Budapest Tightens Film Incentive Rules While Keeping Hollywood Appeal

Hungary is consolidating its position as a leading European film location by realigning its funding system. From 2026, stricter caps and registration rules will come into force to ensure the long-term stability and predictability of the industry. While the core of the successful model – the 30 percent tax break – will remain in place, legislators are focusing on greater efficiency.

The backbone of indirect film funding in Hungary is the so-called trust account. Based on a regulation published in the Hungarian Official Gazette (Magyar Közlöny), the annual budget for this account has been set at 70 billion forints (182 million euros) for 2026.

This sum represents an adjustment to market realities. Although it is above the original budget estimate of 63 billion forints (164 million euros), it marks a decline compared to the record budget of 81 billion forints (210 million euros) in 2025. As the tax consulting firm Andersen explains in an analysis, this account serves as direct coverage for the 30 percent tax credit that producers can claim on their production costs incurred in Hungary.

To prevent the system from becoming overloaded, the National Film Office is introducing stricter registration limits.

A limit of 140 billion forints (364 million euros) has been set for the first half of 2026. Of this, 21 billion forints (55 million euros) are reserved exclusively for productions with Hungarian participation.

Photo: Péter Lakatos/MTI

As applications are processed on a first-come, first-served basis, the industry expects capacity to be quickly exhausted at the beginning of the year. However, reaching the limit does not mean definitive rejection; projects can be postponed to the following period, provided that the new framework planned for mid-2026 allows this, as reported by magyar.film.hu.

A key objective of the reform is to prevent funding from being blocked by projects that are ultimately not realized.

The rules of procedure have been tightened so that filming must begin within a specified period after the funding commitment has been received. Otherwise, the entitlement may be withdrawn. This measure is intended to ensure that only financially sound and precisely timed productions are given preference.

Photo: Zoltán Máthé/MTI

Despite the stricter rules, international competitiveness remains unaffected. The 30 percent tax break has been approved by the EU until at least the end of the decade and remains at the top of the European rankings.

The government representative for the film industry, Csaba Káel, previously emphasized the importance of this system to Világgazdaság. He said it was largely responsible for Hungary becoming the second most important center for film production in Europe after London. The new rules are intended to secure this status by making the sector more transparent and sustainable, while maintaining the economic and employment leverage of the film industry.

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