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Changes in the Local Taxes from 1 January 2025

Hungary
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Based on the 2017 Central Budget Act, the financial system of the local governments was supplemented by a new source: the solidarity contribution, which is paid to the central budget by a proportion of municipalities with a high per capita tax burden and is aimed at improving equal opportunities.

In addition to this, the 2025 Central Budget Act provides for the payment to the Regional Development Fund of the local business tax surplus of the local municipalities paying the solidarity contribution in excess of the solidarity contribution surplus.

The Regional Development Fund was established toon 1 January 2025 to implement the overall regional development policy, strengthening regional cohesion, reducing regional disparities in development, improving territorial competitiveness, creating conditions for sustainable development, promoting the spatial diffusion of innovation, and equal access to public services. The Fund provides financial support for the achievement of regional development objectives. It is likely that the introduction of the payment obligation of local business tax surplus also contributed to the fact that several municipalities decided to increase certain local taxes from 1 January 2025.

By Lidia Suveges, Attorney at law, KCG Partners Law Firm

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
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  • We are driven by our vision to shape and lead the Hungarian legal market and become a first choice law firm in our practice areas.

Firm's website: http://www.kcgpartners.com