Shortly after imposing a state of emergency over Russia’s war against Ukraine last week, the Hungarian government announced special taxes on large companies in a number of different industries, officially with the aim of financing Prime Minister Viktor Orbán’s flagship public utility cuts program and the development of the military.

The “extra profits taxes” are to be imposed for a period of two years (with possible extension not excluded) and will hit large corporations from a wide range of sectors. Combined with additional recently announced cuts in state expenditure, the government aims to use the extra state revenues to balance the budget and avoid a looming recession.

Aretera provides further insight into the introduction of Hungary’s new special tax regime, as well as its political, economic and business implications.