Strengthening of transfer pricing audits

One of the most important areas of the 2026 tax inspection plan of the Hungarian tax authority is the review of pricing between related parties. Even compared to the already high number of inspections in 2025, a further increase is expected. The tax authority uses AI‑based analytical models and real‑time data processing to filter high‑risk companies, even as early as the moment an invoice is issued.

The audits will particularly target companies performing limited‑risk “routine” manufacturing, distribution or service activities, yet operating at a loss or with extremely low profitability.

Priority sectors of inspections in 2026:

• automotive industry
• construction industry
• chemical industry
• IT/software development

The Hungarian tax authority selects companies for audit based on sector‑specific risk analysis, so businesses operating in these sectors should review their transfer pricing documentation and applied pricing methods in time.

Key transfer pricing audit points:

• transactions involving intangible assets between related parties
• loans and other financial transactions
• transfer pricing data reporting
• compliance with the conditions of advance pricing agreements (APAs)

Targeted audits may also be launched based on country‑by‑country reports (CbCR), cross‑border structures, transfer pricing data reporting, and international data exchange.

Inspection of companies’ direct taxes

With regard to direct taxes of companies, the 2026 tax inspection plan of the Hungarian tax authority will prioritise the review of the following data:

• corporate tax incentives (e.g. development tax allowances, investments serving energy‑efficiency goals, etc.)
• development reserve allocated in 2024
• release of the tied-up reserve allocated in 2020
• covered taxes related to the global minimum tax (corporate tax, innovation contribution, income tax of energy suppliers)
• accounting treatment affecting after‑tax profit and tax liabilities
• loss carry forwards

Taxpayers expecting increased audits in the area of direct taxes:

• taxpayers engaged in event organisation, advertising, marketing, media services and film production
• taxpayers with connections to non‑cooperative jurisdictions and deriving profit from such countries
• newly established companiescompanies operating for years based on shareholder loans
• providers and users of registered seat services

Based on automatic international tax information exchange data, even non‑cooperative taxpayers with the largest tax discrepancies should expect compliance audits.

In addition, the Hungarian tax authority will continue to examine in 2026:

• fulfilment of tax obligations related to approved dividend payments
• companies with equity shortfalls due to long‑term losses
• taxpayers failing to file retail tax returns, including online platforms

International income of private individuals, social contribution tax allowances

The 2026 tax inspection plan of the Hungarian tax authority places even stronger emphasis on analysing financial account data obtained through international tax information exchange. As a baseline, supporting procedures or compliance inspections may be launched, while non‑cooperative taxpayers with significant discrepancies may face tax audits.

The Hungarian tax authority receives more information on foreign bank accounts, investments and other financial assets, enabling targeted audits of private individuals earning income from foreign sources.

Audits may also extend to capital market transactions and income from crypto asset transactions.

Based on previous audit experience, tax allowances relating to vocational education and dual training (claimed from the social contribution tax) will also be in the spotlight.

Audit of climate protection regulations

Owing to the EU’s green economy regulations, an increasing number of environmental requirements affect businesses. Accordingly, Hungarian customs audits will place greater focus on goods falling under the CBAM obligations.

Other high‑risk areas

According to the 2026 tax inspection plan of the Hungarian tax authority, the following high‑risk areas will remain in the focus of audits:

• automotive industry
• agriculture
• food industry
• construction industry
• service sector
• e‑commerce platforms
• businesses engaged in regular product imports

In 2026, the tax audits may also begin regarding the food chain inspection fee.

The customs inspection practices characteristic of previous years will continue. These typically include audits of customs value accuracy and supervision of the continuously growing e‑commerce traffic.

To combat VAT fraud, the 2026 tax inspection plan of the Hungarian tax authority will again focus on:

• companies carrying forward their VAT balances for multiple years
• businesses performing high‑risk activities
• taxpayers submitting “tax‑minimising” VAT returns

The tax authority will continue to closely monitor the consistency and discrepancies between VAT returns, recapitulative statements, online invoice data and online cash register information.

The tax authority will take an even stricter approach to undeclared (“black”) employment, which will lead to more frequent on‑site inspections. During these inspections, the tax authority will record findings using its digital procedural application (HEDI), making on‑site audits paperless and reducing administrative burden.

Although the goal of the Hungarian tax authority remains to assist compliant but occasionally mistaken businesses primarily through supporting or compliance procedures, the increasingly targeted and data‑driven audits planned for 2026 carry significant risk for anyone failing to meet statutory obligations. Businesses in Hungary should therefore review their internal processes now and, if needed, engage an expert to ensure that they face the 2026 tax inspections prepared, conscious and compliant. Whether during the audit or in subsequent legal remedy procedures, you can rely on the tax experts of WTS Klient Hungary.

This article provides general information and does not constitute advice.

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At first glance, international chain transactions may appear straightforward: the goods leave the seller and arrive at the customer. But what happens if the transport route does not follow the logic of the sales chain?

In this article, we present a chain transaction where – due to the place of supply being in Hungary – a third‑country company becomes subject to VAT registration in Hungary, even though the goods do not physically remain in Hungary. As a result, the foreign sale could easily (but sometimes incorrectly) be considered VAT‑exempt export.

Our specific example helps explain when and why VAT registration in case of chain transactions becomes necessary, and how non‑compliance with Hungarian VAT regulations can be avoided.

Why may VAT registration be required in general?

