Hungary Corporate Tax 2027: New 15% Tax Proposed for Large Companies

Major Hungary corporate tax 2027 changes have been proposed that could significantly increase the tax burden of large companies and multinational groups operating in Hungary.

Hungary currently applies a general 9% corporate income tax (CIT) rate. From 1 January 2027, however, a new legislative proposal would introduce a separate 15% corporate income tax regime for qualifying large companies.

The proposed reform goes considerably further than simply increasing the corporate tax rate from 9% to 15%. It would introduce special rules for determining the corporate income tax base, a partial credit for Hungarian Local Business Tax (HIPA), new limitations affecting tax incentives, and significant changes to the treatment of dividends, participations and corporate tax groups (Hungary corporate tax 2027).

The proposal is still subject to the legislative process. The rules described below therefore reflect the legislative proposal available in November 2026 and should not yet be regarded as final legislation.

Who would be subject to the 15% Hungary corporate tax rate in 2027?

The proposal introduces a new concept of a “large company” specifically for corporate income tax purposes.

Broadly, a company would qualify as a large company if:

1. it is included in consolidated financial statements and the annual revenue reported in the consolidated financial statements of the ultimate parent entity reaches EUR 500 million; or
2. it is not included in consolidated financial statements and its annual revenue according to its individual financial statements reaches EUR 500 million.

The test would generally be based on the revenue for the second tax year preceding the relevant tax year.

This is particularly important for multinational groups.

A Hungarian subsidiary would not itself need to generate EUR 500 million of revenue to fall within the new corporate tax regime. A relatively small Hungarian subsidiary could therefore become subject to the new rules because the consolidated revenue of its wider group meets the EUR 500 million threshold (Hungary corporate tax 2027).

The proposed definition should also not be confused with the existing concept of a “large enterprise” under the SME rules. These are separate concepts serving different purposes.

Companies that do not meet the EUR 500 million threshold would also have the possibility, subject to the statutory conditions, to elect to apply the large-company regime.

Hungary corporate tax 2027: 15% rate instead of 9%

Under the proposal, qualifying large companies would become subject to a 15% corporate income tax rate, while other corporate taxpayers would continue to be subject to Hungary’s general 9% CIT rate.

Importantly, this would not operate as a progressive corporate tax system.

The 15% rate would apply to the large company’s positive corporate income tax base as a whole. The EUR 500 million revenue threshold determines whether a taxpayer falls within the new regime; it is not an income or tax bracket above which the higher rate applies (Hungary corporate tax 2027).

Local Business Tax credit could reduce the effective CIT liability

One of the most important features of the proposed Hungary corporate tax regime for 2027 is the interaction between corporate income tax and Hungarian Local Business Tax (HIPA).

A qualifying large company could reduce its corporate income tax liability by 85% of the Local Business Tax accounted for as an expense, subject to a cap of 25% of the corporate income tax liability calculated before this reduction (Hungary corporate tax 2027).

In simplified terms: Corporate income tax payable = 15% of the CIT base – available HIPA credit

Consequently, the proposed 15% headline rate does not necessarily translate into a 15% effective corporate income tax burden.

For example, if a company has a corporate income tax base of HUF 10 billion, its preliminary corporate income tax liability at 15% would be HUF 1.5 billion.

The maximum HIPA credit under the 25% limitation would be HUF 375 million. If the company has sufficient qualifying HIPA, its CIT liability could therefore be reduced to HUF 1.125 billion before considering other relevant items (Hungary corporate tax 2027).

This represents 11.25% of the CIT base in this simplified example.

Companies should therefore model the proposed rules using their actual CIT base and HIPA position rather than simply applying a 15% rate to their existing tax calculations.

A separate corporate tax base for large companies

The proposed changes are considerably more significant than the introduction of a higher headline tax rate.

A new chapter of the Hungarian Corporate Income Tax Act would introduce special tax base rules specifically for large companies.

According to the explanatory reasoning accompanying the proposal, one of the objectives is to bring the large-company corporate tax base closer to the tax base applied under the global minimum tax (Pillar Two) framework (Hungary corporate tax 2027).

