Corporate Taxation in Hungary (Part 7): Penalties and Late Payment Surcharges in 2025

This is the seventh and final article in our series covering the key rules of corporate taxation in Hungary. After reviewing the general and special provisions of the Hungarian corporate tax system, we now provide an overview of the penalties and surcharges applicable in case of non-compliance.

1. Sanctions for Non-Compliance with Tax Obligations in Hungary

In 2025, the Hungarian tax system continues to rely on voluntary compliance by taxpayers. However, failure to comply may result in the following types of sanctions:

– Administrative fines

– Late payment surcharges

– Tax shortfall penalties

– In certain cases, criminal liability

2. Taxpayer Classification – Status as of 2025

The Hungarian Tax Authority (NAV) classifies taxpayers into three risk categories:

– Reliable taxpayer – subject to more lenient rules and faster procedures

– Standard taxpayer – subject to regular rules

– High-risk taxpayer – subject to stricter supervision and harsher penalties

This classification is reviewed quarterly, and any changes are communicated to taxpayers via Hungary’s official e-government platform (Ügyfélkapu).

—

3. Common Tax Penalties in Hungary (2025)

Delayed Taxpayer Registration or Notification

If the taxpayer fulfills a registration or notification obligation after the deadline, but before an official notice or audit by the tax authority, a penalty may apply as follows:

– Up to 15 days late: 5%

– Up to 30 days late: 20%

– More than 30 days late: 30%

– Maximum fine: HUF 100,000

Incorrect or False Tax Returns

If a taxpayer files an incorrect tax return, the penalty equals 5% of the difference between the correct and incorrect tax amount, but:

– Minimum fine: HUF 5,000

– Maximum fine: HUF 100,000

– If the error does not affect the tax amount, the lowest penalty applies.

Underpayment and Year-End Top-Up Obligation

If the advance payments during the year are less than 90% of the actual tax payable and the taxpayer fails to top up the amount by 20 December, a 20% surcharge applies to the shortfall.

Non-Payment or Late Payment of Tax Advances

If a taxpayer fails to deduct, determine or pay an advance or withheld tax by the deadline, in addition to the default interest, a 50% penalty interest applies.

– The base amount is the unpaid or withheld tax.

Unreported Business Activities

Conducting a taxable business activity without fulfilling the registration obligation may result in:

– First violation: fine up to HUF 100,000

– Repeated violation: up to double the previous fine

Late Payment Interest of Corporate Taxation

If taxes are paid after the due date, a late payment surcharge applies:

– Equal to twice the base interest rate of the Hungarian National Bank (MNB) applicable at the time of collection

– The surcharge may be reduced by 50% if the taxpayer corrects the error, pays the tax, interest, and reduced penalty before the tax authority issues an official assessment

—

4. Mitigation of Penalties re. Corporate Taxation in 2025

The NAV may reduce or waive penalties either ex officio or upon request, particularly if the taxpayer, their representative, employee, member, or agent acted with reasonable care under the given circumstances.

—

Conclusion

Hungarian corporate tax law imposes strict sanctions in 2025 for breaches of tax obligations. However, taxpayers acting in good faith still have opportunities to rectify errors and seek penalty relief through voluntary compliance.

This article provides general information and does not constitute legal advice.

Need legal assistance? Our law firm supports clients in handling tax disputes, NAV audits, voluntary disclosures, and penalty mitigation procedures.

Dr. Katona Géza, LL.M. ügyvéd (Rechtsanwalt / attorney at law)

___________________________________