Updated Overview for 2026
The Hungarian tax system is known for its complexity and specific rules for taxing legal entities and individuals. Thanks to the lowest corporate tax rate in Europe and structured local taxes, Hungary is an attractive environment for business. This article thoroughly discusses key aspects of taxation in Hungary, including corporate income tax, local taxes, innovation contributions, VAT, and the specifics of individual taxation.
DISCLAIMER: Although we strive to ensure that the information found in this article is as accurate as possible, we do not take responsibility for the incorrect use or accuracy of its content. The field of taxation is very complicated and dynamic, so the content of this article may differ from current regulations.
The corporate income tax rate in Hungary is 9%. This is the lowest corporate tax rate in the European Union, also applicable in 2026.
Tax losses in Hungary can be carried forward to subsequent tax periods, however, in one tax period, a tax loss of a maximum of 50% of the tax base can be deducted. Losses incurred from 2015 onwards can be carried forward for tax purposes for a period of 5 years. Losses incurred in a tax period starting in 2014 can be carried forward for tax purposes until the tax period including December 31, 2030.
Companies must file their tax returns and pay the remaining tax by May 31 of the year following the tax period.
Corporate income tax prepayments in Hungary must be paid:
• In 12 equal monthly installments if the tax liability exceeds HUF 20 million in the previous tax period.
• Quarterly if the tax liability does not exceed HUF 20 million in the previous tax period.
2026 UPDATE: As of January 1, 2026, the limit for monthly prepayment has increased from HUF 5 million to HUF 20 million. This change reduces the administrative burden for an estimated 10,000–15,000 companies.
The Corporate Income Tax (CIT) can be increased up to 15% for multinational or large domestic corporate groups (Global Minimum Tax Pillar Two) if the consolidated financial statements of the parent company show revenues exceeding EUR 750 million in at least two of the last four years. In 2026, stricter penalties were introduced for non-compliance with reporting obligations related to the global minimum tax.
Local self-governments can impose taxes on land and buildings located within their territory. The most important and frequently introduced local tax is the business tax. The maximum rate for local business tax is 2% of the tax base.
Some local self-governments impose taxes on land and buildings:
• For land: area-based tax – HUF 200 per m², or up to 3% of the adjusted market value.
• For buildings: area-based tax – HUF 1,100 per m², or up to 3.6% of the adjusted market value.
Generally, a 4% transfer tax applies to real estate transfers, calculated on the property's price including VAT or its market value. The buyer is responsible for paying this tax.
Companies that buy, sell, or lease real estate as part of their ordinary business activities are subject to a preferential 2% transfer tax when acquiring property.
The innovation contribution rate is 0.3% of business profit. Newly established entities in their calendar year of establishment, as well as small and medium-sized enterprises (SMEs), are not subject to the innovation contribution.
A Hungarian entity belonging to a group of companies is exempt from the innovation contribution if the group's total number of employees is less than 50 and the combined revenue and balance sheet assets do not exceed EUR 10 million.
Corporate vehicle tax is paid quarterly. The tax amount depends on the vehicle's environmental classification and engine performance, ranging from HUF 14,000 to HUF 81,000 per month.
The general tax rate is 15%.
From 2025, restrictions apply to the application of exemptions – the exemption for individuals under 25, the family allowance, and the newlywed allowance are only available to EEA citizens and citizens of neighboring non-EEA countries. From 2026, the family tax allowance will double compared to its original amount.
Special exemptions (up to HUF 576,601 per month):
Individual incomes are categorized as follows:
UPDATE 2026: From January 1, 2026, the 112.5% multiplier for calculating the social contribution base for sole traders and personal companies (self-employed persons) will be abolished. The minimum wage increases to HUF 322,800/month, and the guaranteed minimum wage to HUF 373,200/month.
Individuals are subject to a 4% transfer tax on the transfer of apartments and residential buildings.
The standard VAT rate is 27% – the highest in the European Union. Some goods and services are subject to a reduced rate:
UPDATE 2026: From January 1, 2026, the VAT rate on beef, offal, and slaughter by-products of cattle decreased from 27% to 5%.
Certain transactions carried out in Hungary are exempt from VAT, for example:
UPDATE 2026: From January 1, 2026, the annual turnover threshold for small businesses to be exempt from VAT increased from HUF 18 million to HUF 20 million. Further increases are promised for 2027 and 2028 (to HUF 22 million and HUF 24 million, respectively).
The National Tax and Customs Administration (NAV) has introduced requirements for electronic disclosure of invoice details. In 2026, significant changes are underway in VAT compliance:
The frequency of VAT return submissions can be monthly, quarterly, or annual, depending on the amount of VAT due.
Hungary offers attractive tax conditions, combining low rates with strict administration and electronic submission rules. The year 2026 brings several important changes: an increase in the limit for monthly CIT prepayments, a reduction in VAT on beef, an increase in the VAT exemption threshold for small businesses, and the abolition of the 112.5% multiplier for self-employed individuals. At the same time, extensive digitalization of tax administration is underway (e-receipts, discontinuation of the ÁNYK system).
If you plan to enter the Hungarian market or are already doing business in this region, it is important to understand the specifics of tax legislation and monitor ongoing changes. Expert advice can be key to successfully managing your tax affairs in Hungary.
Article updated: June 2026
The data you enter into this form is processed solely for the purpose of handling your specific request. More information about personal data processing can be found here.
.png)
