Hungary Top-Up Tax: Who Pays the 15% Minimum and When

Hungary’s top-up tax only applies to companies that belong to a group with consolidated revenue of at least €750 million in two of the previous four years. If your Hungarian company is part of a group that size and its effective tax rate falls below 15%, Hungary collects the difference as a domestic top-up tax. Everyone else keeps paying the ordinary 9% corporate income tax.

That’s the short answer. The longer one matters if you’re inside a large group, if you’re about to sell to one, or if you’ve read a headline saying “Hungary’s 9% rate is over” and started to wonder whether your Hungarian company setup still makes sense. Below: who’s caught, how the Hungary top-up tax is calculated, the deadlines and fines, and the 2026 changes that altered the picture for US-owned groups.

What Is the Hungary Top-Up Tax?

The Hungary top-up tax is a 15% minimum tax on large groups, introduced by Act LXXXIV of 2023 to implement EU Council Directive 2022/2523. When a group’s Hungarian entities have an effective tax rate below 15%, the shortfall is payable as a top-up tax. Hungary’s domestic version took effect on 1 January 2024.

The law actually contains three separate charges, and people mix them up constantly:

• Domestic top-up tax (QDMTT). Hungary taxes its own low-taxed group members up to 15%. In force from 1 January 2024.
• Income inclusion rule (IIR). A Hungarian parent pays top-up tax on low-taxed subsidiaries abroad. Also from 1 January 2024.
• Undertaxed payments rule (UTPR). A backstop that lets Hungary collect top-up tax a parent jurisdiction didn’t. From 1 January 2025.

Those dates come from PwC’s Hungary corporate tax summary (last reviewed 1 July 2026). For most searchers, the one that matters is the first. Hungary chose to collect the top-up on its own companies itself, so the money stays in Budapest instead of flowing to a parent country’s treasury. That’s the whole logic of a domestic top-up tax: if someone’s going to collect the extra 6%, Hungary would rather it was Hungary.

The wider OECD framework is covered in our guide to OECD Pillar Two and the global minimum tax. This page sticks to how Hungary applies it.

Who Pays the Hungary Top-Up Tax?

The Hungary top-up tax applies to Hungarian constituent entities of multinational or large domestic groups whose consolidated revenue reached €750 million or more in at least two of the four fiscal years before the tested year. Groups below that threshold are entirely outside it, whatever their effective tax rate in Hungary.

The threshold test comes straight from Article 2 of the EU directive, and it’s measured at group level. A Hungarian Kft with €3 million of profit and a 9% rate doesn’t pay a forint of top-up tax if its owners don’t consolidate it into a €750 million group. A tiny Hungarian service company owned by a multinational may well pay it.

We see this confusion every few weeks. A founder reads that the EU “ended” low corporate tax rates, assumes Hungary’s 9% is gone, and asks whether to move the company to Bulgaria or Cyprus instead. For an owner-managed business, nothing changed. The 9% rate still applies to the vast majority of Hungarian companies.

Article 2(3) of the directive excludes governmental entities, international organisations, non-profit organisations, pension funds, and investment funds or real estate investment vehicles that sit at the top of a group. There’s also a de minimis exclusion: if a group’s average revenue in a jurisdiction is under €10 million and its average qualifying income is under €1 million, it can elect out for that jurisdiction (recital 18 of the directive). For a big group with only a small Hungarian sales office, that election can remove Hungary from the calculation altogether.

How many companies are we talking about? Világgazdaság reported in May 2026 that the rules affect roughly 2,000 to 3,000 Hungarian companies. Read that number twice. Next to the total number of companies registered in Hungary, it’s a tiny fraction.

How the Hungary Top-Up Tax Is Calculated

The Hungary top-up tax equals the gap between 15% and the group’s effective tax rate in Hungary, applied to Hungarian profit after a substance-based carve-out. The effective rate is covered taxes divided by adjusted GloBE income for all the group’s Hungarian entities combined, so one high-taxed entity can offset a low-taxed one.

In plain steps:

1. Add up the GloBE income of every Hungarian group member. This starts from accounting profit with a long list of adjustments.
2. Add up the covered taxes those entities paid, mainly corporate income tax.
3. Divide taxes by income. That’s the Hungarian effective tax rate.
4. If it’s below 15%, take the shortfall in percentage points.
5. Subtract the substance-based income exclusion, a slice of Hungarian payroll costs and tangible asset values that tapers down over ten years (recital 19).
6. Apply the shortfall to what’s left. That’s the top-up tax.

