From 1 January 2025, a significant change will come into force with regard to the tax exemption: under the relevant legislative amendment, the HUF 12 million threshold will rise to HUF 18 million. The relevant Government Decree No. 5/2025 (I. 25.) was published in the Hungarian Gazette on 25 January 2025 and entered into force immediately after its publication.

Benefits for Small Businesses

This change provides a positive opportunity for many small businesses, especially for those that have just exceeded the previous threshold in previous years. Thanks to the new rules, businesses below the revenue threshold of HUF 18 million will be exempt from paying VAT and the administrative obligations that go with it.

Eligibility and Reinstatement Details

The conditions for maintaining the exemption are clear: businesses that have not exceeded the HUF 18 million turnover threshold in 2024 or are not expected to do so in 2025 are eligible to opt for the exemption. In addition, those who have lost their tax exempt status in the past will be able to return to it, provided that their turnover remains below the new threshold. Important deadline: the relevant declaration must be submitted by 28 February 2025, otherwise the taxable person will continue to be subject to VAT. The easiest way to submit your declaration is via the National Tax and Customs Administration (NAV) Online Form Filling Application (ONYA) or the form provided.

Impact on Specific Business Sectors

The change in the legislation could be particularly beneficial for those who have been operating close to the previous threshold, such as self-employed persons, service providers and small traders. For those who are already exempt, there is nothing more to do: the new threshold will automatically apply.

Enhanced Financial Flexibility and Recommendations

The threshold increase not only reduces tax liabilities but also gives small businesses greater flexibility and financial room for manoeuvre. Accordingly, it is worth carefully considering the options available and, if necessary, seeking expert advice to find the legal and optimal tax solution.