Similarly to EU‑established companies, third‑country (i.e. non‑EU) businesses may also be required to register for VAT in Hungary in certain situations. The most common cases include when the company:

• moves its own goods to Hungary,
• sells goods to Hungarian customers, or
• ships goods from a warehouse rented in Hungary.

However, since the obligation to register for VAT depends on an economic presence in Hungary and the existence of taxable transactions , there are situations where the sale does not take place in Hungary and the goods immediately leave the country, yet Hungarian VAT registration and ongoing VAT compliance obligations still arise. An international chain transaction is one such scenario.

Not only an obligation, but also an opportunity

Although failure to comply may result in tax penalties, late payment interest and other legal consequences, VAT registration is not only essential from a compliance perspective. A VAT‑registered entity is also entitled to deduct input VAT on its purchases, while registration ensures transparency of economic activity at the Hungarian tax authority.

Let us now examine VAT registration in case of a chain transaction through a concrete example.

Chain transaction involving a Hungarian seller and two third‑country partners

A non‑EU (third‑country) company (“Party B”) has products manufactured by its Hungarian business partner (“Party A”). Upon completion of production, the goods are not delivered to the ordering party but are shipped directly to the United States to the final customer (“Party C”), which is a US company, also established in a third country. It is important to note that the transport is organised and ordered by the final customer (“Party C”).

Since the essence of chain transactions is that the goods are transported from the first seller to the final customer in a single shipment, while ownership is transferred multiple times, the above arrangement qualifies as a chain transaction. Three parties (A ➝ B ➝ C) participate in consecutive supplies, while the goods are physically transported only once, directly from A to C.

Which supply qualifies as VAT‑exempt export?

Under Hungarian VAT rules – particularly Sections 26 and 89 of Act CXXVII of 2007 on Value Added Tax – only one supply in a chain transaction can be linked to the transport. This is the so‑called “moving supply”, which may qualify as VAT‑exempt export. The remaining supplies qualify as “non‑moving supplies” and are taxable in the relevant country.

The party organising the transport determines which supply in the chain qualifies as the moving supply. In the present case, the transport is attributable to Party C and to the supply where Party C acts as the purchaser. Accordingly:

• The VAT‑exempt export supply is the B ➝ C transaction, where a third‑country company sells the goods to the UScustomer.

• The A ➝ B supply is performed in Hungary and qualifies as a domestic taxable transaction, since the goods are dispatched from Hungary directly to the United States, but the transport (i.e. the VAT‑exempt export) is not attributable to this supply.

Consequence: obligation to register for VAT in Hungary

In the A ➝ B transaction, Company A must issue a VAT invoice for the sale of goods, applying Hungarian VAT at the standard rate (generally 27%). In other words, reverse charge does not apply, and normal VAT taxation is required. As a result, third‑country Company B makes a domestic taxable acquisition of goods in Hungary. Based on this, VAT registration in Hungary in case of the chain transaction becomes mandatory for Party B. This also means that, in addition to applying for a Hungarian VAT number, the company must appoint a fiscal representative.

Why is a fiscal representative required?

If a non‑EU company is required to register for VAT in Hungary, Hungarian legislation allows this exclusively through fiscal representation. The company must appoint a fiscal representative established in Hungary and holding the appropriate authorisation, who:

• represents the company before the Hungarian tax authority,
• submits the required VAT returns,
• shares joint and several liability for the tax obligations in Hungary, and
• ensures compliance with applicable legislation.

The fiscal representative bears responsibility for the fulfilment of tax obligations and represents the third‑country company in all Hungarian tax matters at the Hungarian tax authority. This regulatory framework serves the security and transparency of the Hungarian tax system and provides safeguards for the tax authority regarding compliance.

The fiscal representative not only provides technical assistance but also legal and tax security for the foreign company. Choosing the right representative is therefore not merely a compliance obligation, but also a strategic business decision.

As demonstrated in this article, in a chain transaction the party organising the transport plays a decisive role in determining which supply qualifies as export and which constitutes a taxable domestic supply. Precise knowledge of logistical details, particularly in international transactions, is therefore critical for effective tax planning. With decades of experience, the tax advisers of WTS Klient Hungary not only assist in identifying the parties involved even in complex chain transactions, but also provide reliable fiscal representation for third‑country companies and support VAT registration in case of chain transactions. Feel free to contact us with confidence.

This article is for general information purposes only and should not be considered as advice.

A VAT registration in case of chain transactions bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

• to reduce administrative burden,
• to clarify legal conditions, and
• to implement guidelines of international legal sources

in several tax types. In this article, we summarise the most important changes.

Value added tax

VAT groups

• Creation of VAT groups: The Hungarian 2025 autumn tax package would simplify the process of creating VAT groups. In the future, a statement by the member that its registration system is capable of clearly separating internal and external transactions would be sufficient, so it would no longer be necessary to demonstrate this.

• VAT group representative: In case of termination of a VAT group representative, if the group does not appoint and register a new representative within 15 days, the Hungarian tax authority would automatically appoint the member with the highest tax performance to this role. The group representative would cease to be such if the member in question were to be subject to liquidation or involuntary deregistration proceeding.

Data reporting obligation

Based on the proposal, it will be mandatory to indicate the actual amount of VAT to be deducted at the invoice level in the VAT return summary report, not just the tax base and the VAT transferred. This provision would apply to the main pages, the pages containing amendment and cancellation invoices, and the data reporting relating to advance invoices. The amendment would enter into force in July 2026.

