Summer Tax Package in Hungary

On 30 July 2026, the Hungarian Parliament adopted comprehensive changes to the tax system. The aim of the amendments was to simplify and rationalise the tax system, close loopholes for tax avoidance, abolish the privileges enjoyed by those linked to the previous government, carry out legal harmonisation tasks and bring EU funds back into the country.

One of the reasons was that the excessive number of tax categories placed a burden on both taxpayers and the state administrative system, while tax revenues were not commensurate with the costs of the complex administrative procedures. The new law therefore abolishes the dog tax, the immigration tax and certain local taxes. In addition, the carbon dioxide quota tax and transaction fee (which, according to a ruling by the Court of Justice of the European Union (CJEU), contravenes EU law) will be abolished, whilst the air pollution charge (the rate of which has remained unchanged since 2003) will be doubled.

The rules governing the special retail tax are also being amended: the requirement for affiliated companies to aggregate their tax bases is being abolished, meaning that from now on, the net turnover of subsidiaries of large retail companies will be calculated as significantly lower, resulting in a lower tax rate. According to the Minister for Finance, this was necessary to ensure compliance with EU rules, although the CJEU had previously ruled that the Hungarian legislation was compatible with EU law. The adopted tax package also introduces administrative simplifications to EU customs regulations.

Tax relief for public-interest asset management foundations performing public functions (in Hungarian: KEKVA) is to be abolished. The tax relief for monument protection projects will also be abolished. Under the previous rules, twice the cost of monument renovations, as well as the purchase price of the heritage property itself, could be deducted from the tax base. The taxation of asset management (trust) and private asset management foundations is also set to change, as the Government is required to abolish the tax exemption for these structures by 31 August as a condition for receiving EU Recovery and Resilience Facility (RRF) funds.

According to the new laws, the president of the National Tax and Customs Administration (in Hungarian: NAV) will no longer be a state secretary at the Ministry of Finance, which may ensure that all areas of the NAV operate solely on the basis of professional decisions, free from political influence.

On 30 July 2026, the Hungarian Parliament adopted comprehensive changes to the tax system. The aim of the amendments was to simplify and rationalise the tax system, close loopholes for tax avoidance, abolish the privileges enjoyed by those linked to the previous government, carry out legal harmonisation tasks and bring EU funds back into the country.

One of the reasons was that the excessive number of tax categories placed a burden on both taxpayers and the state administrative system, while tax revenues were not commensurate with the costs of the complex administrative procedures. The new law therefore abolishes the dog tax, the immigration tax and certain local taxes. In addition, the carbon dioxide quota tax and transaction fee (which, according to a ruling by the Court of Justice of the European Union (CJEU), contravenes EU law) will be abolished, whilst the air pollution charge (the rate of which has remained unchanged since 2003) will be doubled.

The rules governing the special retail tax are also being amended: the requirement for affiliated companies to aggregate their tax bases is being abolished, meaning that from now on, the net turnover of subsidiaries of large retail companies will be calculated as significantly lower, resulting in a lower tax rate. According to the Minister for Finance, this was necessary to ensure compliance with EU rules, although the CJEU had previously ruled that the Hungarian legislation was compatible with EU law. The adopted tax package also introduces administrative simplifications to EU customs regulations.

Tax relief for public-interest asset management foundations performing public functions (in Hungarian: KEKVA) is to be abolished. The tax relief for monument protection projects will also be abolished. Under the previous rules, twice the cost of monument renovations, as well as the purchase price of the heritage property itself, could be deducted from the tax base. The taxation of asset management (trust) and private asset management foundations is also set to change, as the Government is required to abolish the tax exemption for these structures by 31 August as a condition for receiving EU Recovery and Resilience Facility (RRF) funds.

According to the new laws, the president of the National Tax and Customs Administration (in Hungarian: NAV) will no longer be a state secretary at the Ministry of Finance, which may ensure that all areas of the NAV operate solely on the basis of professional decisions, free from political influence.