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The introduction of the global minimum tax (Global Anti-Base Erosion Rules – GloBE) marks a milestone in the history of international taxation. The regulation is part of the so-called Pillar II initiative developed by the OECD, which aims to limit tax avoidance opportunities for multinational enterprises and to ensure a fairer and more transparent allocation of taxation among different countries.
Key principle: A minimum effective corporate tax rate of 15% worldwide.
Target group: Multinational and domestic corporate groups with annual revenues exceeding EUR 750 million.
Effective date: January 1, 2024, in Hungary.
Regulatory background: OECD Pillar II – GloBE rules, EU directives.
Next deadline: Recording of tax liability by May 31, 2025.
The essence of the global minimum tax is that members of multinational corporate groups with consolidated revenues of at least EUR 750 million must pay an effective tax rate of at least 15% in every country where they operate. If the effective tax burden in a given country falls below this threshold, the difference must be paid in the form of a top-up tax.
Hungary – as a member of the European Union – introduced the global minimum tax rules as of January 1, 2024, in line with other member states. The first reporting obligation was due by December 31, 2024.
In the following sections, we will provide a detailed overview of the essence of the regulation, the specific features of its application in Hungary, the relevant deadlines, and the key actions that companies must take.
A central element of the regulation is the calculation of the Effective Tax Rate (ETR), which is determined as the ratio of covered taxes paid in a given country to the adjusted recognized profit:
If this value falls below 15%, the shortfall must be paid in the form of a Top-Up Tax, typically collected either by the jurisdiction of the parent entity or through a Qualified Domestic Minimum Top-Up Tax (QDMTT) integrated into the domestic tax system.
Income Inclusion Rule (IIR): The parent company, based in the headquarters jurisdiction, is required to pay the top-up tax if its subsidiaries are taxed at a low effective rate.
Undertaxed Payments Rule (UTPR): Group members operating in other countries may also tax the remaining shortfall if the parent company’s jurisdiction does not apply the IIR.
Qualified Domestic Minimum Top-Up Tax (QDMTT): A top-up tax incorporated into the domestic legislation, which takes precedence over the international top-up tax.
At the end of 2023, Hungary adopted the domestic implementation of the global minimum tax rules through Act LXXXIV of 2023. The Act entered into force on January 1, 2024, and applies to corporate groups that meet the EUR 750 million revenue threshold and whose Hungarian group members (subsidiaries, permanent establishments, etc.) do not reach the 15% effective tax rate.
In line with EU directives, Hungary introduced a system known as the Qualified Domestic Minimum Top-Up Tax (QDMTT). This means that the top-up tax is collected by the Hungarian state before it could be enforced by another country. This approach ensures that tax revenues remain domestic while also complying with international standards.
The Hungarian QDMTT is calculated primarily based on the Global Minimum Tax Act, which follows the GloBE standards. Since the data may be reviewed not only by the Hungarian Tax Authority (NAV) but also by other international authorities, maintaining precise and auditable records is essential.
The year 2025 will be a pivotal one for the practical application of the global minimum tax in Hungary, as it marks the first period when companies will face full compliance obligations.
Below, we summarize the most important milestones that domestic and international corporate groups must pay particular attention to.
May 31, 2025 – Submission of the annual report
November 20, 2025
The domestic group entity or the designated local entity acting on its behalf must determine, declare, and pay the advance payment of the Qualified Domestic Minimum Top-Up Tax (QDMTT) for the tax year by the 20th day of the eleventh month following the last day of the tax year.
June 30, 2026
Submission of the final top-up tax return and additional payment, if necessary.
Notification obligation
If the final top-up tax return is submitted by the ultimate parent entity, the domestic entity must notify the state tax authority of the identity and location of the filing entity.
Deadline
Within six months from the date of the filing.
In cases of violations related to the reporting and data provision obligations associated with the top-up taxes ensuring the global minimum tax level:
According to the Act on the Rules of Taxation (Art.), the following penalties may be imposed:
However, based on transitional provisions, for tax years beginning before December 31, 2026, no penalties may be imposed for failure to meet specified obligations related to top-up taxes if the group member acted as could reasonably be expected under the given circumstances.
The introduction of the global minimum tax not only creates a new tax payment obligation but also establishes a complex compliance system that requires significant administrative, legal, and financial preparations from corporate groups.
Although the global minimum tax regulations are strict, the GloBE system incorporates several exceptions and relief measures to avoid disproportionately burdening companies that have genuine economic substance in a given country.
Below, we present the most important exemption opportunities.
This exemption allows companies to deduct from the tax base those types of income that are backed by real economic activities.
The relief is based on two main factors:
This mechanism can help reduce or even eliminate the payable top-up tax in countries where the corporate group has genuine operational activities.
The GloBE framework also includes so-called Safe Harbour provisions, which offer temporary simplification measures. These include, for example:
CBCR Safe Harbour: If, based on Country-by-Country Reporting (CBCR), the Effective Tax Rate (ETR) in a given country is high (above 15%) or the income in that jurisdiction is low, the company may apply a simplified procedure and be exempt from detailed GloBE calculations. This relief can be applied during the first three years of implementation (2024–2026) and is worth considering in terms of compliance requirements.
It is therefore advisable to assess the applicability of substance-based exclusions and Safe Harbour options, and to support them with proper documentation and data—potentially even at audit level.
Given the complexity and international nature of the regulation, we recommend involving experts, particularly tax advisors, accountants, and auditors—in ensuring compliance with the Global Minimum Tax rules in Hungary.
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