VAT rate change

From 1 January 2026, the VAT rate payable on the sale of beef and related offal would be reduced from the current 27% to 5%.

Global minimum tax

• New definitions: In connection with the application of the transitional CbCR safe harbour rules, the definitions of simplified covered tax, recognised CbCR, qualified financial statements, and simplified effective tax rate would be introduced.

• Clarification of transitional tax rates: With regard to the transitional relief for substance based income exclusion, it would be clarified which transitional tax rate would have to be paid in which year.

Personal income tax

Mothers raising two or more children

The Hungarian 2025 autumn tax package would also simplify the tax advance declaration process in connection with the tax allowance for mothers raising two or more children.

• No separate declaration required: From 1 January 2026, mothers of three children could indicate on their family allowance declaration form if they wish to claim the allowance for mothers raising three children. Mothers of two children who gradually become eligible will also be able to take advantage of this option.

• Continuity: The mother concerned may also declare to her employer that her declaration should be considered a continuous tax advance declaration. This declaration would be valid until a new declaration is submitted.

• Tax exemption for mothers raising or having raised two children: This will be introduced gradually over four years, until 2029, depending on age.

Crypto transactions

In the case of crypto transactions, the time limit for tax equalisation would be eliminated. This means that not only losses from the previous two years, but also earlier losses not yet included in tax adjustments could be offset against trading profits in the current year. For the purposes of tax adjustment, records must be kept that clearly show the amount of losses not yet utilised in tax adjustments. This option would already be available in the 2025 personal income tax return, but it is a condition that losses older than two years must have been reported in previous years’ returns.

Compensation from credit institutions in the event of data theft

In the case of bank customers who have fallen victim to data theft, the amount reimbursed by the bank out of fairness would be considered tax-free income. The tax exemption applies to compensation not exceeding the amount of the loss; for amounts exceeding this, the general rules apply. This rule would take effect on the day following the adoption of the bill.

Social security and social contribution tax

From 1 January 2026, permanent contract work would be introduced. In this relationship, social security contributions and social contribution tax would have to be paid on the contractual fee, but at least 30% of the minimum wage. The principal may declare the permanent nature of the contract work, thereby ensuring the continuity of the insurance relationship until the end of the legal relationship and reducing subsequent administration.

Social security registration system

According to the Hungarian 2025 autumn tax package, the development of a complex IT system would help individuals access data related to health insurance benefits and pension contributions on a single platform, thereby facilitating administrative processes.

Accounting

The bill clarifies related parties‘ transactions with each other where they have agreed on the subsequent settlement of differences arising from market prices. The clarification would allow taxpayers to apply a market price determined within the market price range agreed upon by the parties, even if it differs from the median, in their accounting records, as opposed to the median tax base adjustment in the case of subsequent accounting price adjustments. According to the Hungarian 2025 autumn tax package, the amendment will apply to the 2026 financial year, but it will also be possible to opt for its application for 2025.

Corporate tax

Support for spectator team sports

The Hungarian 2025 autumn tax package clarifies the conditions for the disposal of tangible assets acquired from the support of spectator team sports, especially in the case of free transfer.

Tax relief for R&D activities

• Upper limit of tax allowances: According to the proposal, the legislator would set the maximum tax allowance for R&D projects carried out jointly with research institutes, higher education institutions, and the Hungarian Academy of Sciences at 10% of R&D costs, with an annual upper limit of HUF 500 million. The proposal is expected to enter into force on the day following its promulgation.

• Time limit: The time limit for choosing the R&D tax allowance will also change: taxpayers will now be able to change the method of claiming the tax allowance from the fifth year following the first tax year chosen, instead of the previous sixth year.

Small business tax

The Hungarian 2025 autumn tax package would remove electronic funds from the concept of cash from 1 January 2026, so they would not have to be taken into account when determining tax base adjustment items.

Duties

• Forgiving loan: Forgiving shareholder’s loan would become duty-free. An exception to this would be if the liquidation does not end with the deletion of the company from the company register. In the latter case, the duty amount must be paid with a late payment surcharge.

• Property rights related to home ownership: The duty assessment provisions relating to the acquisition of home ownership by private individuals would be extended to the acquisition of property rights related to home ownership.

• Leaseholder rights: From 1 January 2025, not only the fact of financial leasing can be indicated in the real estate register, but also the leaseholder’s right to transfer ownership. This option is currently provided for in the Hungarian Land Registry Act, but the Hungarian 2025 autumn tax package would transpose this change into the Hungarian law on duties as well.

Local taxes

• Lessee’s right: In addition to the duty law, from 1 January 2026, the law on local taxes would also include the lessee’s right and the right related to the retention of ownership in the definition of property rights.

• Municipal tax: Under the Hungarian 2025 autumn tax package, local governments would not be able to levy municipal tax on forests and related property rights.

Tax administration

The Hungarian 2025 autumn tax package would introduce automatic decision-making in tax matters, allowing the Hungarian tax authority to make decisions automatically if all the necessary data is available.

In this article, we have tried to provide a thorough summary of the most important parts of the draft Hungarian autumn tax package 2025 that affect companies’ decision makers. If you have any questions about the changes detailed here, please contact the tax consulting team of WTS Klient Hungary who are always at your disposal.

This article provides general information and does not constitute advice.

