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Group corporate tax liability in Hungary - practical questions

An important deadline is approaching for companies wishing to decide upon the creation of a corporate tax group for tax year 2023.
Mátè Nagy
Junior accountant
László Hosszú
Hungary Country Manager

From 2019, the Act on Corporate Tax (TAO Act) provides the possibility for at least two taxpayers to establish a group corporate tax subject if certain conditions are met.

Who can establish group taxation?

A corporate tax group can be established by (with the exception of non-profit business companies and certain specific forms of cooperatives) essentially all business companies, associations, European joint-stock companies, cooperatives who qualify as:

  • there is a business relationship based on at least 75% voting rights between the individual taxpayers, directly or indirectly, and
  • their balance sheet dates are the same, their reports and accounting closings are prepared based on the same accounting standards.

A minimum of two taxpayers are required to create a group corporate tax subject. There is no further limitation as to the number of members.


The deadline for submitting the application is the period from the 1st to the 20th day of November preceding the tax year.

If the application is submitted to the tax authority by November 20, 2022, and the members of the group meet all the conditions set out in the Tao Law, the tax authority will allow for the creation of a group taxable entity from January 1, 2023.

Why is it worth choosing group taxation?

Group taxation is beneficial for groups of companies where there are both loss-generating (with a negative tax base) and profitable (with a positive tax base) businesses. The negative tax base of a group member, or group members with a negative tax base can - within the framework defined by law - reduce the corporate tax base at the group level, as a result of which the tax base of the tax payable for individual group members with a positive tax base is also reduced.

It is important to emphasize that the group tax base can be reduced by the sum of the individual negative tax bases of the group members, i.e., the deferred loss of the group already in the resulting tax year.

When using the tax benefits, the group is considered as a single taxable person, so it is sufficient if one group member can fulfill the conditions related to the benefit.

It is not necessary to prepare a transfer price register for transactions between members, and it is not mandatory to apply a transfer price correction, thereby reducing the level of administrative and related costs. All in all, companies can achieve significant cost and tax savings by choosing group taxation.

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