exit threshold to HUF 12 billion means that growing enterprises can remain under the KIVA regime for longer, making the scheme more suitable not only as an entry point but also as a long-term tax strategy.
Another change under the KIVA Act concerns one component of the tax base related to staff costs. Under the rules currently in force, for members and full-time partners in business entities, the staff cost attributable to the member is deemed to be 112.5% of the minimum wage if the staff cost attributable to the member is lower than this amount. Under the amendment, from 2026 – in line with the changes in the Social Contribution Tax Act – the amount of the minimum wage will form the KIVA base in such cases.
6. Special taxes and other windfall profit taxes
Retail tax – new bands, differentiated impacts
Another key element of the autumn tax package is the modification of the bands for the retail tax. The lowest band will be completely restructured: instead of HUF 500 million, the threshold for liability will be HUF 1 billion, meaning that several thousand small businesses may be exempted from paying the retail tax.
| Tax rate | Current band | Amended band |
|---|---|---|
| 0% | HUF 0 – 500 million | HUF 0 – 1 billion |
| 0.15% | HUF 500 million – 30 bn | HUF 1 billion – 50 billion |
| 1% | HUF 30 – 100 billion | HUF 50 – 150 billion |
| 4.5% | above HUF 100 billion | above HUF 150 billion |
The new bands may bring relief not only for the smallest taxpayers: the upward shift of the lowest band and the changes in the subsequent steps may result in a broader reduction of the tax burden, primarily in the SME segment, but the tax burden of the largest retail chains and platform operators may also fall significantly, as they will only have to pay the highest rate above HUF 150 billion instead of the previous HUF 100 billion.
Advertisement tax
The rate of the advertisement tax has been 0% since 1 July 2019, and the Government has extended this rate each year. The 2025 autumn tax package, however, contrary to previous practice, extends the applicability of the 0% rate only until 30 June 2026, meaning that the advertisement tax will be reintroduced from the second half of 2026.
In line with the reintroduction, the registration rules related to advertisement tax will also change. Anyone who publishes advertisements and does not have a tax number – typically foreign advertising providers – will be required to register within 30 days. Failure to do so may result in a substantial fine. Significant fines may also be imposed for failure to meet the obligation to make declarations.
7. Excise duty
Postponement of the indexation of the excise duty on fuels
The inflation-linked increase of excise duty will enter into force six months later than planned, so the expected price increase of petrol and diesel will be temporarily postponed. This amendment may be favourable for businesses sensitive to logistics and transport costs.
8. Tax administration and procedural rules
Changes in administrative requirements
The tax package is aimed not only at reducing the burden on businesses but also at modernising the rules of tax administration and procedures.
- Automated decision-making and digital procedures
The amendment to Act CLI of 2017 on tax administration (Air.) stipulates that the tax authority may conduct procedures by means of automated decision-making where the conditions set out in Act CIII of 2023 on state digital services (Dáptv.) are met, and where all relevant data are available and do not require discretion. This development is intended to make tax authority procedures faster and more predictable, while the substantive review function of remedies remains unchanged.
- Digitalisation of enforcement procedures
The amendment to Act CLIII of 2017 on enforcement (Avt.) allows the record drawn up during on-site procedures to be prepared in electronic form and served electronically. This change improves the documentation and transparency of enforcement procedures.
- Fine-tuning of the Act on the Rules of Taxation (Art.)
Act CL of 2017 on the Rules of Taxation (Art.) is amended in several respects: for example, in the event of the suspension of activities by a sole trader, any tax return obligation for the period not covered by the annual return will cease to exist if the suspension covers the entire period concerned. In addition, the tax authority’s access to land registry data will be provided electronically, and terminological clarifications of legal institutions will be introduced.
9. Income tax of energy suppliers (“Robin Hood tax”)
Tax allowance for energy development investments
For energy development investments commenced after 31 December 2025, enterprises may claim a new targeted tax allowance from 2026. The objective of this measure is to encourage the modernisation of energy systems for production and infrastructure, with a particular focus on efficiency-enhancing and environmentally conscious developments.
The tax allowance may be applied in the tax year in which the investment is put into operation and in the five subsequent tax years, i.e. for a total of six tax years (base year + 5 years).
The upper limit of the allowance is defined in several steps:
- the tax allowance may reduce the calculated tax decreased by other tax allowances by up to 80%, i.e. it may not reduce the tax liability to zero;
- the amount of the allowance may not exceed 50% of the difference between the eligible costs of the investment and the adjusted depreciation.
Eligible costs include the acquisition cost of tangible and intangible assets related to the investment, reduced by any non-repayable grants received for the project. This means that the allowance may actually be taken into account only in respect of the enterprise’s own expenditure.
Conditions for eligibility include:
- the achievement of specified technical indicators for the investment, and
- the continuous use of the assets concerned for at least five years.
An important compliance element is that the tax authority (NAV) will be required to audit the conditions within three years from the first year of claiming the allowance, so the documentation and monitoring of performance indicators related to investments will become particularly important.
By applying the allowance, a substantial reduction in the tax burden can be achieved; however, due to the complexity of the rules and the mandatory tax authority audit, it is advisable to carry out preliminary financial and tax planning calculations.
