Executive summary

Hungarian entities subject to the Pillar Two regulations are now required to submit an advance qualified domestic minimum top-up tax (QDMTT) return and make the corresponding payment to the Hungarian Tax Authority. The advance return and payment must be completed by the 20th day of the 11th month following the end of the relevant tax year, i.e. 20 November 2025 for calendar-year 2024 taxpayers.

Careful preparation for the approaching compliance obligation is recommended as the QDMTT advance return must be filed even if no top-up tax liability arises or if the Transitional Country-by-Country Reporting (CbCR) Safe Harbor are applied. The Hungarian Tax Authority has not yet published the official QDMTT advance filing form.

Background

Under the Hungarian Pillar Two legislation, in-scope corporate taxpayers are required to submit an advance QDMTT return and make the corresponding payment to the Hungarian Tax Authority for tax years beginning on or after 1 January 2024.

Scope

The advance payment must reflect the full estimated QDMTT liability for the relevant tax year.

Importantly, the advance filing obligation also extends to taxpayers who qualify under the transitional safe harbor rules. In line with the Hungarian Tax Authority's general approach, it is anticipated that a return will be required even if no QDMTT liability is expected.

Entities within the same multinational entity (MNE) group may elect to jointly designate a single Hungarian tax-resident entity to fulfill the QDMTT administrative obligations on behalf of all Hungarian constituent entities, meaning a single Hungarian constituent entity may file on behalf of all local group members.

Deadline and submission

The QDMTT advance return and payment must be completed by the 20th day of the 11th month following the end of the relevant tax year. For calendar-year 2024 taxpayers, this corresponds to 20 November 2025.

The official form for the advance return will be made available on the Hungarian Tax Authority's website and must be submitted electronically.

Penalty

The advance payment must cover the entire estimated QDMTT liability for the current tax year. If the final QDMTT liability is higher than the advance payment made, the taxpayer must provide a reasonable explanation for the difference to avoid penalties.

Failure to file a QDMTT advance return (and pay the QDMTT liability, if any) may result in a default penalty of up to 10 million Hungarian Forint (HUF10m; approximately US$30k) per Hungarian constituent entity.

Constituent entities may be exempt from the penalties described above if they can demonstrate that they acted as could reasonably be expected under the circumstances. However, the practical application of this exemption remains uncertain — particularly if financial figures have already been finalized.

Next steps

To ensure timely and accurate compliance with the new QDMTT obligations, affected entities should begin the QDMTT calculation process in accordance with Hungarian generally accepted accounting principles (GAAP), ensuring that all applicable covered taxes are properly identified and recorded.

The final version of the QDMTT advance return form, in editable format, is expected to be released by end of October 2025.