NEWSROOM

Mandatory Liability Insurance for Construction Contractors Effective 15 January 2025

Based on the contents of the government decree on construction works in effect since 1 October 2024, all domestic construction or design firms and self-employed persons must have compulsory contractors' liability insurance starting from 15 January 2025.

Mandatory Land Exchange for New Solar Power Plant Investments

The new Hungarian Architecture Act stipulates that areas designated as green zones, agricultural zones or forest zones cannot be selected as new development zones or special non-development zones.

Significant changes to the taxation of vehicles

By passing the proposed bill on 25 November 2024, the Hungarian Government enacted significant changes to the taxation of company vehicles, set to take effect in 2025 and beyond. These modifications aim to increase tax revenues and promote the adoption of environmentally friendly vehicles.

Good news for startups and investors: the IP contribution is tax-free

On 1 January 2025, inter alia, an amendment to the Personal Income Tax Act relating to intellectual property (IP) contribution entered into force. According to the amendment, if an individual who creates an intellectual property (the original IP right-holder) transfers its IP to a business company as an in-kind contribution, he/she will not have to pay income tax on the share he/she acquires in the company up to the contribution’s value indicated in the company's articles of association (practically the market value).

Increasing tax burden on energy in Hungary

As part of the fall tax package, the Hungarian Government proposed an automatic, inflation-tracking increase of tax on, inter alia, energy products as of 2025. The actual increase from 1 January 2025, however, significantly exceeds the current (and expected) inflation levels. This might concurrently lead to increased inflation again.

Changes in the local taxes from 1 January 2025

It is likely that the introduction of the payment obligation of local business tax surplus also contributed to the fact that several municipalities decided to increase certain local taxes from 1 January 2025.

The Hungarian ESG Act is amended once again

The amendment package includes several minor amendments to help interpreting the text of the Hungarian ESG Act, and the provisions of the ESG Act have been brought into line with the content of the regulations supplementing the provisions of the ESG Act in several places. The amendments entered into force on 19 January 2025.

New VAT rules for small enterprises in the EU

Changes in the SME VAT scheme will open the VAT exemption simplification to cross-border activity from 1 January 2025. If conditions are met, eligible businesses may benefit from the SME scheme in other Member States.

EU gates open to illegal immigrants in Spain

On 19 November 2024, the Spanish government announced a major change to its immigration law. The reform will allow 300,000 undocumented illegal immigrants to obtain residence and work permits every year for the next three years. The reform package would also make it easier and longer for immigrants to obtain visas.

"Temu tax" could make online shopping more expensive from January

Following the restrictions in the Far East, all companies operating online marketplaces in Hungary can expect significant tax changes and a new tax burden from January 2025. The change may also affect the very competitive prices that have been the main reason for the popularity of the big platforms and their competitive advantage over domestic retail. One of the most significant provisions of the autumn tax package is the one that would extend the special retail tax to so-called platform operators. The tax liability would fall on the foreign or domestic operator of the online marketplace for sales made by retailers through the platform. Platform operators are defined as web shops or applications that mediate sales between professional sellers and their customers. Examples include Temu, Wish or, for example, Amazon.