Companies potentially falling within the new regime should therefore not model the 2027 impact merely by replacing the current 9% corporate tax rate with 15%.

Both the applicable tax base and the availability of certain tax benefits could change.

New corporate tax rules for dividend income

The proposal would significantly change the corporate income tax treatment of dividends for large companies.

Under the proposed rules, received dividends could generally reduce the pre-tax profit of a large company where either:

1. the company holds at least a 10% ownership interest in the distributing entity at the time of the distribution; or
2. where the ownership interest is below 10%, the interest has been held continuously for at least 12 months.

This represents an important change compared with the broad dividend exemption available under the current Hungarian corporate income tax framework (Hungary corporate tax 2027).

For example:

• a dividend received in respect of a 15% participation could satisfy the ownership condition;
• a dividend from a 5% participation held for more than 12 months could satisfy the holding-period condition;
• a dividend from a 5% participation acquired only six months earlier could fall outside the proposed exemption.

This could make the new rules particularly relevant for Hungarian companies holding minority or portfolio investments.

Special rule for interests in investment entities

The proposal contains a further restriction for ownership interests in investment entities.

Where the ownership interest is an interest in an investment entity, the dividend reduction would not be available if the taxpayer applies the taxable distribution method to that interest.

The taxable distribution method is a concept originating from the global minimum tax rules and provides a specific approach to the treatment of investments in investment entities.

The provision should therefore not be interpreted as meaning that distributions from investment funds or other investment entities would automatically become taxable.

Its application depends on both the nature of the relevant ownership interest and the global minimum tax treatment applied to that interest.

This is another example of the increasing interaction between the proposed Hungarian large-company corporate tax regime and concepts used under Pillar Two (Hungary corporate tax 2027).

New limitations on corporate tax incentives

Another important element of the Hungary corporate tax changes proposed for 2027 is a new limitation affecting certain tax-base reductions and corporate income tax incentives available to large companies.

In broad terms, the tax effect of specified tax-base reductions and certain corporate tax allowances would be subject to a substance-based ceiling linked to payroll costs, depreciation and the book value of relevant tangible assets (Hungary corporate tax 2027).

This could be particularly relevant for multinational groups currently relying on significant Hungarian corporate tax incentives.

Existing incentive structures should therefore be modelled under the proposed rules rather than assuming that an otherwise available corporate tax incentive will continue to produce the same effective tax benefit after 2027.

Significant implications for Hungarian corporate tax groups

The proposal could have particularly significant consequences for Hungarian corporate tax groups.

If at least one member of a corporate tax group qualifies as a large company, the proposal would extend important elements of the large-company regime to the group.

In particular, the relevant individual tax bases would be determined under the large-company rules and the corporate tax group’s liability would be calculated using the 15% tax rate (Hungary corporate tax 2027).

This means that one qualifying company could potentially affect the corporate tax position of other Hungarian group members that would not independently meet the EUR 500 million revenue threshold.

The proposal would also amend the eligibility requirements for corporate tax groups, increasing the importance of consolidated financial reporting when determining whether companies may form a tax group (Hungary corporate tax 2027).

Existing Hungarian corporate tax groups should therefore review the potential consequences of the proposed rules before 2027.

Changes to the Hungarian participation exemption

The proposal would also make an important structural change to Hungary’s participation exemption regime.

The existing reported participation (“bejelentett részesedés”) regime would be replaced by a new concept of a qualifying participation (“kiemelt részesedés”).

Under the proposed system, the existing notification-based approach would be replaced by a regime broadly based on:

• a minimum 10% participation; and
• a minimum one-year holding period for the exemption of qualifying gains.

The proposed change could reduce the administrative significance of the existing notification procedure, while making the size and duration of the investment more important for determining whether a disposal qualifies for the exemption.

Specific transitional provisions would apply to certain participations previously reported under the existing system.

Research and development incentives

The proposed Hungary corporate tax changes for 2027 also include substantial amendments affecting research and development.