A The Hungarian autumn tax package 2025 bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

If your company is registered outside the European Union – such as in Asia, North America, or other non-EU countries – and you plan to sell goods, import products, or provide services in Hungary or to EU customers from Hungary, your first and most crucial step is to appoint a fiscal representative in Hungary.

Why is fiscal representation mandatory in Hungary?

Under Hungarian VAT law, fiscal representation is not only advisable but legally required for businesses without a permanent establishment or branch in Hungary that carry out VAT-liable activities within the country. Without a fiscal representative, your company cannot legally sell, import, or provide services in Hungary or from Hungary to other EU Member States.

How can WTS support you as your fiscal representative in Hungary?

WTS provides comprehensive fiscal representation in Hungary, ensuring full compliance with local VAT obligations on your behalf:

• VAT registration in Hungary
• ongoing tax advisory to ensure compliant and optimised operations
• preparation and submission of VAT returns
• management of tax payments
• direct communication with the Hungarian authorities
• full representation at the Hungarian authorities

Legal requirements for fiscal representatives from 2025

Did you know? Starting 1 January 2025, only companies meeting the following criteria are allowed to act as fiscal representatives in Hungary:

• must be incorporated as a private limited company (Kft.) or a public/private limited liability company (Zrt.)
• must have a minimum registered capital of HUF 150 million, or be able to provide an equivalent bank guarantee
• must not have any outstanding public debt registered with the Hungarian tax authority (NAV)

WTS FRS Ltd. (fiscalrep.hu) is an officially registered fiscal representative in Hungary. We support companies based in:

• Asia (including China and Japan)
• North America (especially the USA and Canada)
• non-EU countries in Europe, such as the United Kingdom, Switzerland, and Norway

Our services enable smooth and compliant business operations in Hungary for companies outside the EU.

With a strong international background and in-depth local expertise, WTS offers reliable fiscal representation tailored to the specific needs of third-country companies. We understand that fiscal representation is a matter of responsibility and trust, and our English-speaking tax advisers are happy to answer any questions you may have.

This article is for general information purposes only and should not be considered as advice.

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If your company purchased goods or used services in other EU countries in 2024 and local VAT was charged on those transactions, do not miss this deadline!

Who is eligible to reclaim 2024 foreign VAT?

Hungarian businesses may reclaim foreign VAT if:

• they are eligible to deduct VAT in Hungary (e.g. they are not qualifying as tax-exemption businesses),
• the foreign VAT was incurred in connection with the company’s taxable business activities, and
• they do not have a registered seat or a permanent establishment in the respective Member State through which they generate revenue. (In such cases, VAT should be settled via local VAT returns.)

How to submit the application?

The refund application must be submitted via the Hungarian tax authority’s ÁNYK (General Form Completion Program) using form ELEKAFA. The deadline for submitting the claim for 2024 foreign VAT is 30 September 2025.

Important: The deadline is peremptory. If missed, the tax authority will not accept any justification, and there will be no further opportunity to reclaim the 2024 foreign VAT. While recent decisions by the European Court of Justice have slightly relaxed the previously strict practice regarding the deadline for providing missing information, meeting the peremptory 30 September deadline remains crucial.

Common mistakes to avoid

• Ensure you are using the latest version of the ELEKAFA form. Outdated versions may result in your application being rejected by the Hungarian tax authority.
  
• Before submitting the ELEKAFA form, it is recommended to check the entire form using the green check mark in the upper right corner of the program (“Check all forms”) to filter out any errors or warnings related to the form. It is also strongly recommended that you check the warnings marked in yellow to ensure that the submitted form is accepted and forwarded to the tax authority of the Member State concerned. An example of such an error would be if the country code in the address is not written in two capital letters. For example, if you enter the country code “De” for an address in Germany, at first glance it will appear as “DE” on the form, but the system of the Hungarian tax authority may still indicate an error that could result in the application being rejected. The successful submission of your application is confirmed by the KKI receipt issued by the Hungarian tax authority.

Reclaiming the 2024 foreign VAT may seem straightforward, but the process is riddled with administrative pitfalls. Even minor errors can lead to rejection by the tax authority. Especially for larger amounts, it is highly recommended to seek professional assistance. As in previous years, the experienced tax advisers of WTS Klient Hungary are ready to support you with your 2024 foreign VAT refund.

This article provides general information and does not constitute advice.

A Deadline for reclaiming 2024 foreign VAT: 30 September bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

In what cases can companies decide to initiate a voluntary liquidation?

The voluntary liquidation procedure can be initiated for several reasons, provided that the company is not insolvent. Typically, changed market conditions, cost optimisation in the case of companies with an international background, or changes in legislation prompt owners to terminate their companies through voluntary liquidation.

Voluntary liquidation cannot be decided, and voluntary liquidation that has already begun cannot be completed if the court, prosecutor’s office, or investigating authority conducting criminal proceedings notifies the company or the commercial court that criminal proceedings may be brought against the company.

Voluntary liquidation in Hungary is one of the possible forms of termination without a legal successor, the accounting tasks of which are set out in Hungarian Government Decree 72/2006. (IV. 3.), but in matters not regulated by the government decree, the provisions of the Hungarian Act on Accounting shall continue to apply.

Planning the voluntary liquidation

During the voluntary liquidation procedure, the company will have several tax and accounting obligations that differ in terms of timing and content from those fulfilled during standard operations. It is advisable to consider these before deciding on voluntary liquidation and to plan the tasks and obligations to be performed.

