More About Taxes

Acquisition Duty
The acquisition of real estate or equity shares is subject to an acquisition duty, based on the market value determined by the tax authority. The duty rate is 4% on the first HUF 1 billion per property, with 2% applied to the remaining amount. The maximum duty payable per property is capped at HUF 200 million.

Local Business Tax
The tax base for local business activities is the net revenue, which can be reduced by the cost of goods sold, intermediary services, subcontractor fees, material costs, and direct research and development costs.
The tax on temporary activities is capped at HUF 5,000 per calendar day. The local
municipality determines the introduction of the tax and any available discounts.

Building Tax
All residential and non-residential buildings within the municipality's jurisdiction are subject to building tax. The tax obligation applies to all premises within the building, regardless of their purpose or usage. The taxpayer is the owner of the property as of January 1. If there are multiple owners, the tax is paid proportionately to their ownership shares.
The building tax is calculated based on the usable floor area (maximum HUF 1,100/m²/year) or the adjusted market value (up to 3.6% of the property’s adjusted market value), depending on the municipality’s decision.

Land Tax 
As of January 1, landowners are required to pay land tax. The tax is calculated based on the land area (maximum HUF 200/m²/year, reduced by the area occupied by buildings) or the adjusted market value of the land (up to 3%), depending on the municipality’s decision.
Since municipal decisions influence both building tax and land tax rates, it is advisable to gather information on the specific method used by the relevant municipality.

Tax Base Reductions for Companies
Investment Allowance for Small and Medium Enterprises (SMEs)
This allowance is available to SMEs whose members are all private individuals as of the last day of the tax year. It enables businesses to reduce their pre-tax profit by investing in new, unused assets. The allowance cannot exceed the pre-tax profit.

Development Reserve
Businesses can create a development reserve, which reduces the tax base under the Corporate Tax Act. The maximum reserve is 50% of the annual pre-tax profit, up to HUF 10 billion. The reserved amount must be used for capital investments within four years. From 2021, the HUF 10 billion upper limit for development reserves has been removed, allowing for greater corporate tax advantages.

Investment Allowance for Monument Properties
For cultural heritage preservation projects involving the renovation of monument properties or properties under individual local protection, twice the renovation costs can be deducted from the tax base. Affiliated companies can also use this allowance. The maximum tax deduction is capped at EUR 100 million.

Tax Allowance for Energy Efficiency Investments
Taxpayers are entitled to a tax allowance for energy efficiency investments, amounting to 30-65% of the accounted costs, up to EUR 15 million. The allowance can be applied in the tax year following the investment's commissioning or in the tax year of commissioning and is available for the following five years.

Development Tax Credit
Taxpayers are eligible for a development tax credit if they:

1. Undertake an investment of at least HUF 3 billion, or
2. Undertake an investment of at least HUF 1 billion in a preferential area, or
3. Undertake an investment of at least HUF 100 million in a facility used for the
production of animal-based food, or
4. Undertake an investment of at least HUF 100 million related to environmental
protection, or
5. Undertake an investment of at least HUF 100 million in research and development
(R&D), or
6. Undertake an investment related to film and video production, or
7. Undertake job-creation-related investments, or
8. Undertake an investment of at least HUF 100 million within three years of entering the stock market, or
9. Undertake an investment of at least HUF 100 million in a free enterprise zone or a
strategic investment related to the transition to a zero-net-emission economy.
To claim the development tax credit, a request must be submitted to the Minister
responsible for tax policy. The credit can be used over 13 tax years, but no later than
the 16th year following the application submission.