Hungary is often known for its manufacturing strength and central position within Europe, but in recent years, it has also built a reputation as one of the more tax-efficient jurisdictions in the region.
At a flat rate of 9%, Hungary maintains one of the lowest corporate income tax (CIT) rates in Europe as of 2026. Introduced in 2017, it replaced an earlier two-tier system of 10% and 19% and has remained unchanged for nearly a decade.
Hungary is also a jurisdiction that tends to stand out from a personal income tax perspective, particularly for higher-earning employees and business owners, due to its fixed 15% rate. Alongside this, a range of tax incentives are available to companies, subject to applicable conditions and requirements.
If you’re looking to expand your business in Hungary, below are some of the key tax incentives that may be relevant to your investment planning:
Development tax incentive for clean technology
If you’re investing in the manufacturing capacity for clean technologies, you may qualify for development tax credits of up to 15% of eligible costs in Budapest and up to 35% elsewhere in Hungary. The development tax incentive regime is the country’s flagship corporate tax incentive for larger investments, with clean technologies now a key focus area.
This was newly added on 17 December 2025 by the European Commission and, from what we see, is making Hungary an increasingly attractive location for businesses in sectors such as semiconductors, renewable energy and energy storage.
To qualify, the Ministry of Finance must be notified before the investment begins. If you’re interested to find out more, please get in touch with our experts.
Beyond clean technologies, the regime remains broad in scope. Incentives are also available for investments in areas such as environmental protection, research and development or job creation. Eligibility is generally linked to the scale of the project. Most investments require a net present value of at least HUF 3 billion, or HUF 1 billion in designated regions, although lower thresholds may apply in certain cases, including HUF 100 million for specific types of investment. If you’re a small or medium-sized enterprise, reduced thresholds may apply.
Tax incentive for environmental investments
If you have activities related to environmental remediation, habitat restoration, biodiversity protection or other climate-related initiatives, you may consider this incentive. Up to 100% of eligible costs can be claimed under this tax incentive. In other cases, support is available at up to 70%, capped at EUR 30 million. The level of support will be determined based on the nature of the project and the size of the company.
To qualify, the investment must be reported before it begins. Certain projects may also require an independent expert certification to confirm eligibility.
Tax incentive for energy efficiency
For qualifying energy efficiency investments in Hungary, you may use this incentive to reduce your CIT liability, subject to applicable limits. To access this incentive, the investment must result in measurable energy savings. This requires a preliminary audit before the project begins and a certification after completion, both conducted by approved energy auditors.
If successful, the incentive may cover up to 45% of eligible costs, with a maximum of EUR 15 million (in HUF equivalent), taking into account other incentives or grants. Small and medium-sized enterprises may also benefit from higher support levels, with increases of up to 20% for small businesses and 10% for medium-sized businesses. The incentive can be claimed starting from the year the investment becomes operational and for up to five years thereafter.
There are, however, key conditions to consider. The investment must be maintained for at least five years, and it cannot be combined with the development tax incentive for the same project. Claims may also be subject to review by the tax authority, particularly in the early years.
Tax incentive for research and development
For research and development (R&D) activities, Hungary also offers targeted tax incentives aimed at supporting innovation-led investment. As a baseline, companies may benefit from a tax incentive equal to 10% of eligible R&D costs.
Higher levels of support are available for specific types of research activity. For projects conducted in collaboration with the Hungarian Academy of Sciences or its research institutes, the incentive may cover up to 100% of eligible costs, capped at HUF 500 million. In other cases, the extent of support depends on the nature of the activity. Applied industrial research may qualify for up to 50% of eligible costs, while experimental research is typically supported at up to 25%.
How we can help
From what we see, Hungary is an appealing jurisdiction for companies looking to establish or expand a commercial or manufacturing presence in Europe. With its position within the European Union (EU) and comparatively competitive tax environment, Hungary can be worth considering as a starting point for businesses entering the region. In other cases, companies may also consider jurisdictions such as Malta depending on priorities around tax planning and holding structures.
If you’re interested in any of the above incentives or want to understand how Hungary compares with other European jurisdictions for your business, get in touch with us.
Frequently asked questions
Where can I find official guidelines on Hungary's corporate tax incentives?
Official guidance on Hungary’s corporate tax incentives is typically issued by the National Tax and Customs Administration. As the rules can be subject to updates, you may also reach out to our team to stay informed on the latest requirements.
Can foreign investors access Hungary's corporate tax incentives?
Foreign investors can generally access the same corporate tax incentives as domestic companies, provided they operate through a Hungarian entity. Hungary’s incentive framework is intended to attract international investment, so there is no distinction based on ownership.
The key requirement is that the investment is conducted in Hungary and meets the relevant criteria. If you’re planning to enter the Hungarian market and would like guidance on setting up and accessing incentives, our team can assist.
What are the main corporate tax incentives available in Hungary?
For larger investments, the development tax incentive is often the most relevant as it can significantly reduce your corporate tax liability over time. If your business is focused on innovation, R&D incentives can help lower the cost of developing new products or services. It is worth considering these early as the way your business is set up and how the investment is structured may influence what you are able to claim.
What documentation is required to apply for corporate tax incentives in Hungary?
The documentation required will depend on the specific incentive but generally includes detailed information about the investment or activity. This may involve business plans, financial projections and evidence of eligible costs.
For certain incentives, such as energy efficiency schemes, you will also need technical documentation, including audit reports prepared by approved experts. In some cases, applications or notifications must be submitted before the project begins. Ongoing compliance may require maintaining records to support your claims.
Are there specific tax incentives for manufacturing firms in Hungary?
There are no incentives that are only for manufacturing. That said, existing incentives are well-suited for manufacturing activities. If you’re planning to set up a production facility, invest in machinery or create jobs, your project is likely to meet the criteria for several incentives. For example, a new factory may qualify for the development tax incentive while upgrades to equipment may fall under energy efficiency incentives.
Are there incentives for exporting companies under Hungary’s corporate tax system?
Hungary does not provide corporate tax incentives specifically for exporting companies. However, like manufacturing firms, export-oriented businesses can benefit from the broader incentive framework where their activities involve qualifying investments. To explore the latest incentives available to your business, please get in touch with us.
How do Hungarian corporate tax incentives apply to multinational corporations?
For multinational corporations, Hungarian tax incentives are typically applied at the level of the local entity conducting the investment or activity. This means that if your group establishes a Hungarian subsidiary or branch, that entity may qualify for incentives based on its own operations.
Larger groups may use incentives such as the development tax incentive for significant investments, as well as R&D incentives where applicable. If you would like to review how these incentives fit within your group structure, please reach out to our experts.
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Hawksford does not provide legal or tax advice and you must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our website.
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