Hungary’s government has submitted legislation that would increase the corporate income tax rate from 9% to 15% for companies and corporate groups with annual revenue of at least €500 million from January 1, 2027.
Businesses below the threshold would retain the 9% rate, while a broader tax package would also increase innovation contributions, change retail and insurance taxation, and revise research and development incentives.
The legislation was submitted to parliament on October 27 as part of the government’s 2027 fiscal reforms. The proposed changes would introduce a separate tax regime for large companies rather than a progressive corporate tax structure.
According to Hungarian tax publication Adó Online, the €500 million threshold would be assessed using a company’s individual or consolidated revenue from the second tax year preceding the relevant tax year. For companies with calendar-year financial reporting, the 2027 assessment would therefore generally refer to 2025 revenue.
Corporate tax and innovation contribution changes target large businesses
The corporate tax increase represents a six-percentage-point rise for affected companies, although the final impact would depend on the tax base and applicable deductions.
The government also proposes a separate method for calculating the taxable base of large companies, drawing on elements of the global minimum tax framework while seeking to reduce administrative complexity.
Hungary’s innovation contribution would increase from 0.3% to 0.5% from January 2027, without changing the underlying contribution base. Micro and small enterprises would remain exempt under the existing framework.
The government expects changes to corporate income tax and innovation contributions to generate approximately HUF 240 billion in additional budget revenue, according to Finance Minister András Kármán’s statements reported by Hungarian media.
Research incentives revised and sports tax relief withdrawn
The bill would restrict deductions for externally purchased research and development services to those obtained from qualifying research institutions, universities and micro, small or medium-sized enterprises.
It would also increase certain tax-base deductions related to research personnel and equipment depreciation, while imposing additional conditions on large companies seeking R&D preferences.
Corporate tax relief linked to financing professional spectator team sports would be abolished, with the government proposing a different sports funding framework and incentives for amateur sport.
Retail tax rises while banking windfall levy remains
The proposed legislation would retain Hungary’s sector-specific retail tax while increasing the rate on the HUF 1 billion–50 billion tax-base bracket from 0.15% to 0.45%. The existing exemption for the first HUF 1 billion of the tax base would remain, while the rates applicable to fuel retailing would be unchanged.
The windfall profit tax on banks and financial companies would also continue in 2027 at unchanged rates, using 2025 pre-tax profits as its reference base. Deductions linked to increases in holdings of Hungarian government securities would remain available.
For insurers, the standard insurance tax would move away from progressive brackets towards uniform rates within individual insurance categories. The separate supplementary insurance tax would retain its existing bracket structure.
Financial transaction duty exemption threshold triples
The government proposes increasing the exemption threshold for qualifying retail and postal financial transactions from HUF 50,000 to HUF 150,000. At the same time, the maximum financial transaction duty on an individual transaction would increase from HUF 20,000 to HUF 30,000.
The wider fiscal package also includes the return of advertising tax from January 2027, with the first HUF 500 million in annual advertising revenue exempt and progressive rates of 2.5%, 4.5% and 7.5% applying above that threshold.
