In issue 2025/137 of the Hungarian Gazette, published on November 21, 2025, a law was announced on measures to reduce the tax burden on businesses, which amends a total of 11 pieces of legislation. Most of the changes will take effect from January 1, 2026, but some provisions will already be effective from December 1, 2025.

Among the amendments is that the expense ratio for sole proprietors using lump-sum taxation will increase in two steps: from 40% to 45% in 2026, and then to 50% in 2027.

The threshold for choosing VAT exemption will also gradually increase: to 20 million HUF in 2026, 22 million in 2027, and 28 million in 2028.
The scope of fringe benefits will be expanded to include housing support provided by law enforcement agencies.

Investment-related incentives will also be broadened. The development tax allowance will be supplemented with a new title aimed at ensuring manufacturing capacity for clean technologies. In addition, a tax allowance for energy development investments will be introduced, as well as an incentive for environmental protection investments, which can be claimed for projects worth at least 100 million HUF over six tax years.

The rules for retail tax will also change: the tax-free threshold will rise from 500 million HUF to 1 billion HUF, although the tax rates will remain unchanged.
The entry threshold for choosing the small business tax (KIVA) will double, from 3 billion HUF to 6 billion, allowing more businesses to take advantage of this simplified tax form.

The thresholds for the simplified annual report for micro-entities will increase by 20%: the balance sheet total from 150 million to 180 million HUF, and annual net revenue from 300 million to 360 million HUF.

Finally, the planned indexation of excise duty rates on fuels for 2026 will be postponed by six months, providing temporary relief for affected businesses.

We warmly welcome our clients to the conferences to be held in early December, where these changes will also be discussed.