Why Hungary

Electricity grid capacity tender rules published for consultation – status: Public Consultation

A draft bill on the allocation of available capacity on Hungary’s medium- and high-voltage electricity grids has been released for public consultation. The proposal would govern the tender process for new grid connection capacity and is intended to facilitate the integration of additional renewable generation capacity into the electricity system.

While the original plan envisaged the allocation of 700 MW of capacity for new wind power projects, it is now announced that the upcoming tender is expected to allocate nearly 1,000 MW in response to stronger-than-anticipated market demand. Under the draft legislation, the tender notice would have to be published by 31 August 2026, and successful bidders would have 24 months to initiate their grid connection.

Changes to trust taxation and corporate income tax rules – status: Legislative proposal submitted

A draft tax bill has been submitted that would substantially amend the taxation of Hungarian trusts by eliminating a significant tax advantage available under the current regime. The proposal would introduce a system more closely aligned with the taxation of inherited assets, while retaining certain exemptions. It would also expand reporting obligations and introduce mandatory tax authority audits.

The proposal would further abolish several corporate income tax base reduction items and amend or phase out certain minor taxes, including taxes previously found incompatible with EU law by the Court of Justice of the European Union. In addition, it would double the air emission fee rate, reflecting the increasing focus on environment protection.

Further, a broader review of the corporate income tax system is also planned. The review is expected to focus on large companies and may lead to a broader tax base and more limited tax incentives, rather than an increase in Hungary’s current 9% corporate income tax rate.

Hungary to join EU satellite and artificial intelligence programmes – status: Ministerial announcement

Hungary plans to join the EU’s IRIS² satellite programme and the AI Gigafactory programme.

Under IRIS², Hungary is expected to gain access to a secure European satellite communications network comprising approximately 300 satellites, including 17 allocated to Hungary. The network is scheduled to become operational by 2030. The programme is intended to reduce reliance on private satellite providers and support developments in cybersecurity, defence, agriculture, research and development, and the domestic space industry.

Hungary has also joined a Polish-led consortium under the EU’s AI Gigafactory programme. Related investments of EUR 500 million are planned. The stated objective is to strengthen Hungary’s artificial intelligence capabilities and reduce the country’s regional technology gap in a field expected to have a broad economic impact.

European Commission calls for further rule-of-law reforms in Hungary – status: Published recommendations

The European Commission’s 2026 Rule of Law Report acknowledges reforms introduced by the new Hungarian Government in areas including judicial governance, anti-corruption safeguards, media regulation and civil society. However, the Commission considers that the practical impact of several measures cannot yet be assessed and recommends further action regarding court case allocation, judicial remuneration, lobbying rules, high-level corruption cases and the legal framework for civil organisations. Following the European Commission’s assessment, further measures are expected to strengthen compliance with rule-of-law standards and consolidate the progress achieved to date.

Hungary joins EU Energy Storage Initiative – status: Tripartite agreement signed

Hungary has joined the EU’s Energy Storage Initiative, a new EU-level agreement between member states, public and private sector stakeholders, aiming at energy storage capacity development across Europe. As a new member, Hungary has committed itself to adding 700 MW of new storage capacity by 2028, supporting the integration of renewable energy, improving grid flexibility, and strengthening security of supply.

Legislation proposal concerning wind turbines - status: Public consultation

A public consultation has been launched on the proposed legislation for the establishment of wind turbines and the corresponding permit procedure. The proposal would ease the localization requirement of wind turbines and increase the maximum permitted height of wind turbines to 199 metres instead of the current maximum of 130 metres.

Government intends to uphold price margin caps – status: Ministerial communication

It has been indicated that the government does not intend to phase out the “price margin cap”, despite calls from market participants for the measure to be lifted. The price margin cap, introduced as a temporary measure in early 2025, limits retailers’ margins on selected food and drugstore products. It currently applies to 43 food products and 30 drugstore product categories.

