Pillar 2 Dashboard: Hungary

On November 14, 2025, Hungary issued a Draft Regulation (for consultation) to provide for the detailed application of the Pillar 2 Safe Harbours.

On October 15, 2025, Hungary issued the draft Advance QDMTT Tax Declaration (Form 24GLBADO) as well as filing instructions and a draft XML guide. See Advance QDMTT Return filing. This was published on the ONYA E-Filing Platform on October 21, 2025.

On October 2, 2025, Hungary released the 2025 Autumn Tax Package. This includes some amendments to the operation of the Transitional CbCR Safe Harbour. A Bill was also issued to implement DAC 9. This was enacted and published in the Official Gazette on November 19, 2025.

On June 19, 2025, the 2025 Spring Tax Package was published in the Official Gazette.

On November 15, 2024, the Hungarian Tax Authority issued draft forms for the registration notification under Article 44(1) of the Minimum Tax Act, and the appointment of a domestic filing entity under Article 3(47).In December 2024, the Hungarian Tax Authority issued Updated Instructions for the submission of the registration forms. They can now be submitted via the ONYA (Online Nyomtatványkitöltő Alkalmazás) web portal on the e-services portal of the Hungarian Tax Authority Website.

On October 29, 2024, Hungary issued its Autumn 2024 Tax Package proposal. This included minor changes to the Pillar Two law. Most notably it expanded on the registration requirements. The Hungarian Autumn Tax Package (Bill T/9724 on Amendments to Certain Tax Laws) has been approved by Parliament and was sent to the President for signature on November 27, 2024. On November 28, 2024, this was published in the Official Gazette.


On November 30, 2023, Act LXXXIV of 2023 on ‘Additional taxes ensuring a global minimum tax level and amending certain tax laws in connection with this’ was published in issue 171/2023 of the Hungarian Gazette.

General

As expected, the law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.

As noted below, very few aspects of the First or Second Set of OECD Administrative Guidance are included in the law.

Under Section 2(2) of the law, it is to be interpreted in accordance with the provisions of the OECD model rules (where they are compatible with the law). Section 3(81) of the law states that this specifically includes not only the OECD Model Rules and the Commentary, but also the Safe Harbours and Penalty Relief Guidance, Administrative Guidelines and other documentation published by the OECD.

Unlike in a number of other jurisdictions, Section 2 of the law permits the GloBE Information Return (and any top-up tax payment) to be made in forints, US dollars or euros.

It also confirms that covered taxes for Hungarian purposes includes corporate income tax, local business tax (with a specific tax base for MNEs subject to the GloBE rules), income tax of energy suppliers and innovation contributions.

Administrative Guidance

Aspects of the First Set of OECD Administrative Guidance included in the law are:

 – Currency Conversion Rules (Article 1.1)

 – Consolidated Deferred Tax Amounts (Article 1.3)

 – Excess Negative Tax Carry-forward Guidance (Article 2.7)

 – Equity Gain or Loss Inclusion Election (Article 2.9)

The main aspect of the Second Set of OECD Administrative Guidance included in the law are the provisions relating to Transferable tax t credits;

As such, the following are not included in the law:

– Forex hedge election (Article 2.2)

– Debt release election (Article 2.4)

– Accrued Pension Expenses (Article 2.5)

– Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity (Article 3.2)

– Substitute Loss carry forwards (Article 2.8)

– Allocation of taxes arising under a Blended CFC Tax Regimes (Article 2.10)

–  The extension of the taxable distribution method election to insurance investment entities (Article 3.1)

– Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Article 3.4)

– Portfolio shareholding election (Article 3.5)

– Application of Tax transparency election to Mutual insurance companies (Article 3.6)

– Transitional rules (Article 4)

– Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4)

– Clarifying the definition of ‘Excluded Entity’ (Article 1.5)

–  Meaning of “ancillary” for Non-Profit Organisations;

–  Additional rules (such as the deemed 50% requirement where employees perform work outside the employer’s jurisdiction for the SBIE).

