First of Two Autumn Tax Packages Unveiled

The Hungarian Government introduced the first of two planned tax packages on 2 October 2025. A second package, aimed at tax cuts, is expected to follow in November. The proposal on amendments to various tax laws, focusing on administrative simplification and legal harmonization, proposes several important changes. In relation to the Small Business Tax (KIVA), if a company accumulates cash reserves, the Hungarian Tax Authority will not take electronically held funds into account. This means that balances kept on platforms such as Wise or Revolut will not be subject to penalties nor treated as part of the taxable base. Sole proprietors suspending their activities would be exempt from filing tax returns during the suspension period, provided they conduct no business.

Changes are also coming to property purchases that replace a previous sale. It will allow taxpayers to choose which previously sold property to deduct when calculating the duty base for a new home purchase, rather than being limited to their most recent sale. The Hungarian Tax Authority will gain direct electronic access to property records, speeding up verification processes. Individuals will also be able to request installment payments of up to HUF 2 million once a year, without late payment interest, even before the due date.

Additional measures include that late payment interest could only be charged for a maximum of three years, and the Hungarian Tax Authority would not require payment of interest below HUF 5,000. Furthermore, compensation paid by financial institutions to customers who have suffered losses due to phishing scams will become tax-exempt. Currently, such compensation is subject to personal income tax (PIT) and social contribution tax (szocho). The Government will also extend the suspension of the advertising tax by another year and introduce a “continuous declaration” for personal income tax exemptions, valid indefinitely.

The first package is expected to have a moderate fiscal impact of around HUF 10 billion. The forthcoming tax reduction package, which may include a 1 percentage point cut in the social contribution tax, could reduce state revenues by HUF 200–220 billion, according to preliminary estimates.