Hungary will introduce a new wealth tax on assets worth more than HUF 1 billion from 2027, while the government plans to significantly broaden access to the KATA small-business tax scheme and remove a special tax allowance for professional athletes, Prime Minister Péter Magyar announced on Tuesday.

In a video posted on social media, Magyar outlined changes to three areas of taxation: the new wealth tax, KATA and EKHO, a simplified tax scheme used by certain professionals including journalists, artists, performers and athletes.

Wealth tax to target assets worth over HUF 1 billion

The new wealth tax will come into force on 1 January 2027 and will have two rates. People with wealth exceeding HUF 1 billion will pay 1% on the portion above the HUF 1 billion threshold, while assets exceeding HUF 100 billion will be subject to a 1.5% rate, according to Magyar’s announcement.

The tax will cover a person’s overall wealth, including property, investments and company holdings. Assets held abroad or placed in wealth-management structures will also be covered.

Loans will be deductible from the taxable base. Taxes already paid on property and vehicles will also be deductible from the wealth tax itself, with the government saying this is intended to help avoid double taxation.

The government plans to introduce detailed rules for calculating the value of assets, primarily based on their actual market value. This will apply to both real estate and company holdings. The tax will be paid once a year through self-assessment. The first declaration will be based on taxpayers’ assets at the end of 2026 and will be due by 31 August 2027.

Only people whose wealth per person reaches HUF 1 billion will have to file a declaration. The Hungarian Tax and Customs Administration (NAV) is expected to provide a calculator to help taxpayers determine their taxable wealth. Magyar also criticised attempts to lobby against the new tax, saying people with less than HUF 1 billion in wealth would have nothing to do under the new system.

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KATA to become available to more small businesses

The government is also planning a major overhaul of KATA, Hungary’s simplified tax scheme for small businesses. The changes would once again allow part-time entrepreneurs, pensioners and university students running businesses alongside their studies to use KATA.

KATA taxpayers would also once again be able to invoice companies and other organisations, rather than being restricted to invoicing private individuals. The government expects more than 100,000 additional small businesses could become eligible for the scheme as a result. (1 euro = 366 forints)

However, the monthly fixed tax will increase. For full-time KATA taxpayers, the monthly amount will rise to HUF 100,000. Those using KATA alongside another job will pay HUF 50,000 per month.

There will be a transitional arrangement for those who invoice exclusively private individuals. They will pay HUF 75,000 per month in 2027, with the HUF 100,000 rate applying from 2028.

The government says the higher tax is partly intended to improve social security protection for KATA taxpayers. The amount used to calculate their sick pay, maternity benefits and future pension will also be increased.

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15% tax on certain business income

The revised KATA system will also introduce a 15% tax on income earned from invoicing companies and other organisations. However, the fixed KATA tax already paid will count towards this liability. As a result, a full-time KATA taxpayer will not face an effective additional tax burden on company income until their annual company revenue exceeds HUF 8 million, according to Magyar’s explanation.

The annual KATA revenue limit will also increase from HUF 18 million to HUF 22 million.

The government argues that the changes will make KATA available to a much wider group of small businesses while maintaining it as a relatively simple and predictable form of taxation.

The HUF 100,000 monthly rate represents a substantial nominal increase from the HUF 50,000 rate introduced when KATA was launched in 2013. However, the tax rate has not changed since then, while Hungary has experienced roughly 80% inflation over the period. In today’s money, the original HUF 50,000 would be worth around HUF 88,000–89,000.

Professional athletes to lose special EKHO allowance

The government will also change the rules for EKHO, or simplified contribution taxation. Under the current system, the general annual income limit for EKHO is HUF 60 million, but professional athletes have been allowed to use the preferential system on income of up to HUF 500 million.

That special limit will be abolished from 2027, Magyar said. Professional athletes will instead be subject to the same HUF 60 million annual limit as other professions eligible for EKHO.

Magyar said there was no justification for professional footballers earning HUF 10–20 million, and sometimes HUF 50 million, per month to have substantially different tax rules from journalists, actors or other professionals using EKHO.

The government said it supports Hungarian sport and wants to see successful Hungarian clubs and athletes, but intends to remove what it considers unjustified exceptions from the tax system.