Safe Harbour and Penalty Relief Guidance

Section 32(1) of the law provides for the safe harbour provisions. It states that, subject to an election of the MNE group, the top-up tax will be deemed to be nil where the conditions are met as set out in a recognized international agreement.

QDMTT Safe Harbour

Section 32(3) applies the QDMTT Safe Harbour where the requirements of the OECD Model Rules (which include the Administrative Guidance) are met.

Section 7(1) of the November 2025 Draft Regulation provides that the QDMTT Safe Harbour applies where a foreign QDMTT is approved by the OECD and has qualifying status. The State Tax and Customs Authority is to publish qualifying jurisdictions by the last day of the second month of the calendar year.

The November 2025 Draft Regulation also applies the ‘Switch-Off Rule’ that prevents an MNE Group from applying the safe harbour to all or some Constituent Entities located or created in the QDMTT jurisdiction and requires the MNE Group to switch to the general credit method for the offset of the QDMTT.

This applies where:

 – A QDMTT jurisdiction decides not to impose a QDMTT on Flow-through Entities created in its jurisdiction;

 – A QDMTT jurisdiction decides not to impose a QDMTT on Investment Entities subject to Articles 7.4, 7.5, and 7.6 of the GloBE Rules (Provisions for the Effective Tax Rate Computation for Investment Entities, Investment Entity Tax Transparency Election, or the Taxable Distribution Method Election);

 – A QDMTT jurisdiction includes members of a JV Group (which includes Joint Ventures) within the scope of the QDMTT but imposes the liability on Constituent Entities of the main group instead of directly on the members of the JV Group;

 – A QDMTT jurisdiction decides to adopt the UTPR exclusion for MNEs in their initial phase of international activity without any restriction.

Note that the additional Switch-Off rule in the January 2025 OECD Administrative Guidance is not included (jurisdictions that allow certain DTA reversals arising from tax benefits provided by General Government to be taken into account for adjusted covered taxes (or for Transitional CbCR Safe Harbour purposes)).

Transitional CbC Safe Harbour

Section 32(2) specifically applies the Transitional CbC Safe Harbour.

The 2025 Autumn Tax Package includes some amendments to the application of the Transitional CbCR Safe Harbour.

Section 32 of the Minimum Tax Act provides for the basic rules for the safe harbour for Hungarian tax purposes. In particular, Section 32(2) provides for the three key tests (De-minimis test, ETR test and the Routine profits test).  However, Section 32(4) provides that the detailed rules will be determined by a ministerial decree.

Whilst the Law in the Autumn Tax Package does not provide all of the detailed rules, it does expand on the definition of simplified covered tax to be used for the simplified ETR test as well as determining what is a Qualified Country-by-Country Report and Qualifying Financial Statements.

Simplified covered taxes for the purposes of the Simplified ETR test are defined as income tax expenses recognised in the qualifying financial  statements including deferred tax expense, but excluding covered taxes, uncertain tax positions recognised in the qualifying financial statements, and income tax expenses arising from Hybrid Arbitrage arrangements.

This is in alignment with the OECD definition of simplified covered taxes.

A new Section 32a included in the Law provides for the determination of a Qualifying CbC Report.  In particular it provides rules for Groups that are not required to prepare and file CbCR reports (eg domestic groups).

The December 2023 Administrative Guidance provides that they can still qualify for the Transitional CbCR Safe Harbour if they complete section 2.2.1.3(a) of the GloBE Information Return using the data from Qualified Financial Statements that would have been reported as Total Revenue and PBT in a Qualified CbC Report if the MNE Group were required to file a CbC Report.

For this purpose, “as reported in a Qualified CbC Report” means the amounts that would have been reported in a Qualified CbC Report if the MNE Group were required to file a CbC Report in accordance with the CbC requirements in the UPE Jurisdiction (or, if the UPE Jurisdiction does not have CbC requirements, the amounts that would have been reported in accordance with the OECD BEPS Action 13 Final Report and the OECD Guidance on the Implementation of Country-by-Country Reporting).

This is reflected in the new Section 32a.