Why does Hungary land below 15% so often? The 9% headline rate is the obvious reason. Tax incentives push it lower still, especially development tax allowances that large manufacturers negotiate for big investments. A profitable subsidiary with few payroll costs and few physical assets will usually owe something close to the full gap between its rate and 15%.

Local business tax complicates the arithmetic. Municipalities levy it at up to 2% on a revenue-based figure, and companies outside the micro and small categories also pay a 0.3% innovation contribution (both per PwC). How much of that counts as a covered tax affects the final rate, and it’s exactly the kind of detail where group tax teams and NAV can see things differently.

Hungary Top-Up Tax Deadlines

The Hungary top-up tax has two main deadlines. The annual return is due 15 months after the tax year ends, extended to 18 months for the first year, so calendar-year groups filed their 2024 return by 30 June 2026. An advance return and payment for the next year is due by the 20th day of the 11th month after year end.

The 30 June 2026 date comes from NAV’s notice on the expanded 24GLBADO form, and the 20 November advance deadline from NAV’s reminder on the advance. The advance return has to be filed even when the advance works out at zero. The clock is ticking on that one every autumn, and it catches groups that assumed “nothing due” meant “nothing to file”.

What are the penalties for missing a deadline?

Hungary fines up to HUF 5 million for failing to make the required notification and up to HUF 10 million for failing to file, or for late, incomplete or incorrect returns, according to PwC’s summary of the Hungarian rules.

For tax years beginning before 31 December 2026, no penalty is imposed where the group member acted as could reasonably be expected in the circumstances. That’s a transitional cushion. It won’t last.

What Changed for US-Owned Groups in 2026

US-parented groups no longer face the income inclusion rule or undertaxed payments rule from fiscal years beginning on or after 1 January 2026, under the OECD side-by-side package agreed by the Inclusive Framework. They still pay Hungary’s domestic top-up tax, because the package leaves domestic minimum taxes in place in every jurisdiction that has one.

The OECD announced the agreement in December 2025, and the package itself, backed by 147 Inclusive Framework members, was released on 5 January 2026. For a US group with a low-taxed Hungarian subsidiary, the practical result is simple: Hungary’s QDMTT still bites. What disappeared is the risk of other countries topping up Hungarian profits through the IIR or UTPR. The package also extended the transitional country-by-country reporting safe harbour by a year and added a simplified effective tax rate safe harbour.

Bottom line for a US-owned Hungarian subsidiary: budget for 15% on Hungarian profits, minus the carve-out, and stop worrying about the backstop rules. If the group sits below €750 million, none of this applies anyway, though US owners still need to watch their home-country CFC rules, which tax foreign company profits on their own terms.

Is Hungary Still a 9% Tax Country?

Yes. Hungary’s statutory corporate income tax rate has been a flat 9% since 1 January 2017, the lowest in the EU, and the global minimum tax didn’t change it. Companies outside €750 million groups keep paying 9% on profit, plus local business tax of up to 2% and the 0.3% innovation contribution if they’re above the small-company size.

Large groups now face an effective floor of 15% in Hungary, minus the carve-out. Everyone else still gets the 9% rate.

If you’re comparing EU locations for a trading or holding company, Hungary still sits below Bulgaria’s 10% corporate tax and well below a Cyprus company at 15%. For a business owner thinking of living there too, our page on residency in Hungary covers the visa routes.

Common Mistakes With the Hungary Top-Up Tax

Four errors come up again and again.

• Testing revenue at company level. The €750 million test applies to the consolidated group. A small Hungarian entity inside a big group is in scope.
• Skipping the advance return because nothing’s due. The advance return is required even at zero.
• Assuming a high-taxed sister company fixes everything. Blending helps within Hungary only. Profits in other countries are tested separately.
• Restructuring a small company out of Hungary in a panic. I’ve watched owners spend real money moving a business that was never in scope. Check the group test first. It takes five minutes.

The history of how countries lined up behind the 15% floor is in our piece on the global corporate tax deal.

Hungary Top-Up Tax FAQ

Final Thoughts

The Hungary top-up tax is a big-company tax with a big-company compliance load. If your group crosses €750 million, the 9% rate becomes a 15% floor in practice, and you’re filing advances every November. If it doesn’t, Hungary is still the cheapest corporate tax rate in the EU and the global minimum tax is someone else’s problem. If you’re weighing Hungary for a new company, start with our Hungary incorporation guide.