The public consultation on the autumn tax package published by the Ministry of National Economy has concluded. Although it is not unprecedented for the final text submitted to Parliament to undergo significant changes, the proposal already reveals the main tax policy directions planned by the ministry.

The proposal on the amendment of various tax laws for administrative simplification and legal harmonization purposes (the “Proposal”) is not expected to fundamentally change Hungary’s tax system. The amendments mainly include clarifying and corrective provisions. However, taxpayers should pay attention to several changes in data reporting, and the introduction of automatic decision-making may further increase efficiency in tax administration.

Below is a summary of the key provisions of the Proposal, broken down by tax type.

Personal Income Tax

The Proposal introduces significant relief for individuals trading in crypto-assets: when offsetting income derived from crypto transactions, taxpayers will now be able to deduct not only losses from the previous two years but also losses declared in any earlier year. However, individuals will be required to maintain records of losses from crypto transactions, which must be reported as informational data in the annual tax return.

Corporate Income Tax

The Proposal clarifies the rules for research and development (R&D) tax incentives. After opting for the new type of R&D tax relief (introduced in 2023), companies would be able to make a new choice after five years instead of the previous six, aligning the rule with existing provisions that define the selection period as five years.

Another change provides that R&D activities carried out under contracts with higher education institutions, the Hungarian Academy of Sciences, or state-owned research institutes will also qualify for the standard rate of relief — up to 10% of eligible R&D costs. The upper limit of HUF 500 million remains applicable.

Small Business Tax (KIVA)

A simplification is proposed for small taxpayers and entities under the small business tax regime: electronic money will no longer be included in the valuation of cash holdings, reducing tax risk related to fictitious cash balances and simplifying administration. With this change, the legislator aims to align the rules with modern electronic payment solutions.

Global Minimum Tax

The package also refines the global minimum tax system. It introduces the concepts of “simplified covered tax” and “simplified effective tax rate,” and specifies the scope of recognized country-by-country reports and financial statements. These clarifications aim to promote international tax harmonization and full alignment with OECD guidelines, particularly concerning multinational enterprise groups.

Value Added Tax (VAT)

The amendments to VAT regulations mainly affect group taxation. The Proposal stipulates that if the designated group representative ceases to exist and the members fail to appoint a new one within 15 days, the tax authority will be authorized to appoint a new representative to ensure continuity. The rules on joint and several liability and legal succession are also clarified.

A change affecting all taxpayers concerns the domestic summary report (“M-sheets”): following the adoption of the Proposal, taxpayers will be required to report deductible VAT amounts broken down by tax rate.

Local Taxes and Duties

The definition of a “right of pecuniary value” will be expanded to include lessee rights and buyer’s rights under title-retention arrangements. The range of tax objects for which municipalities cannot impose local taxes will also broaden — in addition to agricultural land, forest ownership will now be excluded. Moreover, the verification of exemption related to residential construction will be standardized, and the waiver of shareholder loans during liquidation will become exempt from duty.

Advertising Tax

The 0% rate of the advertising tax will be extended for another year, remaining in force until 31 December 2026.

Social Security

Two key innovations are introduced in the field of social security. One is the introduction of a new insurance category — the “long-term commission-based legal relationship” — to provide clearer regulation for employment relationships that fall between standard employment and contract work.

A major development is the creation of the Comprehensive Legal Relationship Register (KJNY): this IT system will provide a single interface for querying insurance, contribution, and healthcare entitlement data, as well as for related administration. Payment of health service contributions and related reconciliations will thus be possible online and through mobile applications.

Tax Procedure Rules

The Proposal includes several important procedural clarifications.

The tax authority may delete a taxpayer’s tax number if the taxpayer fails to report its legal representative. In addition, the National Tax and Customs Administration (NAV) will automatically delete a tax number — without prior notice — if the taxpayer fails to submit a tax return within 90 days. Compared to the previous practice, this represents a major change, requiring companies and accountants to exercise greater caution to avoid missed filings.

Changes are also expected regarding the relationship between limitation periods and self-revision. Under the amendment, taxpayers may not submit self-revisions for already expired periods if a final court decision has been issued beyond the limitation period and the revision could affect another taxpayer’s VAT obligation. This limits legal remedies in cases where self-revision could have a chain effect on other taxpayers’ positions.

The Proposal would abolish the possibility of self-revision based on the unconstitutionality of a legal provision (Article 195 of the Tax Administration Act). Instead, taxpayers may submit an application to reduce their tax liability, which the tax authority will assess within 15 days, similar to self-revision cases.

A new procedure — automatic decision-making — will also be introduced in the tax administration system, applicable to cases where all necessary data are available and the decision does not require discretion.