8 aspects to consider before deciding on voluntary liquidation

1. One of the most important questions is whether the owner wishes to terminate the company through standard voluntary liquidation or so-called simplified voluntary liquidation. The latter option is available to companies that are not subject to an audit and can complete the voluntary liquidation within 150 days.

2. The resolution must specify the start date of the voluntary liquidation and, in the case of standard voluntary liquidation, the liquidator. From the start date of the voluntary liquidation, the managing director’s mandate ceases and from then on, the liquidator represents the company.

3. In the case of simplified voluntary liquidation, it is not necessary to appoint a liquidator, as the senior executive of the company performs this role.

4. It is advisable to set the start date of the voluntary liquidation as the first day of the financial year, so that the company does not have to prepare an additional accounting close due to the start of the voluntary liquidation, and the financial statements can be the financial statements ending the activity as well. If the start date of the voluntary liquidation is not the first day of the usual financial year, the financial year of the voluntary liquidation is 12 calendar months from the start date of the voluntary liquidation.

5. Simplified voluntary liquidation may involve less and faster administration and, in some cases, even lower costs, as it is not necessary to have a lawyer prepare the legal documents to be submitted to the Hungarian Court of Registration.

6. Before starting the voluntary liquidation procedure, it is advisable to review the company’s books in detail. The composition of assets and liabilities and the amount of outstanding receivables and liabilities must be examined. This is necessary because during voluntary liquidation, the company must settle all receivables and liabilities it has towards third parties.

7. During voluntary liquidation, it is advisable to submit a request for a reduction in tax advances payable to the Hungarian tax authority and local authorities if, based on calculations, the planned tax will be less than the tax advances payable. This will also reduce the amount of any subsequent overpayment.

8. If the voluntary liquidation is also subject to an audit obligation, it is advisable to consult with the auditor before starting the procedure in order to comply with the deadlines.

Stages of the voluntary liquidation procedure

1. Commencement of voluntary liquidation

Within 30 days of the start of the procedure, the company must prepare a final financial statement with the day preceding the start of the procedure as the balance sheet date, which must also be audited in the case of a company subject to audit. In addition, the preparation and approval of the resolution accepting the financial statement must also be planned within the 30-day deadline.

In addition to the financial statement, the liquidator is also responsible for preparing the final tax returns (VAT, corporate tax, contributions, and local business tax) and data reporting:

• notification to the local authority within 15 days of the start date of the voluntary liquidation,
• in the case of simplified voluntary liquidation, notification to the Hungarian tax authority using form T201T, which must also be completed within 15 days. (In the case of standard voluntary liquidation, lawyers fulfill this notification obligation to the Hungarian Court of Registration.)

2. Tasks to be performed during the voluntary liquidation period

Creditors may submit their lender demands within 40 days of the announcement of the commencement of voluntary liquidation, which the liquidator shall record in a register and forward to the Hungarian Court of Registration. If there is a discrepancy between the receivables reported and the values shown in the company’s books, the liquidator must prepare a corrected opening balance sheet for the voluntary liquidation as of the start date.

Tasks of the liquidator

• termination of the company’s activities
• collecting receivables
• satisfying creditor claims
• terminating existing contracts
• terminating employment contacts
• ensuring the preservation of tax and accounting documents and records for the period prescribed by law, including for the period following the voluntary liquidation
• selling assets, if necessary
• distribution of remaining assets among the owners

This period lasts from the start date of the voluntary liquidation until its completion, during which time the company must comply with the tax and contribution returns that are customary in the standard course of business.

3. Completion of the voluntary liquidation procedure

Standard voluntary liquidation may take up to three years. During this period, the company must complete standard year-end closings for each financial year. (In the case of simplified voluntary liquidation, this may take up to 150 days.) If standard voluntary liquidation is not completed within three years, involuntary deregistration will be conducted.

A decision by the owner is sufficient to complete the voluntary liquidation; no separate members’ resolution is required.

The company is subject to a reporting obligation also towards the local authority, which must be fulfilled within 15 days of the closing date of the voluntary liquidation.

Upon completion of the voluntary liquidation procedure, the liquidator is required to ensure that the following documents are prepared:

• final tax returns
• financial statement concluding the voluntary liquidation
• proposal for the distribution of remaining assets
• resolution of the members’ meeting

In the case of standard voluntary liquidation, the above documents must be submitted simultaneously within 60 days of the closing date of the voluntary liquidation.

Companies opting for simplified voluntary liquidation have a total of 150 days to complete the voluntary liquidation and submit the above documents, which must be prepared based on predefined document templates. These are available on the website of the Hungarian government website (available in Hungarian).

Tax authority must also be involved

In the case of simplified voluntary liquidation, an additional task is to provide the tax office with information on the closing date of the voluntary liquidation on the T201T form. If the simplified voluntary liquidation is completed with the decision to continue the company’s operations, this must also be reported on this form.

If the company is unable to complete the simplified voluntary liquidation within 150 days, it must switch to standard voluntary liquidation under the general rules.

During the voluntary liquidation procedure, it is important to complete all tax returns and data reporting by the deadline, as failure to do so may result in the Hungarian tax authority imposing a penalty on the liquidator.

