On 19 June 2025, amendments to certain tax legislation were published in the Hungarian National Gazette. These amendments, passed by the Hungarian Parliament a week earlier, extend the application of the so-called windfall taxes, including the Extra Profit Tax or Supplemental Insurance Premium Tax (EPTIPT), for an additional year. Originally introduced as a temporary measure to address increased fiscal pressure stemming from the war in Ukraine, the EPTIPT was enacted via Government Decree (197/2022) for an initial period of 1.5 years. This period was subsequently extended through 2024, 2025 with new Decrees and now once again extended through 2026 with the published Act.
The newly adopted legislation consolidates the original Decrees and its five subsequent amendments into a formal Act, integrating the provisions for 2025 and 2026 into Act No. 102 of 2012 on Insurance Premium Tax (hereinafter referred to as the IPT Law).
Based on the enacted amendments, the EPTIPT is expected to be phased out by 2027. (The last year is planned to be 2026.) No significant changes have been made to the tax structure, meaning that the current rates and thresholds remain in effect:
A) Non-life insurance policies:
- 3% on the portion of the tax base up to HUF 48 billion
- 14% on the portion exceeding HUF 48 billion
B) Life insurance policies:
- 2% on the portion of the tax base up to HUF 48 billion
- 6% on the portion exceeding HUF 48 billion
The rules governing prepayments (PP) also remain unchanged. The only notable amendment involves minor adjustments to the calculation of the applicable reduction for EPTIPT, specifically:
a) the growth in the nominal value of government securities has been increased from 30% to 60%, with 60% reduction applicable for the 2026 tax year,
b) the reference period for assessing the increase has been slightly shifted from August-October 2024 to September-November 2025 for the 2026 application, and
c) the maturity threshold for the relevant Hungarian Government Bonds, which are denominated in forints and issued via auction, has been extended from beyond 1 January 2030 to beyond 1 January 2031 for the 2026 period.
Furthermore, the provisions for IPT introduced by Government Decree 52/2024, effective as of April 2024, have been incorporated into the IPT Law. These provisions include:
a) An increase in the IPT threshold for the application of the sliding scale regime from HUF 8 billion to HUF 20 billion.
b) Revisions to the IPT rate brackets, resulting in the following applicable IPT rates:
Ø 25% of the standard IPT rate (10%/15%) for taxable premiums up to HUF 250 million (previously HUF 100 million), resulting in an effective IPT rate of 2.5% / 3.75%.
Ø 50% of the standard IPT rate for taxable premiums between HUF 250 million and HUF 1.75 billion (previously HUF 100 million to HUF 700 million), resulting in an effective IPT rate of 5% / 7.5%.
Ø 100% of the standard IPT rate for taxable premiums exceeding HUF 1.75 billion (previously HUF 700 million), corresponding to the full standard IPT rates of 10% / 15%.
Simultaneously, Government Decrees of 197/2022 and 52/2024 have been repealed. The new rules entered into force on the day following their publication, i.e., 20 June 2025.
