Summer tax package 2026
We would like to inform our Clients that a bill containing the latest tax package has been submitted to the Hungarian Parliament (hereinafter referred to as the “Bill” or “Proposal”). The significance of the Proposal lies in the fact that it aims to fulfil Hungary’s tax-related commitments associated with accessing funds under the Recovery and Resilience Facility (RRF). Below we summarize the most important proposed tax changes.
Trusts / Asset Management Foundations
Significant Proposed Changes
As of 31 August 2026, the Proposal would substantially reshape the rules governing trusts and private foundations.
For structures already in existence or established before the entry into force of the new rules, transitional provisions would apply, which – subject to certain clarifications – would continue to apply the current rules unchanged.
For structures established under the proposed new regime, the tax advantage related to asset revaluation would cease, meaning that increases in asset value could no longer become tax-exempt after five years. In addition, new rules would apply to distributions of trust assets: the tax treatment would depend on whether the initial capital is distributed in its original form or otherwise. Although returns would continue to be taxed as dividends, the tax characterization of distributions would be determined by newly introduced ordering rules.
Mandatory Audits
The Proposal would introduce a mandatory audit plan and assessment criteria for the tax authority, placing particular emphasis on identifying arrangements established through abusive practices.
According to the Proposal, the Hungarian Tax Authority (NAV) would be required to review trusts and private foundations managed by trustees registered before 12 September 2023. Furthermore, from 1 January 2028, the tax authority would be required to examine all trusts and private foundations within the applicable statute of limitations period.
Further details on the planned amendments can be found in our newsletter.
Corporate Income Tax
Tax Base Allowance Related to Support for Public Interest Asset Management Foundations (KEKVAs)
According to the Proposal, the various tax base allowances related to supporting public interest asset management foundations (KEKVAs) and institutions maintained by them would be abolished as of 1 August 2027.
The 300% tax base allowance available for support provided under higher education support agreements to universities maintained by KEKVAs, or their founders, could be claimed for the last time in the 2027 tax year.
Simultaneously, expenses recognized in connection with support granted to KEKVAs would no longer be expressly classified as costs incurred in the interest of business activities under the relevant legislation.
In line with the corporate income tax rules, the same change would apply to the income tax of energy suppliers (the “Robin Hood Tax”). Consequently, expenses related to support granted to KEKVAs would no longer be recognized for tax base purposes, and no exception would apply to the tax base increase generally required for grants and donations.
Tax Base Allowances Related to Cultural Heritage Protection
Under the Proposal, tax base allowances available for the preservation of protected historic buildings could be claimed for the last time in the 2026 tax year. This would apply equally to allowances related to investments, renovations, and maintenance activities.
Tax base allowances acquired previously but not yet utilized, including those received from related parties, could no longer be carried forward to tax years after 2026.
Abolition of the Growth Tax Credit Regime
The Proposal would also abolish the benefits associated with the Growth Tax Credit regime as of 1 January 2027.
Growth Tax Credit balances established before 2027 and not yet settled would continue to be administered according to the rules in force on 31 December 2026, meaning the relevant tax liability could still be paid under the special payment schedule.
However, investment tax benefits could no longer be claimed against tax installments due after 2026.
Local Taxes and Other Taxes
The Proposal would elevate to statutory level a provision currently regulated by government decree that simplifies local business tax prepayment rules for successor entities participating in a demerger.
Under the simplified approach, the predecessor entity could also make declarations regarding the tax obligations of the successor entity and transfer any excess tax payments available on its tax account to the successor's tax account. Such transferred amount would be deemed a payment made by the successor entity.
The amendment would enter into force on 14 May 2026, in line with the effective date of the current government decree.
From 1 January 2027, municipalities would no longer be permitted to levy a municipal tax.
Furthermore, both the dog control contribution and the special immigration tax would be abolished as of 26 August 2026.
Value Added Tax (VAT)
According to the Proposal, the reporting obligation concerning received invoices would remain unchanged after 1 July 2026.
As previously indicated by the Ministry of Finance, the rules regarding the M-sheets (itemized VAT reporting) would not be amended at this stage. Therefore, taxpayers would not be required to provide itemized data on the amount of VAT actually deducted.
Retail Tax
The Proposal would supplement Act XLV of 2020 on Retail Tax with a new Section 11/B, providing that Subchapter 5, repealed by the 2026 amendment law related to the implementation of the Recovery and Resilience Plan, would no longer apply for tax years beginning in 2026.
In practice, this means that the tax base aggregation rule set out in Section 5 of the Retail Tax Act would be phased out from the 2026 tax year.
However, it is important to emphasize that this does not automatically provide retailers with unrestricted opportunities for restructuring. The general anti-avoidance rules (GAAR) must still be carefully observed.
Green Tax
The Bill would abolish the carbon quota tax with retroactive effect and establish rules governing the refund of tax previously paid, together with related interest.
Taxpayers may apply for the refund within 90 days following the entry into force of the amendment.
In addition, the rates of certain air pollution charges linked to emissions of specific pollutants would double from 1 October 2026.
Customs
The Proposal introduces measures aimed at the digitalization and simplification of customs procedures.
In addition, the amendment would remove the provision allowing customs authorities to refrain from issuing a decision regarding VAT payable on consignments valued below EUR 150, which were previously eligible for customs duty exemption.
Furthermore, the payment relief available for customs duties and VAT liabilities below EUR 10 would also be abolished.
National Tax and Customs Administration (NAV)
The amendment would terminate the state secretary status of the President of NAV.
The authority to appoint and dismiss the President would be transferred to the ministerial level.