After the above obligations have been fulfilled, the Hungarian tax authority has the option of initiating a retrospective tax audit. The company can only be dissolved if the tax authority issues a certificate to the Hungarian Court of Registration stating that it has no debts or open tax cases. The Hungarian tax authority has a maximum of 90 days to issue this certificate in the case of standard voluntary liquidation and 30 days in the case of simplified voluntary liquidation.

After the certificate has been issued, the company registry court will delete the company from the company register. After deregistration, the company’s bank accounts can be closed and, at the same time, the assets specified in the asset distribution proposal can be paid out to the owners.

Voluntary liquidation is the closure of a company’s activities without a legal successor, which involves complex accounting and tax tasks. The owners can choose between a standard or simplified procedure, taking into account obligations, deadlines and costs. The voluntary liquidation procedure requires planning, precision, and adherence to deadlines, so it is definitely worth involving an expert. The accounting professionals at WTS Klient Hungary are at your disposal!

This article provides general information and does not constitute advice.

A The voluntary liquidation procedure bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

In our previous newsletter (https://wtsklient.hu/en/2025/06/13/failed-data-reporting/), we highlighted that NAV is taking a stricter stance on failures to comply with online invoice reporting obligations, and that even minor administrative errors can now trigger sanctions. More recently, the authority has assumed a more proactive role in oversight, introducing targeted reconciliation procedures to identify inaccuracies.

What should companies pay attention to?

During these reconciliations, NAV primarily checks whether the data submitted by taxpayers matches the data recorded in its system. Affected businesses receive a notification if discrepancies are found in their reporting. Taxpayers then have 15 days from receipt of the notification to correct and clarify the relevant data. After the deadline, NAV will review the submitted corrections and notify the taxpayer of the final outcome of the reconciliation.

Reconciliation procedures are expected in the following areas:
• Discrepancies between reported and fulfilled invoice data
• Anomalies related to VAT deduction rights

What to do if your company receives a notification?

If NAV detects discrepancies, taxpayers may correct the data through self-revision or by amending the invoice reporting. It is crucial to act promptly, as failure to address discrepancies in a timely manner may result in serious consequences, including tax penalties.

It is important to note that participation in the reconciliation process is mandatory for taxpayers. Ignoring NAV’s notification or request may lead to a default penalty. The fine increases progressively: failure to meet the initial 15-day deadline can result in a HUF 300,000 fine. If the second 15-day deadline is also missed, the penalty increases by an additional HUF 100,000. Should the taxpayer fail to respond to the third request within the set deadline, the fine may reach as much as HUF 500,000.

In our article, we highlight the key aspects of the Hungarian Tax Authority’s increasingly intensive data reconciliation procedures. If you have any questions regarding the topics discussed, the experts of WTS Klient Hungary is always ready to assist you with professional support.

This article provides general information and does not constitute advice.

A Intensified Data Reconciliation Procedures by the Hungarian Tax Authority bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Corporate tax

• Preferential transfer of assets: The Hungarian summer tax package 2025 clarifies the conditions for tax deferral. If the shareholding requirement is only partially unmet, only the corresponding part of the previously deferred gain will become taxable, proportional to the transferred participation falling outside the affiliated group. The acquiring company must calculate the tax base differently in such cases.

• Corporate spin-off: This qualifies as a preferential transfer of assets for corporate tax purposes, thus allowing deferral and exemption from duties and excluding transfer pricing obligations.

• Reported shares: Following clarification, the participation exemption rules  will also apply to cross-border transformations occurring after the promulgation. If the taxpayer became a Hungarian tax resident due to a transformation completed in 2024, the benefit still applies provided all legal conditions (e.g., notification within 75 days) are met.

• IFRS-based taxation: The tax base calculation for corporate tax under IFRS is clarified. For derecognition of  own shares or participations (including in-kind contributions), the pre-tax profit must be adjusted for related profits or losses from the current and the previous tax years.

• R&D tax relief: The HUF 50 million limit on the tax base allowance for the direct costs of research and development activities carried out jointly with higher education institutions, the Hungarian Academy of Sciences and certain other research institutions is raised to HUF 150 million.

All corporate tax-related provisions of the Hungarian summer tax package 2025 take effect the day after promulgation.

Global minimum tax

• Notification of supplementary taxpayer status: The deadline is now the last day of the second month following the tax year-end (e.g. for the calendar year 2025: 28 February 2026).

• Default penalty: Violation of GloBE data reporting obligations may result in a fine of HUF 10 million by the Hungarian tax authority.

• Passive accrual: The anticipated supplementary tax for a financial year must be accounted for as a passive accrual, to comply with the matching principle. This rule already applies to reports for financial years starting in 2025.

Value added tax

• E-cash registers: Mandatory real-time receipt data reporting is postponed from 1 July 2025 to 1 September 2026. Voluntary use of e-cash registers is permitted from 1 July 2025, and related reporting obligations already apply from that date. The package also specifies technical and procedural requirements.

• Customs representative declaration: From 1 October 2025, customs representatives must declare the tax base and VAT amount in order to exercise the right to deduct VAT transferred to them.

• Travel services: From 1 January 2026, VAT base and tax amounts need not be indicated on invoices (unless the customer is a taxable person declaring non-travel organizer use). This does not apply to online reporting.

• Natural gas sales: From 1 January 2025, reverse charge VAT applies to gas sales between domestic taxable dealers. From 20 July 2025, buyers must declare their taxable dealer status. Both parties are subject to data reporting, including MWh volume.