A new Section 32b is inserted in the Minimum Tax Act to define Qualified Financial Statements in accordance with the OECD Safe Harbour guidance as:

-Accounts used to prepare the Consolidated Financial Statements of the UPE (which reflects the same requirement under Article 3.1.2 of the GloBE rules);

-The separate financial statements of each Constituent Entity provided they are prepared in accordance with either an Acceptable Financial Accounting Standard or an Authorised Financial Accounting Standard if the information contained in such statements is maintained based on that accounting standard and it is reliable; or

-In the case of a Constituent Entity that is not included in an MNE Group’s Consolidated Financial Statements on a line-by-line basis solely due to size or materiality grounds, the financial accounts of that Constituent Entity that are used for the preparation of the MNE Group’s CbC Report.

The November 2025 Draft Regulation includes a number of aspects not included in the Minimum Tax Law, including:

– Transition Period (OECD Safe Harbour Guidance)

– Special Rule for Joint Ventures (OECD Safe Harbour Guidance)

– Special Rules for Investment Entities and their Constituent Entity-owners (OECD Safe Harbour Guidance)

– Special Rule for Net Unrealised Fair Value Loss (OECD Safe Harbour Guidance)

– Purchase Accounting Adjustments(consistent reporting condition, goodwill impairment adjustment) (December 2023 OECD Administrative Guidance)

– Qualified Financial Statements for PEs (December 2023 OECD Administrative Guidance)

It should be noted that the 2025 Autumn Tax Package also included some amendments to the application of the Transitional CbCR Safe Harbour, which overlap with the November 2025 Draft Regulation. For instance, it provides that the detailed rules for the application to Hybrid Arbitrage arrangements are to be provided by Ministerial Decree.

The following is included in the November 2025 Draft Regulation, which overlaps with the 2025 Autumn Tax Package:

-MNEs not required to file CbC Reports (December 2023 OECD Administrative Guidance)

-Detailed rules for the treatment of hybrid arbitrage arrangements (December 2023 OECD Administrative Guidance).

NMCE Simplified Calculations Safe Harbour

Section 8 of the November 2025 Draft Regulation provides for the Simplified Calculations Safe Harbour for Non-Material Constituent Entities (NMCEs). The aim being to reduce or simplify the number of computations and adjustments an MNE is required to make under the GloBE Rules.

NMCEs are constituent entities of an MNE Group that are not consolidated on a line-by-line basis in the MNE Group’s audited consolidated financial statements solely for size or materiality grounds. It also includes any permanent establishments of these entities (providing the Main Entity is itself an NMCE.)

Transitional UTPR Safe Harbour

Section 9 of the November 2025 Draft Regulation provides for the Transitional UTPR Safe Harbour. This deems the UTPR Top-up Tax amount for a UPE Jurisdiction to be zero if the UPE Jurisdiction has a corporate income tax rate of at least 20 percent.

It applies for Fiscal Years which begin on or before December 31, 2025 and end before December 31, 2026.

Elections in the OECD Model Rules

All of the elections included in the OECD Model Rules and the EU Minimum Tax Directive are provided in the law, including:

– Excluded Entity Election (Section 1(4) of the law)

– Stock-Based Compensation Election (Section 16(2) of the law)

– Election to use the Realization Method (Section 16(11) of the law)

– Election to Spread Capital Gains (Section 16(16) of the law)

– Consolidation Election (Section 16(24) of the law)

– Unclaimed Accrual Election (Section 3(73) of the law)

– GloBE Loss Election (Section 23 of the law)

– Prior Year Adjustment Election (Section 25(4) of the law)

– De minimis Election (Section 30 of the law)

– Substance-Based Income Exclusion Election (Section 28 of the law)

– Taxable Distribution Election (Section 43 of the law)

– Tax Transparency Election (Section 42 of the law)

– Distribution Tax Regime Election (Section 40 of the law)

The only elections included in the OECD Administrative Guidance included in the law are the:

– Equity Investment Inclusion Election (Section 16(1) of the law);

– Excess Negative Tax Carry-Forward Election (Section 21(5) – refers to a CE applying the  AG);

The following are not yet included:

– Debt Release Election;

– Foreign Exchange Hedge Election;

– Portfolio Shareholding Election;

Differences to Model Rules

As expected, the law closely follows the EU Directive. There are very few options given to member states in the EU Directive in terms of flexibility over national implementation.

