Below is a summary of the accounting law the main changes that from 1 January 2025 have entered into force. The changes aim to align with international standards and reduce the administrative burden.
Increase in audit thresholds
The number of companies subject to audit will be reduced, as in the future the threshold for net turnover is increased from HUF 300 million to HUF 600 million. Under the new legislation, an audit is not required if the following two conditions are met:
- the average of the entrepreneur's annual (annualised) income for the two financial years preceding the financial year net turnover did not exceed the HUF 600 million, and
- the average of the two financial years preceding the financial year in which the entrepreneur average number of persons employed did not exceed the 50 persons.
The increased audit threshold applies for the first time to audits of accounts for financial years starting in 2025, the earlier application of the higher threshold is not permitted by the Accounting Act.
If the average annual net turnover of a company did not exceed HUF 600 million in the two financial years preceding the financial year 2025 (i.e. the financial years 2023 and 2024) and the average number of employees did not exceed 50, the company is exempt from the obligation to audit the financial statements for the financial year 2025. If the company has appointed the auditor for several years but is no longer required to audit because of an increase in the audit threshold, the company may decide to terminate the auditor's appointment. Pursuant to Article 155/A (2) of the Accounting Act, the company must continue to notify the public audit oversight authority of the termination or resignation during the term of the audit engagement, stating the reason for the termination or resignation, which in this case is the change in the statutory audit threshold.
Increase in the threshold for the obligation to prepare consolidated accounts
The thresholds for preparing consolidated accounts are increased:
- a balance sheet total relevant threshold from HUF 6.000 million to HUF 10.000 million forintra is rising,
- the annual net turnover and the threshold for from HUF 12.000 million to HUF 20.000 million is rising.
In the financial year average number of employees the limit value for the number of 250 persons.
In determining the ratios, the aggregate data of the parent and its subsidiaries and jointly controlled entities (including those subject to § 119) before consolidation shall be taken into account. The data of the jointly controlled entity shall be included to the extent of the equity interest.
Increase in the threshold for the simplified annual accounts
The thresholds for choosing simplified annual accounts are increased:
- a balance sheet total relevant threshold from HUF 1.200 million to HUF 2.000 million forintra is rising,
- the annual net turnover and the threshold for from HUF 2.400 million to HUF 4.000 million is rising.
In the financial year average number of employees the limit value for the number of 50 persons.
Cost accounting rules
The increase in the threshold for simplified annual accounts also implies that the thresholds for the preparation of a cost accounting code are also increased, given that entrepreneurs who prepare simplified accounts are not required to have a cost accounting policy.
Art. 14 (7) If the net turnover of sales less the purchase value of goods sold and the value of services rendered exceeds HUF 4 billion in a financial year or the total amount of costs by cost element exceeds HUF 2 billion, the cost price of goods produced and services rendered pursuant to Article 51 shall be determined by the method of post-calculation in accordance with the internal rules on the calculation of cost price as of the following year. The contractor shall not be exempt from this obligation in the future, even if the conditions are met again.
Changes concerning the additional annex
For businesses From 2025, they will not have to present in the supplementary annex the person carrying out a charitable activity cash and in-kind contributions provided to an NGO without compensation during the financial year. The amendment aims to reduce the administrative burden on companies.
Non-disclosure
If the contractor has failed to comply with any deposit and disclosure obligations under the Statute, a third party may also initiate a review procedure before the court. This applies to the accounts, the sustainability report, the report on corporate tax information, the report on amounts paid to governments and the auditor's report, so it will be particularly important to meet the deadlines.
Choice of auditor
An additional provision has also been introduced in the Accounting Act in relation to the choice of auditor, according to which any contractual provision or other legal declaration relating to an entrepreneur which obliges the supreme body to choose a specific auditor, audit firm or group of audit firms for the appointment of the activity falling within the scope of the audit obligation is null and void.
Corporate tax information report (CBCR)
According to the Accounting Act, the report containing corporate tax information and, where applicable, a declaration that the report is incomplete must also be published on the entrepreneur's website. The law states that the report and the declaration must remain available on the relevant website for at least five consecutive years. Not a change for 2025, but these provisions were first introduced in the Applies to financial years starting on or after 22 June 2024, so it really becomes topical now.
A reminder of the previous accounting law changes that will apply from 2024 here find our summary.
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More information about Moore Hungary and its services is available on the consultant's website: www.mooreglobal.hu
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