Developments in tax and other obligations following the termination of the state of emergency

In order to mitigate and manage the effects in Hungary of the coronavirus pandemic that began in 2020, as well as the armed conflict that broke out in Ukraine in 2022, a number of state‑of‑emergency decrees affecting taxation have been adopted in recent years.

Pursuant to Government Decree No. 424/2022, the currently existing state of emergency — together with several decrees in force during the state of emergency — would, under the current regulatory framework, cease to be effective upon the termination of the state of emergency, i.e. on 14 May 2026.

Given the large number of affected decrees, the potential lapse of the state of emergency — and, at the same time, the lapse of decrees applicable during the state of emergency without transitional provisions — may pose challenges for taxpayers. At the same time, based on a proposal included on the agenda of the inaugural session of Parliament, the possibility has arisen that the state‑of‑emergency decrees may be elevated to statutory level.

In this context, we have summarized below the most important changes affecting taxation and other payment and pricing obligations to which companies should pay particular attention in connection with the phase‑out of the state of emergency.

The following summary has been prepared on the basis of the rules currently in force. In the table, we have grouped the measures introduced by the individual decrees by tax type and topic, their period of applicability, and their currently presumed legal status following the termination of the state of emergency. In addition, we briefly describe the emergency‑related amendments introduced by the respective decrees.

I. Regulation of Tax Obligations During the State of Emergency

• Personal Income Tax and Social Contribution Tax

Pursuant to Government Decree No. 10/2026 (I. 30.), with retroactive effect from 1 January 2026, the personal income tax and social contribution tax obligations applicable to certain benefits provided for representation purposes, as well as to products transferred as business gifts, within the framework of representation or taxable hospitality, or as low‑value gifts, have been amended.
Details of the tax rules relating to restaurant‑based representation are available here.

• Small Business Tax (KIVA)

Also pursuant to Government Decree No. 10/2026 (I. 30.), until the phase‑out of the state of emergency, the service charge does not qualify as a personnel‑related payment under the KIVA Act (Act CXLVII of 2012).

• Local Business Tax

The purpose of Government Decree No. 34/2026 (II. 26.) is to ensure that any timing rearrangements that may arise in the local business tax advance payment obligations of predecessor and successor taxable persons as a result of corporate restructuring (demergers) have as little impact as possible on the liquidity position of local governments, thereby ensuring the continuous and predictable performance of their public tasks during the state of emergency.

Under the decree:

1. In the case of a demerger, the successor may fulfil its advance tax reporting obligation under Section 41 (1) of the Local Taxes Act no later than the 15th day preceding the due date of its next advance tax instalment; this reporting obligation may also be fulfilled by the predecessor.
2. Contrary to Section 41 (6) of the Local Taxes Act, advance tax instalments are not to be determined based on the proportionate expected tax amount. Instead, based on the predecessor’s declaration, the local tax authority amends the second advance tax instalment payable for the advance payment period starting in the year preceding the current year to 50% of the annual amount specified in the declaration, and prescribes advance tax instalments payable for the advance payment period starting in the current year in an amount equal to 50% of the annual tax specified in the declaration, and also amends any already assessed advance instalments to 50% of the annual tax specified in the declaration. The predecessor’s declaration qualifies as a tax return.
3. The predecessor may also instruct that any overpayment recorded on its tax account be transferred to the successor’s account, and such transferred amount shall qualify as a payment made by the successor.

• Tourism Tax

Pursuant to Government Decree No. 87/2022 (III. 7.), during the state of emergency, a private individual who arrived in Hungary from the territory of Ukraine on or after 24 February 2022 and who lawfully resided in Ukraine prior to arrival is not subject to tourism tax.

•  Excise Duty

Government Decree No. 51/2026 (III. 9.) regulates the rate of excise duty applicable to petrol, diesel and other petroleum products during the state of emergency.
In addition, pursuant to Government Decree No. 93/2023 (III. 29.), certain rules applicable to liquidation proceedings have also been amended.

•  Advertisement Tax

The issue of the reintroduction of advertisement tax as of 1 July 2026 has once again come to the forefront with the publication of a new government decree (No. 87/2026 (IV. 23.)). Although, at first glance, the new regulation appears to project a further suspension of obligations, its actual effect — as also mentioned in our previous publication — is currently uncertain and depends on several factors.