New wind power capacity tender – status: Ministerial announcement

The Minister for Economy and Energy announced that a tender for new wind power generation capacity will be launched on 31 August 2026, enabling the connection of at least 700 MW of new wind power capacity to the electricity grid. According to the announcement, the first phase is expected to generate approximately EUR 1 billion of investment in Hungary. A draft of the tender documentation is expected to be released for public consultation in mid-July 2026. The announcement also states that the Government's broader objective is to increase Hungary's installed wind power capacity to approximately 4 GW by 2030, representing a tenfold increase compared to the current installed capacity.

Reduction of the central bank base rate – status: Central Bank decree in force

The Monetary Council of the National Bank of Hungary (MNB) reduced the central bank base rate from 6.25% to 6.00%. MNB also indicated that further interest rate cuts may be implemented during the summer, supported by lower inflation and improving macroeconomic conditions.

Amendment to the Hungarian Constitution – status: Public Consultation

Following the adoption of the previous amendment, the proposal for a new amendment of the constitution has now been released for public consultation. This new proposal introduces several significant restrictions affecting constitutional offices. Among the key changes are a 12-year limit on the terms of MPs and the establishment of a maximum age of 70 for constitutional judges. A special provision of the amendment also aims at removing the current president of the Republic.

National Asset Recovery and Protection Office to be established – status: ­Public consultation

A new draft bill proposes the establishment of the National Asset Recovery and Protection Office, an independent public authority responsible for safeguarding public assets. A special aim of the Office is to recover such State assets that have been unlawfully alienated in the past 20 years. The Office would have broad competence to review matters involving public procurements, subsidies, concessions, state- and municipal assets, state-owned or publicly funded entities and EU-funded projects. It would be empowered to conduct risk assessments and public-asset protection reviews, request documents and data, carry out on-site inspections, require cooperation from public and private actors, and initiate administrative, civil or criminal proceedings or other competent authority procedures where appropriate.

Review of tobacco regulatory framework – status: Published governmental measure

A government resolution was adopted, ordering the review of tobacco-concession contracts and the regulatory framework of concession tenders, with a deadline of 1 August. The current tobacco concession system was established in 2013. Under this system, the retail sale of tobacco products falls under the exclusive competence of the State, with sales limited to licensed “National Tobacco Shops” operating under fixed-term concession contracts in a closed and centrally supervised supply chain.

Review of gambling regulatory framework – status: Published governmental measure

In parallel with the review of the tobacco regulatory framework, another government resolution ordered the review of casino-concession contracts and the regulatory framework of concession tenders, with a deadline of 15 August. Hungary’s casino market is built around a tightly controlled concession and licensing model, where casino operators need state-granted rights and authorisation from the Supervisory Authority for Regulatory Affairs. Under this model, both land-based and online gambling activities are subject to this licensing requirement and additional sector-specific regulatory oversight, which has restricted the opportunity to enter the market to a small number of concession holders.

Foreign cryptocurrency exchange service providers may return to Hungary  – status: Public consultation

The previous legislation required companies providing cryptocurrency exchange services to obtain approval from a designated “validator” firm, being a single, state-approved company having a monopoly in this field. Violations of this validation requirement constituted a criminal offence. This led to the exit of numerous foreign cryptocurrency service providers. The proposed changes seek to abolish this validation obligation and remove the related criminalization, paving the way for cryptocurrency service providers to return to the Hungarian capital market.

Our article on the topic: Regulatory barriers for foreign crypto service providers may soon disappear in Hungary

Revision of NIS2 audit requirements – status: Governmental decree in force

Up to now, cybersecurity regulations allowed only a select few firms to conduct high-level NIS2 audits. The new regulatory changes broaden the scope of the auditors qualified to participate. This expansion not only opens the market but also enables NIS2-affected companies to arrange their mandatory audits with greater transparency and efficiency, ultimately reducing costs and improving accessibility.