Among other measures, the corporate income tax credit for eligible R&D activities would increase from 10% to 20%.

At the same time, changes would be introduced to qualifying R&D expenditure and the treatment of acquired R&D services.

Large investments benefiting from development tax allowances would also become subject to revised conditions, including increased investment thresholds and additional requirements in certain cases.

Groups with significant Hungarian R&D operations should therefore consider the potentially more generous headline R&D incentive together with the restrictions introduced elsewhere in the proposed large-company regime (Hungary corporate tax 2027).

Innovation contribution expected to increase to 0.5%

The proposal would also increase the Hungarian innovation contribution from 0.3% to 0.5% from 2027.

Although the innovation contribution is legally separate from corporate income tax, this change should be included when modelling the total Hungarian tax burden of affected companies.

For businesses subject to both the proposed large-company corporate income tax regime and the innovation contribution, looking exclusively at the 15% headline CIT rate could therefore provide an incomplete picture of the overall tax impact (Hungary corporate tax 2027).

How does the new Hungary corporate tax regime relate to Pillar Two?

The proposed large-company tax regime should not be confused with Hungary’s implementation of the OECD/G20 Pillar Two global minimum tax (Hungary corporate tax 2027).

There are clear conceptual links between the two regimes. The explanatory reasoning to the proposal expressly refers to bringing elements of the large-company tax base closer to the global minimum tax framework, and certain concepts used in the proposed legislation also originate from the global minimum tax rules.

Nevertheless, the proposed 15% large-company corporate income tax would remain a separate domestic Hungarian corporate income tax regime with its own scope, thresholds and tax base rules.

Groups already subject to Pillar Two would therefore need to consider how the two systems interact rather than viewing the proposed Hungarian large-company regime simply as another implementation of the global minimum tax (Hungary corporate tax 2027).

What should multinational groups prepare for?

Although the proposed Hungary corporate tax rules for 2027 are not yet final legislation, multinational groups with Hungarian entities can already start identifying potentially affected companies.

Key areas to review include:

1. whether consolidated revenue could bring Hungarian entities within the EUR 500 million threshold;
2. the combined impact of the proposed 15% CIT rate and HIPA credit;
3. differences between the current corporate income tax base and the proposed large-company tax base;
4. the treatment of dividends and portfolio participations;
5. the availability and potential limitation of existing corporate tax incentives;
6. the impact on existing Hungarian corporate tax groups;
7. the interaction between the new regime and Pillar Two; and
8. the impact of other proposed 2027 tax changes, including the increased innovation contribution.

For calendar-year taxpayers, application of the EUR 500 million revenue test for 2027 would generally involve looking at the relevant 2025 revenue data. This means that groups can already perform an initial assessment of whether their Hungarian entities could fall within the proposed regime (Hungary corporate tax 2027).

Conclusion: a fundamental change to Hungary corporate tax from 2027

The proposed Hungary corporate tax 2027 reform represents much more than an increase in the corporate income tax rate from 9% to 15% for certain taxpayers.

If enacted in its proposed form, it would create a separate corporate income tax framework for large companies, combining a higher headline rate with new tax-base rules, a Local Business Tax credit, restrictions on certain corporate tax benefits and significant changes affecting dividends, participations and corporate tax groups (Hungary corporate tax 2027).

Importantly, the practical impact would not be limited to Hungarian companies that themselves generate EUR 500 million of revenue (Hungary corporate tax 2027).

Hungarian subsidiaries with substantially lower standalone revenues could also fall within the new regime where they form part of a multinational group meeting the consolidated revenue threshold.

For multinational businesses operating in Hungary, the key question is therefore not simply whether Hungary’s corporate tax rate will increase to 15%, but whether their Hungarian entities fall within the new regime and how the new tax-base and incentive rules would affect their effective tax burden (Hungary corporate tax 2027).

Important: this article is based on the legislative proposal available as of 3 November 2026. The proposal may be amended during the legislative process. This article provides general information only and does not constitute tax or legal advice (Hungary corporate tax 2027).