The tax package planned for 2027 combines tax cuts for employees with increases in several burdens on businesses. Although the corporate income tax change affecting large companies has attracted the most attention, it is unlikely to be the most significant development for most businesses in Hungary.
The innovation contribution, advertising tax, company car taxation, the cost of banking transactions and personal income tax on wages could affect a much wider range of businesses.
It is important to note, however, that these measures are still draft legislation at the time of writing. The government submitted the tax law amendments for the following year in October 2026, and Parliament has not yet adopted them. The rules and details may therefore still change during parliamentary debate. Most measures are scheduled to take effect on 1 January 2027.
Personal income tax: more employees could see higher take-home pay
The proposal would not reduce the standard personal income tax rate of 15 per cent. Instead, it would introduce a tax credit for those on lower and middle incomes.
For employees earning the minimum wage, the effective personal income tax burden would fall to 9 per cent. Above the minimum wage, the tax credit would gradually decrease and would be available up to a gross monthly income of approximately HUF 680,000. According to government calculations, this could increase take-home pay for minimum-wage earners by around HUF 20,000 per month.
For employers, this would not in itself reduce wage costs, since the tax credit reduces the personal income tax payable by employees.
The personal income tax relief for young people under 25 is expected to remain in place. However, a gross monthly income cap of HUF 1 million would be introduced for the various personal income tax exemptions available to mothers, with income above that threshold becoming subject to personal income tax.
The 9 per cent corporate income tax rate could remain for most businesses
Under the submitted proposal, corporate income tax would rise to 15 per cent for businesses and corporate groups with annual revenue of at least EUR 500 million. Below that threshold, the current tax rate of 9 per cent would continue to apply.
This means that the higher rate would not directly affect most small and medium-sized enterprises in Hungary.
For larger corporate groups, however, it may not be sufficient to consider only the Hungarian company’s own revenue. Group membership could also be decisive, meaning that a Hungarian company whose own revenue falls below the threshold could nevertheless come within the scope of the new rule.
The system of corporate income tax reliefs could also change. Reliefs related to research and development would be expanded, particularly where a business commissions R&D services from a Hungarian small business, university or research institution.
At the same time, the existing corporate income tax relief for supporting designated spectator team sports would be abolished. A new relief would, however, be introduced for supporting amateur sport.
A higher innovation contribution could affect more medium-sized businesses
Under the plans, the current innovation contribution rate of 0.3 per cent could rise to 0.5 per cent. Although this may appear to be an increase of just 0.2 percentage points, the contribution actually payable would increase by approximately two thirds if the tax base remained unchanged. The exemption for micro and small enterprises is expected to remain in place.
Official information on the submitted tax package also refers to changes in how the innovation contribution is calculated. The precise impact can therefore only be determined once the final rules and detailed calculation method are known.
The increase in the contribution could represent a substantial additional cost for medium-sized businesses even where profits are low, as the innovation contribution is not directly linked to a company’s accounting profit.
Affected businesses should therefore check their size classification, particularly if they have affiliated enterprises. Classification cannot always be based solely on the company’s own figures.
Retail tax could change
A new tax band could be introduced for businesses engaged in retail activities.
Under the proposed rules, the tax base would be taxed as follows:
- up to HUF 1 billion would remain tax-exempt;
- the portion between HUF 1 billion and HUF 50 billion would be subject to a tax rate of 0.45 per cent;
- above HUF 50 billion, the current tax rates would remain in place under the plans announced earlier.
The amendment could therefore affect more than just large retail chains. Medium-sized retail businesses with a tax base exceeding HUF 1 billion could also face the new payment obligation.
The rules on affiliated enterprises must also be considered when calculating the tax. As a result, a company that would fall within the tax-exempt band based on its own revenue could still incur a tax liability at group level.
Advertising tax could return
The current effective zero per cent advertising tax burden could end in 2027. The submitted bill would introduce progressive tax bands:
- the first HUF 500 million of advertising revenue would be tax-exempt;
- the portion of revenue between HUF 500 million and HUF 10 billion would be taxed at 2.5 per cent;
- the portion between HUF 10 billion and HUF 40 billion would be taxed at 4.5 per cent;
- the portion above HUF 40 billion would be taxed at 7.5 per cent.
The system would be progressive, meaning that the higher rate would apply only to the portion falling within the relevant band, rather than to the company’s entire advertising revenue.
Advertising tax primarily affects advertising publishers directly, but businesses purchasing advertising should also monitor the change. Publishers’ declarations, the terms of advertising contracts and the extent to which service providers pass the tax burden on to their clients could once again become significant.
The return of advertising tax could therefore create additional costs or administrative requirements even for businesses that do not themselves become liable for the tax.
Company car tax and motor vehicle tax: the tax burden could rise for businesses with several company cars
Under the plans, motor vehicle tax would remain deductible from company car tax for the first company car, provided it is not a high-powered vehicle. This deduction would, however, be abolished from the second company car onwards. Company car tax payable on high-powered passenger cars could also increase.
The change could affect more than just companies with large vehicle fleets. Small and medium-sized businesses using two or more passenger cars in their operations could also face additional costs.
The detailed rules will need to clarify how the first and subsequent company cars are identified, and how purchases, sales or replacements of vehicles during the year should be treated.
Banking transaction levies could rise
Under the submitted proposal, the transaction levy would increase for larger financial transactions. At the same time, the levy-exempt threshold for personal bank transfers would be raised to HUF 150,000.
For businesses, the main question will be the extent to which financial institutions reflect the higher levy burden in their account maintenance and transaction fees.
Tax burdens on certain sectors and products could also increase
The planned tax package envisages higher taxes and levies on, among others, energy companies, banks, insurers, mining companies and certain environmentally harmful activities. The tax burden on some tobacco products and beverages with a higher alcohol content could also rise.
How businesses can prepare themselves for the 2027 tax changes
As these measures are still draft legislation, it would be premature to prepare final tax calculations. However, the broad direction of the changes is already apparent, so businesses should consider several possible scenarios when planning for 2027.
Once the final rules have been adopted, businesses should therefore examine not only each tax separately, but also how the changes collectively affect their profit and cash flow in 2027.
This summary is based on the bills submitted on 27 October 2026 and the related official information published up to 28 October 2026. The proposed rules may still change during parliamentary debate. This article provides general information and does not replace an assessment of an individual tax situation.