• Online invoice data reporting: From 1 January 2026, successor-issued invoices must include the predecessor’s tax number. For VAT groups, both the group and the participating member’s tax numbers must be reported.

• Payment service provider reporting: The opening or closure of a payment account must be reported to the Hungarian tax authority within 7 days instead of 15.

• Chain transaction audits: From promulgation, the audit period is extended where multiple taxpayers must be audited to establish VAT liability (e.g. up to 365 days for reliable taxpayers).

Personal income tax

• Mothers’ allowance: The Hungarian summer tax package 2025 includes a number of technical changes related to the allowance for mothers of two and three children.These clarify the order of applying allowances, update prepayment declarations and regulate monthly tax return data. Infant care benefit (csed) and child care benefit (gyed) become tax-exempt with this new allowance.

• Expansion of tax-free benefits: From promulgation, tax exemption for employer-provided housing (e.g. service apartments, workers’ accommodation, dormitories) extends to foreign employees housed at Hungarian branches of foreign companies, provided legal conditions are met.

• Private use of electric bicycles: From 1 January 2026, tax exemption extends to electric bicycles up to 750 W (previously 300 W) when provided for private use by the employer.

Social contribution tax

From 1 January 2026, a new tax obligation arises for employers paying income to pensioners claiming PIT allowances for dependent children. The tax applies if total income exceeds four times the average annual wage and the payer would otherwise be required to withhold advance tax. Related entities are considered a single payer.

Tax procedure rules

• Binding tax rulings: From 1 August 2025, pre-consultations may be requested online for a HUF 1 million fee. Regular rulings cost HUF 10 million, urgent ones HUF 14 million, standard contract rulings HUF 12 million, and combined urgent/contract rulings HUF 16 million.

• Procedures to determine arm’s length prices: From the 31^st day after promulgation, fees increase to HUF 10 million (unilateral) and HUF 14 million (bilateral/multilateral). Pre-consultation costs rise to HUF 1 million per session.

• Branch registration: From promulgation, taxpayers must report the name and tax number of their Hungarian branches to the tax authority.

• Delisting from negative lists: Employers may apply once a year for removal from certain public negative lists of the Hungarian tax authority if no more than five employees were unreported and the related fine is paid in time.

• Automatic payment relief: Thresholds for eligibility increase for reliable taxpayers and both natural and legal persons, regardless of taxpayer classification.

Duties

From the 31^st day after promulgation, property value corresponding to a solar or wind power installation is exempt from transfer duty.

Special tax on credit institutions and financial enterprises

The special tax on credit institutions and financial enterprises continues in 2026. Tax is based on the 2024 pre-tax profit, adjusted as specified. Rates: 8% up to HUF 20 billion (7% in 2025), and 20% above (18% in 2025). The allowance for increasing the stock of government bonds is still available.

Income tax for energy suppliers

The income tax rate for energy suppliers is set at 41% in 2025 and 31% in 2026.

Additional insurance tax

The additional insurance tax liability will remain for the tax year starting in 2026, but the amount of the allowance will be increased from 30% to 60% of the increase in the nominal value of the government bonds portfolio.

Accounting

The entry into force of sustainability reporting obligations is postponed by two years.

In this article, we have tried to provide a thorough summary of the most important parts of the Hungarian summer tax package 2025 that affect companies’ decision makers. If you have any questions about the changes detailed here, please contact the tax consulting team of WTS Klient Hungary who are always at your disposal.

This article provides general information and does not constitute advice.

A Hungarian summer tax package 2025 adopted bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

The role of data accuracy and standardisation in successful reporting

NAV’s primary goal is to further improve the quality of online invoice data reporting. The stricter validations will help identify and filter out inaccurate, conflicting, or ambiguous data more effectively. This is in the interest of both the Hungarian tax authority and businesses. Inaccurate data reporting can result in serious risks, including data loss, incorrect VAT returns, penalties, or even audits.

21 WARNING messages will now cause failed data reporting

These 21 reclassified messages mean that any of them will block submission starting September, leading to a failed data reporting. The most common messages being reclassified include (with their respective codes from the NAV REST API specification):

• Tax number errors: when a VAT group member is reported instead of the group itself (codes: 82, 91)
• VAT status issues: incorrect markings like EUFADE, EUFAD37, KBAET, KBAUK (codes: 581–584)
• Exchange rate errors: mismatches between HUF and foreign currency, or extreme rates (codes: 1300–1310)
• Modification document errors: unrealistic or incorrect sequence numbers; original invoice already cancelled (codes: 560, 1140, 1150)
• Tax exemption and performance date inconsistencies (codes include: 591, 593, 596, 330)

New WARNING validation introduced

A new WARNING message will also be introduced to flag incorrect VAT status reporting. It triggers when customerVatStatus = OTHER but the communityVatNumber or thirdStateTaxId starts with “HU” and contains a valid Hungarian VAT number – or when customerTaxNumber/taxpayerId is a valid Hungarian VAT number.

In other words, the system will warn us when a transaction is reported as intra-community or third-country supply, but in fact a Hungarian Community VAT number is indicated for the buyer as a taxable person. Such a discrepancy may lead to more serious consequences later on; therefore, the purpose of the warning is to identify and flag it in time. Unlike the other VAT status issues and incorrect markings mentioned above, this new validation – issued as a WARNING message – doesn’t yet lead to a failed data reporting.

