Tax Law Amendments 2026 – Summer Omnibus Act
On 28 July 2026, the Government adopted Bill T/387, which contained a small number of but significant amendments to the tax laws. The adopted text was published as Act XXXV of 2026 in Magyar Közlöny 102. számában on 30 July.
This article covers the followings:
Hungarian Trust - end of tax exemption?
Corporate Income Tax - abolished tax allowances
Terminated taxes
Local Business Tax
1. Introduction: Why was the Act necessary?
Act XXXV of 2026 is one of the most comprehensive tax amendment packages in recent years, adopted by Parliament to fulfil commitments related to the implementation of the Recovery and Resilience Facility (RRF). According to the explanatory memorandum, the European Union had previously blocked the disbursement of RRF funds to Hungary, but the political agreement concluded on 29 May 2026 opened the way for the release of these funds.
Access to the funds required the implementation of several tax reforms, including:
the abolition of tax exemptions related to trust‑based asset management (so called Hungarian Trust)
the narrowing of corporate tax incentives,
the harmonisation of retail tax competition conditions,
the reduction of the number of tax types.
The Act therefore has a dual purpose: (1) ensuring access to EU funds, and (2) simplifying and modernising the Hungarian tax system.
2. Amendments to Personal Income Tax (PIT)
The first chapter of the Act amends Act CXVII of 1995 on Personal Income Tax. The most important changes are as follows:
2.1. Introduction of new definitions
The legislation introduces two new definitions:
Settlor: a person who transfers an asset into trust‑based asset management.
Crypto‑asset: a digital value or right that can be transferred and stored using distributed ledger technology.
This amendment aims to standardise the tax treatment of crypto‑assets.
2.2. Reform of the tax rules for trust‑based asset management
One of the most significant elements of the Act is the substantial narrowing of tax exemptions related to assets transferred into trust‑based asset management. The purpose of the amendment is to meet EU expectations, as the previous regulation made these structures suitable for extreme tax optimisation beyond their original purpose.
Instead of preserving family wealth and preventing fragmentation during inheritance, the tax‑free asset value increase after five years had become the main motivation for using such structures—contrary to the ideology and purpose of trusts originating from Anglo‑Saxon legal culture.
The key changes are:
the tax exemption related to asset transfer into trust is abolished,
the taxation of asset distribution is restructured,
the determination of the beneficiary’s acquisition value becomes more precise.
3. Amendments to Corporate Tax (CIT)
The second chapter amends Act LXXXI of 1996 on Corporate Tax and Dividend Tax. The aim is to simplify the incentive system and increase revenues.
Narrowing of tax incentives
According to the governmental justification, the proliferation of tax incentives distorted competition and reduced budget revenues.
The tax base allowance for donations to public‑interest asset‑management foundations performing public duties will be abolished as of 1 August 2027.
Regarding the phasing out of heritage protection tax incentives from 1 January 2027, a transitional rule states that the tax base may be reduced under these titles for the last time in the 2026 tax year, provided the eligibility criteria are met. Consequently, unused incentive balances cannot be carried forward to tax years following 2026.
For growth tax credit obligations arising before 2027 and not yet closed, tax returns, payments, and related obligations (e.g., late payment interest, investment incentive conditions) must be fulfilled under the rules in force on 31 December 2026. Thus, taxpayers who previously opted for the growth tax credit will continue to pay the affected tax amount in a non‑standard schedule after 2026. Investment incentives cannot be applied to instalments due after December 2026, meaning that from 2027, instalments payable under the growth tax credit cannot be reduced by investment incentives.
4. Amendments to Value Added Tax (VAT)
The third chapter amends the VAT Act. The changes aim to simplify the regulation and reduce administrative burdens.
The amendments affect:
the rules on invoice data reporting,
the applicability of various special taxation schemes,
the clarification of certain exemption categories.
5. Abolished Taxes
To simplify the tax system—particularly in light of commitments under the 2021–2026 RRF—the following taxes and payment obligations are abolished:
animal control contribution,
immigration special tax,
municipal tax.
6. Environmental Load Charge
The amendment aims to strengthen the “polluter pays” principle. The rates of the air pollution charge have long remained unchanged. With the modification, the unit charges payable for emissions of:
sulphur dioxide,
nitrogen oxides,
non‑toxic solid substances
will double.
7. Strategic Significance of the Act
The amendment to the local tax law aims to simplify the rules on local business tax advance payments in connection with the special corporate division introduced on 1 January 2024, known as demerger.
As a result of the change, in the year of demerger, the predecessor entity may fulfil the successor’s reporting obligation and declare the expected amount of local business tax. Based on this declaration—which qualifies as a tax return—the municipal tax authority will:
adjust the predecessor’s second instalment of the advance payment for the period beginning in the previous year to 50% of the declared annual tax, and
prescribe 50% of the declared annual tax as the advance payment instalments for the period beginning in the current year,
and modify already prescribed instalments accordingly.
Summary
Overall, the amendments introduce two major changes:
Several tax types have been abolished, and numerous corporate tax incentives have been phased out.
Tax exemptions related to trust‑based asset management (Hungarian Trust) have been significantly restricted.
Connected link:
you can find the Hungarian Gazette here: Magyar Közlöny
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