Comprehensive tax changes from 2026: significant relief, new benefits and stricter tax requirements

On the corporate side, one of the most important modifications is the encouragement of environmentally friendly investments, for which new tax breaks will also appear. These include a tax break related to new energy investments in the income tax of energy suppliers, and a tax break in corporate tax – through EU implementation – supporting the expansion of clean technology production capacity, which serves to replace an existing tax break and can be achieved with a support intensity of 15 percent in Budapest and up to 35 percent in rural areas. However, eligibility is subject to strict conditions: any excess of environmental limits entails permanent exclusion and repayment of the entire support plus a late payment penalty. The other new benefit focuses on the elimination of environmental damage and nature conservation investments, where the support intensity can be 70 or even 100 percent, up to a maximum of 30 million euros. The person causing the environmental damage is explicitly excluded from the group of eligible persons, and the Tax and Customs Administration (NAV) will conduct a mandatory inspection within three years after the first use.

A significant change is coming to the retail tax, where approximately 3,500 businesses can expect a lower tax burden from January due to the increased band limits: the tax-free band will last up to 1 billion forints instead of the previous 500 million forints, and the highest rate will come into effect above 150 billion forints. The amendment, which exempts services provided at gas stations from the scope of the retail tax, means more transparent regulation, but also aims to provide tax relief for smaller businesses.

From a company perspective, one of the central elements of the changes is the more detailed data content of VAT returns, which will come into effect from 1 July 2026. In the future, NAV will require that in the summary report, not only the deductible VAT included in the invoices, but also the tax actually deducted be indicated at invoice level, broken down by tax rate and proportionality. In practice, this means that companies must coordinate their return and accounting data with high data quality and accuracy. The undisclosed aim of the amendments is to encourage as many businesses as possible to use the eVAT system, which can reduce administration in the long term, but at the same time will mean serious data preparation tasks for companies in the first period of implementation. In parallel, the threshold for individual tax exemption will also be raised to HUF 24 million over three years, which will provide tangible relief to many small entrepreneurs.

However, the financial sector will be taxed under stricter conditions from 2026: the extra-profit tax for credit institutions and financial enterprises will be 10 percent of the tax base up to HUF 20 billion, and 30 percent above that. The upper limit for tax reductions based on the increase in the government securities portfolio will be reduced from 50 percent to 30 percent.

Another material relief for smaller companies is the increase in the threshold for small business tax: the sales revenue and balance sheet total required for entry will be HUF 6 billion, and the headcount limit will be 100 people, while remaining in the group can be ensured with a revenue of HUF 12 billion and a headcount of 200 people. A noticeable change for the public is that from 2026, the VAT on beef and certain offal will be reduced from 27 percent to 5 percent. The rules for personal income tax will also be amended, including the expansion of the scope of use of the SZÉP card and the introduction of new housing support elements.

The suspension of the advertising tax will be extended until the end of June 2026, but will return after that, but with the simplification that only half of the advance payment for the first, shorter tax year must be paid at a time chosen by the business. Although the measure affects a relatively narrow industry, the change in regulation may have a longer-term impact on media market players.

“Looking at the tax package as a whole, it is clear that the scope of the changes covers a wide spectrum, and therefore every business should review its processes and tax practices in the coming period”

– highlighted András Módos, Head of EY’s Tax and Legal Advisory business unit.