The main options relate to the design of the QDMTT and the inclusion of the OECD Administrative Guidance (see above).

The key differences are with the OECD model rules, including the extension to  include large scale, purely domestic groups.

The OECD Model Rules allow flexibility as to how to apply the UTPR. Hungary’s approach is to apply a UTPR top-up tax rather than a denial of deduction.

As such the carry forward provisions in Article 2.4.2 of the Model Rules for UTPR amounts not sufficient to provide for the additional cash tax expense are not relevant and these rules are not included in the law.

Qualifying Domestic Minimum Top-Up Tax (QDMTT)

Sections 11 of the law provides that Hungary will apply a domestic minimum top-up tax (intended to be a QDMTT) for financial years beginning on or after December 31, 2023.

The QDMTT applies to both MNE groups and domestic groups.

Section 11(4) of the law provides that the standard GloBE calculation rules apply for determining the top-up tax, but they are then subject to a number of adjustments:

100% of the Top-Up Tax

Section 11(6) of the law provides that Top-up Tax that is subject to the QDMTT is based on the whole amount of the Jurisdictional Top-up Tax calculated, irrespective of the Ownership Interests held in the Constituent Entities located in Hungary by any Parent Entity of the MNE Group.

Jurisdictions may design their QDMTT legislation to apply only where all the domestic Constituent Entities in the jurisdiction are 100% owned by the UPE or a POPE for the entire Fiscal Year, but this is not the approach Hungary has taken.

Joint Ventures and Minority-Owned Constituent Entities

Section 11(7) of the law provides that a minority-owned group member, joint venture or group of joint ventures pays the QDMTT only in respect of a group of companies.

Accounting Standards/Currency

Sections 11(8)-(10) of the law provides specific rules as to when a local accounting standard can be used.

It provides that if each group member maintains its accounting records under a local financial accounting standard under which it determines its corporate tax liability or its accounts have been audited by an independent auditor, profits for calculating the QDMTT are determined under that local financial accounting standard.

If not all domestic group members keep their accounting records on the basis of a local financial accounting standard or if the tax year for the local financial accounting standard differs from the tax year applied by the multinational group, the domestic QDMTT profits are determined by applying the UPE accounting standard.

If the QDMTT is determined on the basis of the local financial accounting standard and each group member publishes its accounts in accordance with the local accounting standard, then the QDMTT shall also be determined on the basis of the currency used for the preparation of the accounts under the local accounting standard.

QDMTT Unpaid

Any QDMTT that has not been paid within four years is usually taken into account for top-up tax purposes in the fifth year. This does not apply for the QDMTT calculation (just for tax under an IIR or UTPR). This is required to avoid circularity and ensure the QDMTT is not taken into account for the domestic minimum tax calculation. Section 11(9) provides for this.

Push-Down Taxes

Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This is included in Section 11(8) of the law.

This preserves Hungary’s primary right to tax income accruing to a Hungarian member entity which is also a CFC. If there were no statutory derogation from the general GloBE rules for the calculation of the domestic minimum tax, and the CFC tax paid by the controlling company abroad were included in the included taxes of the Hungarian CFC, the effective tax rate would be increased. Therefore, excluding the CFC tax from the Hungarian CFCs covered taxes allows Hungary to tax low-taxed income at a higher rate than would be the case under an

Section 11(11) also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions. The original law did not specifically exclude Hungarian withholding tax on dividends from this (as is required in the OECD Administrative Guidance). The amended law provides for Hungarian WHT on dividends to be allocated to the Hungarian entity.