How to avoid failed data reporting for accountants, CFOs or executives

• Review past WARNING messages linked to your invoices.
• Identify which of these will become ERRORs from September.
• Update your processes and systems and perform test runs in the NAV environment.
• Double-check buyer VAT numbers, statuses, and currency exchange data.

What should developers do?

• Review the latest NAV REST API specifications.
• Update your invoicing system’s validation logic according to the new ERROR/WARNING rules.
• Run comprehensive tests in NAV’s sandbox environment.

The NAV’s message with the September 2025 update is clear: data quality is a top priority. While failed data reporting pose real operational and tax risks, the online invoice system has become a key platform for digital taxation in Hungary, not just a compliance tool. Those who adapt early will benefit from smoother cooperation with NAV, those who delay may face serious setbacks.

If you have questions about these changes, validation implementation, or error handling, feel free to contact us. The experts of WTS Klient Hungary are ready to support you.

This article provides general information and does not constitute advice.

A UPDATED: Failed data reporting in the Hungarian online invoice system bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Legal framework of simplified employment in Hungary

Simplified employment is one of the most popular atypical form of employment in Hungary primarily as a result of its streamlined administrative requirements and more favourable public levies.

Simplified employment in Hungary is basically regulated by two pieces of legislation: Act I of 2012 (Hungarian Labour Code) typically contains the most important labour law restrictions and specifies which basic labour law rules may be deviated from in the case of simplified employment and casual employment. Act LXXV of 2010 on Simplified Employment regulates administrative details.

Two forms of simplified employment are distinguished: seasonal work (agricultural or tourist seasonal work) and casual employment, including film extras.

Unchanged provisions: on casual employment

A casual employment arrangement may be entered into between the same parties for a maximum of five consecutive calendar days up to a total of 15 calendar days within a calendar month and not more than 90 calendar days within a calendar year.

A film extra continues to be defined as a natural person whose occupation is classified under FEOR code 3711, provided their role is auxiliary and exchangeable within the film production. The daily net income from this activity can not exceed 12% of the minimum wage valid on the first day of the month, rounded to HUF 100, i.e. HUF 34,900 as from 1 January 2025.

In the case of casual employment under a simplified employment relationship, the number of employees employed on a calendar day may not exceed:

• 1 person, where the employer has no full-time employees under the Hungarian Labour Code,
• 2 persons, where the employer employs between 1 and 5 employees,
• 4 persons, where the employer employs between 6 and 20 employees,
• 20% of the total workforce, where the employer employs more than 20 employees.

Unchanged reporting obligations and wage conditions

The simplified employment relationship is established by verbal agreement between the parties, upon notification by the employer. However, it is recommended that concluding a written contract by using a template available on the NAV website.

Based on the employment relationship established for simplified employment, the basic salary or performance-based wage shall be at least 85% of the statutory minimum wage, or 87% in the case of a guaranteed minimum wage, in accordance with the specified conditions. For film extras, the daily net wage can not exceed HUF 34,900 from 1 January 2025.

The simplified legal relationship has to be reported electronically, by telephone or via a mobile application prior to commencement of work. Notifications cannot be amended or withdrawn retrospectively. Amendments or withdrawals are permitted within two hours of submission, or until 9 a.m. on the day of notification if employment commences the following day or lasts more than one day.

Changes effective since February 1: public levies

From 1 February 2025, public levies payable by employers have changed. The new amount of the public levy calculation base had to be applied for the first time after 1 February 2025, i.e. for legal relationships established on or after 2 February 2025.

The new public tax payable for each calendar day of employment per employee is as follows:

• for seasonal work in agriculture and tourism, 0.75% of the minimum wage valid on the first day of the month, i.e. HUF 2,200
• for casual employment, 1.5% of the minimum wage valid on the first day of the month, i.e. HUF 4,400
• for casual employment as a film extra, 3% of the minimum wage valid on the first day of the month, i.e. HUF 8,700.

Forthcoming changes: new rules on time limits

Unlike casual employment, the time limit for seasonal and casual employment combined is a maximum of 120 days within a calendar year. This time limit has not changed from the previous one and will not change. However, from 1 July 2025, a significant change will come into effect regarding the calculation of the 120 days. While currently a worker cannot work under simplified employment scheme for more than 120 days in a calendar year for the same employer, from 1 July, this restriction will apply to all employers. This means that if someone works for several companies under simplified employment in Hungary, the total number of days spent in simplified employment at all his/her employers cannot exceed 120 days per year.

This restriction was supplemented by a legislative amendment promulgated on 24 April 2025. The amendment supports people working in agriculture by allowing them to extend the 120-day limit by an additional 90 days, subject to higher public levies. This amendment will take effect from 1 January 2026, and does not apply to 2025.

To monitor the time limit, the Hungarian tax authority will introduce an electronic query system enabling employers to verify an individual’s remaining simplified employment quota prior to engagement.

The new time limit rule represents a significant change, as until now the number of days of simplified employment was limited only on the employer’s side. The system, which will come into force on 1 July, will further restrict the possibility of simplified employment in Hungary: employers will have to take the time to check the employee’s quota, as the tax authority may reject the registration if it exceeds 120 days.

With decades of experience supporting clients across diverse sectors, the payroll experts at WTS Klient Hungary offer tailored advice to help employers comply with legal requirements and to optimise employment structures. Feel free to contact us!

This article provides general information and does not constitute advice.

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