Several tax policy measures directly affecting both individuals and businesses were announced during the presentation of the Hungarian budget plans for 2027. The plans include personal income tax reductions, additional tax burdens affecting certain large corporations and sectors, as well as significantly expanded business development support programmes.
It is important to note that the detailed legal provisions are not yet known. Accordingly, we summarise below the budgetary and tax policy plans announced on 19 October 2026, excluding the two most far-reaching proposed measures, the wealth tax and the new low-tax regime (KATA), both of which are discussed in detail in separate articles.
Tax increases affecting businesses
Approximately 11% corporate income tax for the largest companies
According to the announcement, the proposed change in corporate income tax would target businesses with annual revenue exceeding HUF 180 billion, while the general corporate tax burden of small and medium-sized enterprises is not expected to change. Based on government communications, the tax burden of the largest companies may increase, although it would still remain below the 15% rate of the global minimum tax: the tax rate is expected to rise to 11%.
What should companies prepare for?
- preliminary modelling of the effective tax burden for 2027,
- review of existing corporate income tax incentives and subsidies,
- reassessment of the timing of investments and significant transactions,
- analysis of interactions with the global minimum tax,
- assessment of how the revenue threshold would apply within corporate groups.
To evaluate the actual impact, it will be necessary to wait and see whether the additional burden is introduced through a higher corporate income tax rate, a minimum tax, a special tax, or restrictions on available tax incentives.
A changing tax incentive system
According to the Hungarian budget plans for 2027, companies should also prepare for a restructuring of the tax incentive system. The changes are expected to affect primarily future investments, although their impact on ongoing investments cannot be ruled out. Activities generating higher added value may gain greater prominence within the investment promotion system, particularly incentives supporting research and development and innovation.
According to the announcement, the sports corporate tax allocation scheme (sports CIT scheme) may be replaced by a direct state budget support system with an allocation of approximately HUF 150 billion. The change would affect:
- businesses supporting spectator team sports,
- sports organisations receiving support,
- parties involved in the administration of corporate tax allocations.
How should companies prepare?
Businesses should review under what legal basis and conditions they will be able to maintain their sports-related sponsorship activities in the future. On the side of sports organisations, new application, financing, reporting and compliance requirements may emerge.
Innovation contribution: additional burden may affect larger businesses
According to the announcement, the rules governing the innovation contribution may also change. The budget expects a total of HUF 260 billion in additional revenue from measures affecting corporate income tax and the innovation contribution. The new rate of the innovation contribution could be 0.5%, although any potential tiered structure remains unknown at this stage.
Who could be affected by the increase in the innovation contribution?
The change would primarily affect the current taxpayers subject to the innovation contribution, namely:
- domestic companies that do not qualify for the exemption available to micro and small enterprises,
- as well as Hungarian branches and permanent establishments of foreign companies.
Particular attention should be paid to companies belonging to corporate groups, as the assessment of company size and exemption criteria also takes into account the data of partner and linked enterprises. Similar to corporate income tax, this measure would also increase companies’ effective tax burden, making it important to analyse its implications in relation to the global minimum tax.
What should companies prepare for?
Based on the currently available budget plans, it is not yet possible to determine what proportion of the anticipated HUF 260 billion additional revenue would derive from changes to corporate income tax and what proportion from changes to the innovation contribution. Therefore, the actual additional burden on businesses can only be modelled once the legislative proposal is published.
Advertising tax may increase to 3.75%
Under the Hungarian budget plans for 2027, the current 0% advertising tax rate could increase to 3.75%. According to the announcement, the measure is expected to generate approximately HUF 14 billion in additional budget revenue.
The change may primarily affect:
- advertising publishers,
- media companies,
- major players in the digital advertising market.
What should corporate customers do?
Depending on the detailed rules, administrative obligations or even tax liabilities may also arise on the advertiser’s side. Businesses purchasing advertising and marketing services should review:
- their contracts,
- their invoicing processes,
- whether they possess the necessary declarations and supporting documentation.
Taxation of company cars may change
According to the plans, the tax burden of businesses operating only one company car would not increase. However, from the second company car onwards, motor vehicle tax would no longer be deductible from the company car tax. In addition, the tax burden on high-performance vehicles may also increase.
How should companies prepare?
Businesses operating vehicle fleets should assess the potential additional tax burden in advance and review ownership, leasing and vehicle-use arrangements.
Higher contributions from banks, insurers, energy companies and retail chains
According to the budget plans, energy companies, banks, insurers and larger retail chains may face further increases in public charges. The government expects HUF 100 billion in additional revenue from higher payments by energy companies alone.