Allocation

Under Article 11(13) of the Law a group of companies with a QDMTT liability may choose annually to:

– allocate the QDMTT among the group members based on GloBE income or the excess profit (as a proportion of the group members GloBE income/excess profit over the total group amount in the jurisdiction) in which the parent company has a 100 per cent shareholding, or

– the QDMTT determined for all domestic group members can be paid by a designated group member.

Section 44(1) of the law provides that a Hungarian entity within the scope of the GloBE rules (or a designated domestic entity acting on its behalf)  is required to notify the tax authority within 12 months from the beginning of the tax year concerned. Section 26 of the amendment law in the 2025 Spring Tax Package (approved on June 19, 2025), amends the registration deadline to the last day of the second month following the last day of the tax year.

The Autumn Tax Package provides that the information to be provided will be:

-the identification information of the group members, including their value added tax number, intra-community VAT number (if any), the State in which they are resident and their classification under the GMT law

-information on the overall corporate structure of the multinational group or large domestic group, including the controlling stakes held by each group member in other group members.

On November 15, 2024, the Hungarian Tax Authority issued the draft registration form.

Unlike the requirements in the Autumn Tax Package, the draft registration form only requires data on the domestic constituent entities of MNE or large-scale domestic groups and their ultimate parent entities.

In addition, the registration form requires the type of top-up tax liability to be chosen as either:

-Qualified domestic top-up tax
-Qualified IIR tax
-Qualified UTPR tax (from 2025)
-None of the above

The draft domestic filing entity form was also released. This permits a domestic entity to be designated to file the registration form (and other GloBE tax returns) on behalf of other domestic members of the MNE/domestic group. In this case, a single registration form is be submitted for all domestic group members under Section 3(47) of the law.

In December 2024, the Hungarian Tax Authority issued Updated Instructions for the submission of the registration forms. They can now be submitted via ONYA (Online Nyomtatványkitöltő Alkalmazás) e-services portal of the Hungarian Tax Authority Website.

The relevant aspects of the submission of a GloBE Information Return (GIR) are included, as provided in the EU Directive.

The approach is that every Constituent Entity located in Hungary will have an obligation to file a GIR in Hungary. However, this obligation can be discharged if the GIR is filed by:

– A Designated Local Entity,

– The Ultimate Parent Entity, or

– The Designated Filing Entity.

Where the GIR is being filed by either the Ultimate Parent Entity or the Designated Filing Entity, the Constituent Entity, must file a notification.

The notification must contain:

– Details of the entity that is filing the GIR, and

– The jurisdiction in which such an entity is located.

Where the GIR is filed by the Designated Local Entity it needs to outline the Constituent Entities that it is filing on behalf of.

The GIR must be filed no later than 15 months after the end of the fiscal year (with an 18-month deadline for the Transition Year).

Under Section 44(4) of the law the double filing relief notification must be made within six months of the date of submission of the return.

Article 44(8) of the law also requires payment of top-up tax by the filing deadline.

However, Section 28 of the 2024 Autumn Tax Package provides that for QDMTT purposes, the group member (or a designated filing entity) must submit an advance tax declaration and pay the QDMTT by the 20th day of the eleventh month following the last day of the relevant tax year.

Penalties

Section 227B of Law CL of 2017 provides that a penalty of up to 10 million forints applies for failure of file or late filing.

Registration

Section 44(1) of the law provides that a Hungarian entity subject to top-up tax is required to notify the tax authority within 12 months from the beginning of the tax year concerned.

In November 2025, FAQs on the Advance QDMTT Return filing were issued.

On October 15, 2025, Hungary issued the draft Advance QDMTT Tax Declaration (Form 24GLBADO) as well as filing instructions and a draft XML guide. See Advance QDMTT Return filing. On 21 October, 2025 Form 24GLBADO for the Advance QDMTT Tax Declaration was published on the ONYA platform and is available for submission.

On November 15, 2024, the Hungarian Tax Authority issued draft forms for the registration notification under Article 44(1) of the Minimum Tax Act, and the appointment of a domestic filing entity under Article 3(47).

In December 2024, updated instructions were provided and the form is now available via the ONYA web portal via the Tax Authority e-services website.