Local business tax deadlines for new businesses

Last updated on March 6, 2026.

How does local business tax work in Hungary?

Local business tax (also called HIPA in Hungarian for “Helyi Iparűzési Adó”) is a tax every business must pay to the local municipality where its registered seat is located. It is calculated based on your yearly revenue, and it can be 2% at most. The rate depends on the local municipality – check the regulations where your registered seat is located.

Normally, you pay an advance on the local business tax twice a year (15 March and 15 September), then adjust for the actual sum when you make your final report for the year (by 31 May of the following year). If you paid less, you pay the extra; if you paid more, you reclaim the surplus or leave it there for next year.

You must pay the local business tax directly to your local municipality, but report it to the Tax Authority.

Chance for no advance payment in the first year

Since in your first year of business there is no previous year based on which the advance payment could be calculated, in many municipalities you simply do not have to make an advance payment just then. In fact, you might not need to make an advance payment until your first report is due (this is sometimes phrased as “throughout the first advance payment period”, because the advance payments periods are considered 1 July – 30 June next year).

You probably received a letter from the municipality about this. You can most probably check your payment obligation online.

• If your seat is in Budapest, you can do it here.
• If you cannot seem to find the page of your local municipality, you can try the centralized portal here.

For example, if you started self-employment under flat-rate taxation last September, alongside many others, you have not had to worry about the local business tax so far. The first deadline relevant to you will be either 15 March or 31 May.

15 March 2026

Whether you need to make an advance payment now depends on the local regulations at your municipality (see above). Again, try and check your payment obligation online. Even though you have not yet filed a report for your 2025 HIPA, there is communication between your local municipality and the Tax Authority, so the municipality will know how much you invoiced, and can levy the tax.

31 May 2026

By this date, you must make various decisions regarding the local business tax. Most importantly, you must

• Report HIPA for 2025
• Pay HIPA for 2025
• Decide if you want to pay HIPA in 2025 and 2026 in a tier system
  • If you choose the tier system, pay the HIPA for both 2025 and 2026

If you choose to pay HIPA regularly, you make 2 advance payments and one adjustment each year. If you choose to pay HIPA based on the tier system, you make only one payment every year, and do not even have to make a yearly report unless you switch tiers.

Before you decide whether you want to pay HIPA according to the tier system or regularly, make sure you check

• your actual tax base,
• the tax rate at your local municipality,
• available benefits and exemptions at your local municipality.

For example, in Budapest, the local business tax is 2% of the tax base. However, if your tax base is below HUF 1.5 million, you do not have to pay HIPA at all.

1. Regular calculation for the local business tax base for flat-rate taxpayers:

For flat-rate taxpayers, the HIPA tax base is the same as their flat-rate tax base.

• Either 120% of your income (meaning 72% of your revenue if you use the 40% expense rate)
• Or, if your yearly revenue is below HUF 8 million (or its appropriate proportion if you started your operation later in the year), 80% of your income, that is, 48% of your revenue (this option is only available for 2022, and not from 2023 on)

2. Tier based, or simplified calculation of the local business tax

Available to small tax-payers with a yearly revenue under HUF 25 million, or HUF 120 million if they are a retailer applying flat-rate taxation.

15 September 2026

If you choose the regular HIPA calculation, you make your probably first and only advance payment for 2026 now. The tax will be calculated proportionately based on your 2025 yearly report (submitted in May 2026).

15 March 2027

If you choose regular HIPA calculation, you make your first advance payment for 2027 now. The tax will be 50% of the tax calculated in your 2025 yearly report (submitted in May 2026).

31 May 2027

Just like in the previous year: this is your deadline to

• Report HIPA for 2026
• Pay HIPA for 2026, meaning adjustment in light of the advance payments you made throughout 2026
• Decide if you want to pay HIPA in 2027 in a tier system
  • If you choose the tier system, pay the HIPA for 2027

15 September 2027

If you choose the regular HIPA calculation, you make your second advance payment for 2027 now. The tax will be the difference of the tax calculated in your 2026 report (submitted in May 2027) and the tax paid in by 15 March 2027.

15 March 2028

If you choose regular HIPA calculation, you make your first advance payment for 2028 now. The tax will be 50% of the tax calculated in your 2026 yearly report (submitted in May 2027).

31 May 2028

Just like in the previous year: this is your deadline to

• Report HIPA for 2027
• Pay HIPA for 2027, meaning adjustment in light of the advance payments you made throughout 2027
• Decide if you want to pay HIPA in 2028 in a tier system
  • If you choose the tier system, pay the HIPA for 2028

Local business tax: shifted calculation

What makes calculating the local business tax seem complicated is that unless you choose the simplified payment option in the tier system, calculation is shifted. Every year there are two deadlines for advance payment, on 15 March and 15 September. Neither payment is calculated based on your income in the given year, however.

• The advance payable by 15 March is calculated based on the report of two years before.
• The advance payable by 15 September is calculated based on the report of the previous year.

Helpers Finance at your service

The Helpers Team provides administrative assistance to foreigners moving to Hungary since 2005. Beside accountancy, this includes company formation and residency application, as well as several other services. While the main focus of Helpers Finance is working with small and medium-sized companies, we do our best to make life easier to everyone doing business in Hungary.

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