Tuesday, 10 November 2026
Hungary is preparing changes to its corporate taxation system that would introduce a 15% tax rate for larger businesses while retaining the existing 9% rate for most companies. The proposals form part of an autumn tax package submitted to Parliament on 27 October 2026, with the majority of measures intended to take effect from 1 January 2027.
Under the proposed legislation, the higher rate would apply to companies or corporate groups with annual revenue of at least €500 million in the second preceding tax year. Eligibility would generally be determined using consolidated financial statements, meaning that smaller subsidiaries could also fall within the higher tax bracket if they belong to a qualifying group. The bill would allow certain smaller businesses to opt into the new regime.
Companies subject to the 15% rate would also face different rules for calculating taxable profits. Several deductions and tax allowances would be restricted, while dividend exemptions would generally require a minimum 10% ownership interest or a holding period of at least twelve months. A deduction linked to local business tax would provide some relief, subject to limits.
The proposed changes could affect international property investors, developers and asset owners operating through Hungarian subsidiaries. Where a property company belongs to a group exceeding the revenue threshold, its tax treatment may change even if its own turnover is considerably smaller. The financial implications would depend on group structure, taxable income, available allowances and the final legislation.
The package would also revise the taxation of corporate shareholdings. Capital gains on qualifying interests of at least 10%, held for a minimum of one year, would become exempt without the existing advance notification requirement. Corresponding losses would generally cease to be deductible. These provisions could influence the tax treatment of corporate acquisitions and disposals, including transactions involving property-owning companies.
Research and development incentives would be expanded, with the proposed tax credit increasing from 10% to 20% of eligible expenditure. Additional deductions would apply to qualifying research personnel costs and related asset depreciation. However, larger businesses seeking development-related tax allowances for investments beginning in 2027 would face additional requirements concerning annual research expenditure.
Other measures include an increase in the innovation contribution from 0.3% to 0.5% and a rise in one of the lower retail tax bands from 0.15% to 0.45%. The government also proposes maintaining the banking sector’s additional profits tax and the insurance surtax during 2027, alongside amendments affecting energy suppliers and financial transactions.
For Hungary’s commercial property market, the proposed reforms could alter the tax position of larger investment groups, retail operators and energy businesses. Changes to corporate taxation and available deductions may affect investment calculations, although the extent will vary between companies. The legislation remains subject to parliamentary approval and possible amendments before its intended introduction in January 2027.
Source: CMS
