Hungarian Wealth Tax from 2027? What Turkish Entrepreneurs with Interests in Hungary Should Consider

The Hungarian Government has announced plans to introduce a new wealth tax from 1 January 2027. Based on publicly reported proposals, the tax may apply to net wealth exceeding HUF 1 billion, with a higher rate potentially applicable to very substantial fortunes. While the final legislation has not yet been published, the announcement has already attracted attention among international investors and business owners with connections to Hungary.

For Turkish entrepreneurs, investors and families living in Hungary or holding investments in the country, the most important question may ultimately not be the headline tax rate. The decisive issue is likely to be the correct determination of tax residence, followed by the proper identification, allocation and valuation of assets across jurisdictions.

Tax Residence Comes First

In cross-border situations involving both Türkiye and Hungary, the analysis should begin with the individual’s tax residence under the applicable domestic legislation and any relevant double taxation treaty. The location of a particular company, property or bank account does not, by itself, determine the individual’s overall tax position.

This question may be particularly important for:

• Turkish business owners who spend significant time in both countries;
• shareholders and directors of Hungarian companies;
• investors holding Hungarian real estate;
• families with homes or significant personal ties in both Türkiye and Hungary;
• individuals managing businesses from Hungary while maintaining substantial economic interests in Türkiye.

Only after tax residence has been established on a sufficiently robust basis can the potential reach of a future Hungarian wealth tax be assessed. Residence facts should therefore be reviewed carefully and supported by consistent documentation.

A Critical Point: Double Taxation Treaties May Not Resolve the Issue

Turkish investors should not assume that the existence of a double taxation treaty will automatically protect them against a future Hungarian wealth tax.

As a matter of international tax treaty practice, taxes of this nature may fall outside the scope of double taxation agreements. Many treaties are primarily designed to allocate taxing rights over income, business profits, dividends, interest, royalties and capital gains. Whether a future Hungarian wealth tax is covered cannot be assumed and would require a separate legal analysis of the final Hungarian legislation and the precise wording of the applicable treaty.

This limitation makes the tax residence analysis even more important. If treaty protection is unavailable or incomplete, domestic residence rules and the territorial scope of the new tax may become decisive.

Cross-Border Asset Structures and Valuation

Even before the final rules are available, several practical issues can be identified. Particular attention may be required where wealth is held through:

• Hungarian companies and privately held corporate participations;
• family businesses;
• holding structures;
• Hungarian real estate investments;
• shareholder loans and related-party balances;
• multi-jurisdictional investment portfolios;
• trust, foundation or family wealth-planning arrangements.

In many cases, the valuation of privately held businesses and the legal allocation of ownership rights may prove more difficult than the calculation of the tax itself. Reliable valuation evidence and clear ownership documentation may therefore become essential.

Why Turkish Entrepreneurs Should Pay Particular Attention

Turkish entrepreneurs may operate Hungarian subsidiaries, manage local businesses, hold real estate or divide their personal and commercial lives between Türkiye and Hungary. These arrangements can create overlapping residence indicators, ownership questions and reporting obligations.

If the proposed wealth tax is enacted, affected individuals may need to review:

• their current tax residence position;
• the ownership chain of Hungarian and foreign assets;
• the valuation of private company interests;
• corporate governance and shareholder arrangements;
• family wealth and succession structures;
• documentation supporting residence, ownership, liabilities and valuation;
• potential Hungarian declaration and reporting obligations.

How NZP NAGY LEGAL Can Help

NZP NAGY LEGAL advises entrepreneurs, investors and families on complex cross-border tax and corporate matters involving Hungary and other jurisdictions. Our lawyers conduct detailed tax-law research, analyse developing legislation and prepare structured legal positions for advisory and contentious matters.

We also regularly represent clients before Hungarian and German tax courts. This litigation experience allows us to consider potential disputes at the outset, rather than only after a tax authority has challenged a residence position, valuation method or ownership analysis.

For Turkish entrepreneurs with interests in Hungary, our assistance may include:

• analysis and documentation of tax residence;
• review of ownership, corporate and holding structures;
• legal assessment of Hungarian company participations and investments;
• tax-law research concerning the emerging wealth-tax regime and treaty scope;
• coordination of cross-border legal and tax advice;
• preparation for possible declaration, valuation and documentation requirements;
• representation in tax-related administrative and court proceedings.

The Importance of Acting Early

The final scope of the proposed tax will depend on the enacted legislation. Nevertheless, Turkish entrepreneurs and investors with a Hungarian nexus can already review their residence facts, ownership records, corporate structures, liabilities and valuation documents.

For this group, the correct determination of tax residence is likely to form the foundation of any future wealth-tax analysis. Those who organise the relevant facts and evidence early will be better prepared to assess the new rules and defend their position if questions later arise.

Disclaimer: This article provides general information only and does not constitute individual legal or tax advice. The final Hungarian wealth-tax rules may differ from the publicly announced proposals. The application of any double taxation treaty must be assessed separately on the basis of its wording, the final legislation and the individual facts.