As regards the retail tax, the Hungarian budget plans for 2027 propose increasing the tax rate applicable to the tax base between HUF 1 billion and HUF 50 billion to 0.45%. A longer-term review of the tax is also envisaged, although neither its timing nor direction is known at present.
Which businesses could be affected by the planned sector-specific tax increases?
The changes may directly affect businesses operating in the sectors concerned and may indirectly impact their customers, suppliers and contractual partners if part of the additional burden is passed on through prices or service fees.
Higher mining royalties and stricter environmental taxation
One important element of the Hungarian budget plans for 2027 is the increase in charges related to the use of natural resources. The budget expects HUF 37 billion in additional revenue from higher mining royalties. In addition, environmentally harmful activities may become subject to higher tax burdens.
Environmental obligations will remain in place According to the announcement, payment of the higher public charges will not exempt businesses from complying with environmental regulations. In other words, tax compliance and regulatory compliance will remain separate obligations.
Business development subsidies in 2027
More funding for business development
According to the Hungarian budget plans for 2027, HUF 230 billion will be allocated to business development in 2027, more than double the amount available this year. In addition, developments financed from EU funds may receive HUF 928 billion in additional resources according to the announcement (Hungarian New Deal). The Ganz Ábrahám corporate loan programme and the related support schemes are primarily intended to promote:
- corporate investment,
- technological development,
- knowledge enhancement,
- strengthening supplier capacities,
- the growth of micro, small and medium-sized enterprises.
In addition to the expansion of business development funding, substantial additional resources may also become available for energy investments. According to the announcement, an HUF 868 billion energy programme is planned, including the development of 3 gigawatts of energy storage capacity by 2030.
Tax burden may increase on tobacco products and spirits
The announced package also includes higher taxation of tobacco products and distilled spirits. The exact tax rates and details of implementation have not yet been disclosed.
Tax changes affecting individuals
9% personal income tax on the minimum wage
Under the new tax policy plans, the personal income tax burden on the minimum wage would decrease from 15% to 9% from 2027 onwards. According to the announcement, the tax burden of individuals earning less than HUF 680,000 per month may also be reduced.
The measure could affect approximately 2.5 million individuals, primarily employees earning:
- the minimum wage,
- the guaranteed minimum wage,
- lower or medium-level salaries.
How should employers prepare for the PIT reductions?
The detailed rules will determine whether the personal income tax reduction will take the form of:
- a separate preferential tax rate,
- a tax credit,
- or another income-related tax benefit.
Employers and payroll professionals should therefore prepare in a timely manner for changes affecting:
- payroll systems,
- tax advance declarations,
- internal processes.
Mothers’ tax benefit will be restricted
Under another personal income tax-related change, the tax benefit available to mothers would remain in place only up to an annual income threshold of HUF 1 million, while personal income tax would have to be paid on income exceeding that amount.
Mothers with two children over the age of 40 would no longer be eligible for tax exemption. However, the family allowance would double.
Housing and energy-related subsidies
The 5% preferential VAT rate applicable to the sale of new homes would remain in force in 2027 as well.
The baby-expecting loan scheme (Babaváró), CSOK, rural CSOK and the household utility price support scheme would also remain available.
The Wekerle Plus programme would replace Otthon Start. Individuals between the ages of 18 and 41 could obtain loans with:
- a fixed interest rate of 3% for the purchase or construction of a new home,
- a fixed interest rate of 5% for the purchase of a used property.
A new state-supported home savings scheme would also be introduced:
- contributions made during the first five years would receive a 10% state top-up,
- from the sixth year onwards, the state contribution would increase to 20%.
The maximum amount available under the energy-efficiency modernisation loan programme would increase from HUF 6 million to HUF 15 million, accompanied by a non-refundable grant of 30-50%. For properties with the lowest energy-efficiency ratings, support could reach HUF 7.5 million.
What should businesses and taxpayers monitor in the coming period?
The package of measures announced as part of the Hungarian budget plans for 2027 simultaneously promises tax reductions for lower-income individuals, higher public charges for the largest companies and certain sectors, as well as expanded investment and business development funding opportunities.
For businesses, the most important task in the coming months will be the continuous monitoring of the 2027 tax changes and the preliminary modelling of various scenarios. However, the specific financial and tax implications can only be reliably assessed once the detailed legislation has been published.
This summary is based on the measures publicly announced on 19 October 2026.
The tax changes outlined in the Hungarian budget plans for 2027 represent a significant shift in Hungarian tax policy and will directly affect both individuals and businesses. Monitoring the regulatory developments outlined above and preparing for the upcoming changes will be essential for company executives and decision-makers. To ensure compliance and identify opportunities, we recommend seeking expert advice. The tax consulting team of WTS Klient Hungary is ready to assist you.
This article is for general information purposes only and should not be considered as advice.
