On 1 January 2025, inter alia, an amendment to the Personal Income Tax Act relating to intellectual property (IP) contribution entered into force.

The AI Act introduces a comprehensive legal framework for companies dealing with AI systems in the EU. From 2 February 2025, companies subject to the regulation must take steps to ensure AI literacy and ensure that no prohibited AI practices are used. Non-compliance could lead to substantial fines.

Cytowski & Partners has advised Hungary-based Axoflow on its USD 7 million seed series with the participation of the EBRD, Credo Ventures, and E2.VC. Dentons reportedly advised the EBRD.

Former Indotek Group Senior M&A Legal Counsel Laszlo Palocz has returned to Kinstellar, joining the firm’s Budapest office as Counsel.

As part of the fall tax package, the Hungarian Government proposed an automatic, inflation-tracking increase of tax on, inter alia, energy products as of 2025. The actual increase from 1 January 2025, however, significantly exceeds the current (and expected) inflation levels. This might concurrently lead to increased inflation again.

In The Debrief, our Practice Leaders across CEE share updates on recent and upcoming legislation, consider the impact of recent court decisions, showcase landmark projects, and keep our readers apprised of the latest developments impacting their respective practice areas.

In The Corner Office, we ask Managing Partners at law firms across Central and Eastern Europe about their backgrounds, strategies, and responsibilities. This time around we turn our attention to setting up new practices and ask: When launching a new practice, what is your go-to strategy – do you look at internal team members to spearhead it, or are you more likely to turn to lateral hires? Why?

According to the National Employment Service’s study on foreign workers, at the end of 2023, there were a total of 87,661 work permits in force, a figure that has increased significantly in the last two years, with only 34,000 valid permits at the end of 2021 and slightly more than 51,000 in 2022.

Dalma Ordogh has joined KPMG Legal Hungary as a Director.

Based on the 2017 Central Budget Act, the financial system of the local governments was supplemented by a new source: the solidarity contribution, which is paid to the central budget by a proportion of municipalities with a high per capita tax burden and is aimed at improving equal opportunities.

The new Hungarian Architecture Act stipulates that areas designated as green zones, agricultural zones or forest zones cannot be selected as new development zones or special non-development zones.

Eniko Uveges has been promoted to Lead Legal Counsel at Grundfos.

In 2023, Hungary introduced the Extended Producer Responsibility (EPR) system, which places the financial responsibility for the waste management of circular products on producers.

By passing the proposed bill on 25 November 2024, the Hungarian Government enacted significant changes to the taxation of company vehicles, set to take effect in 2025 and beyond. These modifications aim to increase tax revenues and promote the adoption of environmentally friendly vehicles.

The amendment package includes several minor amendments to help interpreting the text of the Hungarian ESG Act, and the provisions of the ESG Act have been brought into line with the content of the regulations supplementing the provisions of the ESG Act in several places. The amendments entered into force on 19 January 2025.

Several amendments to pharmaceutical promotional laws in Hungary came into effect on 1 January 2025, with others following on 1 February 2025. Some of these amendments have long been urged by the pharmaceutical industry.

Dentons has advised Photoneo on the sale of its business to the Chicago-based Zebra Technologies. A&O Shearman's London office reportedly advised Zebra.

CMS has advised K&H Bank on the refinancing of the solar portfolio consisting of Obton Group PV plants situated on 15 different locations across Hungary, with a total installed DC capacity of 71.107 megawatts. Forgo, Damjanovic & Partners reportedly advised Obton Group.