Economy 12 September 2025, 12:00pm

Here is the list of new tax breaks the Hungarian government is preparing

Portfolio

In a statement, Hungary's Economy Ministry has announced on Friday that it had received tax reform proposals from the Permanent Consultation Forum between the Competitive Sector and the Government (VKF), and from the Hungarian Chamber of Commerce and Industry (HCCI or MKIK), and was reviewing them. While the 1 percentage point reduction in social contribution tax (szocho) is expected to be the most important topic of debate, the issues of VAT exemption, flat-rate tax, the 'szocho' base and KIVA (small enterprises' tax) value limits may also be discussed.

GettyImages-118443574-duna-építészet-európa-fény-Magyarország-turizmus-világörökség

The Economy Ministry has announced that the government is reviewing tax law proposals submitted by the VKF, and the HCCI, for next year.

As previously reported, the proposals include a further reduction of 1 percentage point in social contribution tax (szocho).

This would provide businesses with an annual tax relief of around HUF 200 billion.

In addition to reducing the social contribution tax, organisations representing entrepreneurs have made several smaller tax proposals aimed at easing the financial burden on individuals and small businesses.

One such proposal is a multi-stage increase in the VAT exemption threshold. This would see the threshold rise to HUF 20 million in 2026, to HUF 22 million in 2027, and finally to HUF 24 million in 2028. This would affect around 150,000 businesses.

In the case of flat-rate taxpayers, the Chamber proposed increasing the cost ratio from 40% to 50%. Another proposal was to abolish the 112.5% multiplier applied to the social contribution tax base, which would be set at 100% in future, in line with the social security fund. This would result in an approximate relief of HUF 10 billion for the 140,000 affected sole traders.

Finally, the plans of representative organisations also include doubling the KIVA (small enterprises' tax) value limit, which would expand the circle of those eligible for the tax by 3,000–5,000 businesses from 2026.

We previously wrote about the details of the planned tax cuts here:

Existing taxes and stuff...

Tax reduction plans - particulary when the governing party is gearing up for its toughest election challenge yet - are dandy, but let's not forget how Viktor Orbán's Fidesz party changed the scenery in the colourful field of taxation over the years.

2025 kicked off with 54 taxes in place, which might cause of a few jaws to drop, but it's actually an improvement on the record of 61 taxes in 2024.

We could also mention the world's highest VAT rate of 27%, which was raised by Fidesz from 25% in 2012; the financial transaction tax (FTT); the increase in the simplified entrepreneurial tax (EVA) to 37% from 30% in 2012; the abolishment of the itemised tax (KATA) for many small taxpayers in 2022; the annual HUF 5,000 membership fee payable to the HCCI; and the multitude of special taxes, price caps, margin caps, interest rate caps and fee caps, the costs of which are all borne by the private sector. There are also subsidised lending schemes financed from the budget, i.e. taxpayer money.