Wealth tax – status: Bill under preparation

The government is moving ahead with the announced wealth tax of 1% on wealth exceeding HUF 1 billion (EUR 2.85 million), which is expected to generate a tax revenue of HUF 300 to 600 billion (EUR 850 million to EUR 1.7 billion). The legislation is expected to be adopted by the end of October 2026, and the collection of the tax will start in 2027. Key aspects of the regime are expected to adopt the Swiss wealth tax framework as a point of reference.

Phase-out of interest rate cap on mortgage loans – status: Launched on public and professional consultation

Since September 2025, the interest rates banks can apply to certain mortgage loans are capped. It is now suggested that such ceiling on interest be gradually phased out, which may restore market-based pricing within the affected loan portfolio.

Noteholders of private equity funds become transparent – status: Legislative proposal submitted

A legislative proposal intends to increase the transparency of the beneficial owners of private equity funds. Accordingly, individuals holding, directly or indirectly, at least 25% ownership interest or voting rights, or otherwise exercising effective control, would qualify as beneficial owners and need to be registered in the UBO register. The amendments may also result in enhanced disclosure obligations for private equity funds and their managers.

Suspension of guest worker admissions – status: Governmental decree in force

The guest worker residence permit scheme allowing the mass employment of workers hired from third countries has been closed with immediate effect. The reasons for the closure are to limit the large-scale influx of guest workers and to encourage the employment of Hungarian workers. Independently from this measure, employment-purpose residence permits remain still available for foreign workers under the generally applicable rules.

Review of private equity fund rules – status: Published governmental measure

It is proposed to review the existing system and legal framework governing private equity funds, with particular emphasis on the transparency of beneficial ownership structures. The Minister of Finance has been tasked with preparing the draft legislative framework by 15 June 2026.

Utilization of EU funds concerning electricity capacity – source: Press release

Out of the EU funds to be retrieved by Hungary by the end of August, EUR 1.5 billion will be directed towards electricity grid modernization, network expansion and new grid connections. These investments are expected to alleviate existing capacity constraints, accelerate the integration of renewable energy projects, and create a more attractive environment for renewable energy developments.

Unchanged credit rating of Hungary

The three major credit rating agencies have completed the first round of their annual sovereign rating reviews. In the case of Hungary, all ratings remained unchanged. Following the agencies’ confirmation of their previous ratings and outlooks in recent weeks, the next comprehensive assessment of the Hungarian economy is expected at the end of the year.

End of emergency legislation – status: Act of law

At the outbreak of the Russian-Ukrainian war, emergency legislation was introduced granting the Hungarian Government expanded legislative power which was exercised through governmental decrees. Abolishing the opportunity, the state of emergency which had been in place since 2022, came to an end on 14 May 2026.

Amendment to the Hungarian Constitution – status: Parliamentary proposal

A proposal to the Hungarian Parliament was submitted to amend the Hungarian Constitution. According to the proposal, the amendment would limit the term of office of the Hungarian Prime Minister to a maximum of two terms (eight years), abolish the Sovereignty Protection Office, and enable the state to reacquire certain assets transferred to public-interest asset management foundations.

Release of EU funds – status: Press release

An agreement has been reached between Hungary and the European Union concerning the release of EU Funds towards Hungary in the amount of EUR 16.4 billion. The parties have agreed on the specific milestones and conditions for disbursement. The EU funds can be utilized in the following key investment areas: the development of transport infrastructure, healthcare services, social infrastructure, and environmental projects.

Introduction of wealth tax and reassessment of tax exemptions applicable to trusts – status: Published governmental measure

In accordance with the promise undertaken by the new ruling political party a wealth tax will be introduced in Hungary. Further the tax exemptions currently applicable to trusts will be reviewed. The Minister of Finance has been tasked with the preparation of the framework of the relevant legislation by 5 June 2026.

Review of enforcement, notarial and company winding-up proceedings – status: Published governmental measure

It is proposed to review the existing judicial enforcement, notaries, and liquidation/insolvency proceedings. The objective of the reform of these systems is to make the procedures more cost-effective, efficient, and less profit-oriented.