•  January Special Tax of Energy Suppliers

Although energy suppliers applying the calendar year as their tax year were already required to pay, by 31 March 2026, the special tax related to the state of emergency that was introduced simultaneously with the January utility price cap — given that the obligation had to be fulfilled by the end of the third month of the 2026 tax year — as a result of the lapse of the emergency provisions it is questionable whether those companies whose tax year differs from the calendar year and begins after the phase‑out of the state of emergency, or whose payment obligation would fall after the termination of the state of emergency, will also be required to pay the special tax.

• Extra‑Profit Tax

Government Decree No. 197/2022 (VI. 4.) regulated the special tax payable by credit institutions, financial enterprises and petroleum product producers, which regulation has since been elevated to statutory level.
Act LIV of 2025 on the Extra‑Profit Tax prescribes that credit institutions, financial enterprises and petroleum product producers falling within the scope of the specified acts are required to assess, declare and pay the special tax for tax years starting in 2025 and 2026. As this obligation has been established at statutory level, the termination of the state of emergency will not directly affect its application.

Pursuant to Government Decree No. 358/2025 (XI. 13.), deviating from the provisions of the Extra‑Profit Tax Act, for the tax year starting in 2026 the tax rate of the special tax is 10% on the portion of the tax base not exceeding HUF 20 billion (instead of the statutory 8%), and 30% on the amount exceeding this threshold (instead of the statutory 20%).

Given that the amendments contained in Government Decree No. 358/2025 (XI. 13.) have not yet been elevated to statutory level, the determination of the amount of special tax payable in light of the termination of the state of emergency may raise questions for taxpayers.

II. Regulation of Other Fees and Obligations During the State of Emergency

• Tourism Development Contribution

Pursuant to Government Decree No. 10/2026 (I. 30.), during the state of emergency the rate of the tourism development contribution payable by confectioneries was reduced to 2% in respect of their hospitality‑related services.

• Solidarity Contribution

According to Government Decree No. 15/2026 (II. 3.), certain local governments are required to pay a solidarity contribution, the amount of which for the years 2023, 2024 and 2025 is determined retroactively by the decree.
For subsequent years, the decree does not prescribe a solidarity contribution payment obligation for these or other local governments; therefore, following the termination of the state of emergency, no such burden is expected.

•  Protected Fuel Prices

In view of the state of emergency, protected retail and wholesale fuel prices have once again been introduced at domestic fuel stations.
In order to ensure that moderated fuel prices remain guaranteed even after the termination of the state of emergency, based on a legislative proposal submitted on 17 April 2026 the Government would elevate the protected fuel price regime to statutory level; however, no decision has yet been taken on this matter.

• Regulation of Drugstore Product and Food Prices

In view of the state of emergency, the profit margins applicable to drugstore products and food industry products were already regulated during 2025. With the termination of the state of emergency, this restriction will also lapse, which may result in price movements for certain products.

III. Provisions Already Elevated to Statutory Level

Without striving for completeness, but in light of the significance of certain provisions, we draw attention to the fact that a number of decree‑level regulations have already been elevated to statutory level during the existence of the state of emergency.

• Default Penalty

By incorporating the provisions contained in the state‑of‑emergency decree, the maximum general default penalty may amount to HUF 400,000 in the case of natural person taxpayers, and up to HUF 1,000,000 in the case of non‑natural person taxpayers.
Furthermore, in the event of a breach of the rules on employee reporting, invoice and receipt issuance obligations, or record‑keeping obligations, the taxpayer may be subject to a default penalty of up to HUF 2,000,000.

• Supplementary Mining Royalty

Government Decree No. 404/2021 (VII. 8.) regulated the payment of a supplementary mining royalty introduced to support the economic restart, which was elevated to statutory level by Act L of 2025. Accordingly, the regulations relating to the supplementary mining royalty are expected to remain in force until 31 December 2026. As this obligation has been elevated to statutory level, the termination of the state of emergency will not have a direct impact on it; we merely draw companies’ attention to the deferral in the timing of the fulfilment of the payment obligation.

Should any further changes occur in connection with the phase‑out of the state of emergency and the decrees affected thereby, we will inform our Clients accordingly.