Steps to Maximize Hungary’s Development Tax Incentives for Major Investments

In 2025, Hungary offers a generous development tax incentive regime. If you invest in the country, you can claim allowances worth up to 80% of your calculated corporate income tax. These allowances apply to the capital you spend on a predefined project.

Hungarian authorities require notifications, updates, and reports on all investments. So, if you keep them up to date and plan well, you can maximize the tax incentives.

Check the Eligibility Criteria

• Determine how big your enterprise is. If your business is medium-sized, you qualify for tax incentives if your headcount reached 50 or more in the prior financial year. Small businesses can qualify as well if they have at least 10 employees. It is important to note that bigger firms but meet EU state-aid thresholds.
  

• Check minimum investment limits. If you want to access Hungary’s development allowance, your investment in the country must meet certain minimums.

  – HUF 100 million for medium enterprises
  – HUF 50 million for small enterprises
  – HUF 300 million for medium and HUF 200 million for small businesses in specific high-tech projects
  

• Take note of eligible project types:

  – Environmental protection equipment
  – Zoogenic food production
  – Entertainment, including film and video production
  – Research and experimental development
  – Job creation

Register Early and Let the Authorities Know

You must submit a notification to Hungary’s Ministry for National Economy before starting a project in the country. The notification should include a detailed description of the project, its location, and investment value.

You will receive a registration certificate securing your right to claim the allowances in the following tax returns.

• When completing a tax return for the year your investment becomes operational, you must provide the project completion date and eligible expenses at present value. You may be denied tax benefits if you don’t disclose this information.

Structure Costs to Make the Most of Allowances

Qualifying capital assets count towards your tax allowance. You must exclude land and VAT from this. Try to plan your purchases to cover expenditures in the first eligible year.

If your investment focuses on research, you may qualify for the development allowance and R&D tax credits. Hungary allows a double deduction for qualifying R&D expenses. It also allows depreciation on R&D assets.

If you claim a Pillar Two-compliant R&D tax credit, it may restrict the use of other R&D incentives at the same time.

Apply New R&D Credits Under Pillar Two

As of 2025, a new refundable R&D tax credit applies.

• 10% of direct R&D costs. This is capped at €55 million per project lasting up to five years.

• Alternative flat HUF 500 million for research facilities and universities. You should use this credit before using other incentives. You may be able to convert unused credits into a cash refund after four years.

Compliance and Reporting

Certain general job-maintenance criteria have become less strict in 2025, but commitments stand for specific grants. For example, R&D-linked subsidies need at least 10 new qualified R&D roles, as well as domestic suppliers.

Hungarian authorities can review your project for up to four years after providing an allowance. During this time, you must ensure that your employee numbers and project costs do not fall below the minimum limits.

Use Hungary’s Full Development Tax Incentives in 2025

If you familiarize yourself with the relevant thresholds and requirements, you can make the most of tax incentives in Hungary. In addition to these, you can include R&D credits and targeted regional projects to maximize after-tax returns on a major investment.

Sources

https://taxsummaries.pwc.com/hungary/corporate/tax-credits-and-incentives

https://www.lexology.com/library/detail.aspx?g=1b1306f2-8ccb-4e99-93d9-9279ad13a868

https://origostudios.com/unlocking-film-potential-the-benefits-of-hungarys-30-tax-rebate/

https://home-affairs.ec.europa.eu/system/files/2020-09/13a.hungary_business_study_en_version.pdf/

https://ec.europa.eu/taxation_customs/tedb/legacy/taxDetail.html?id=301%2F1424159206&taxType=CIT

https://www.interregeurope.eu/help-centre/apply-for-funding

https://home-affairs.ec.europa.eu/system/files/2020-09/13a.hungary_business_study_en_version.pdf

https://stip-pp.oecd.org/innotax/countries/Hungary

https://stip.oecd.org/innotax/incentives/HUN4/

https://kpmg.com/hu/en/home/insights/2025/04/taxalert-2025-04-22.html/

https://www.ey.com/en_gl/technical/tax-alerts/hungary-enacts-local-legislation-on-beps-2-0-pillar-two