Debrecen4U October 7, 2026

No Individual Tax Benefit Granted to CATL by Municipality of Debrecen

Member of Parliament Zsolt Tárkányi published an excerpt on social media from a memorandum of understanding concluded between the Hungarian government and CATL in August 2022, listing potential forms of state support and tax benefits. In light of the information that has been published, the Municipality of Debrecen considers it necessary to clarify the information concerning the municipality contained in the statement in question.

The mention in the memorandum of understanding of the possibility of a local business tax benefit does not mean that Debrecen granted such a benefit. Neither the Municipality of Debrecen nor the city leadership made any statement during the investment negotiations or subsequently, concerning the provision of any tax benefit in relation to taxes falling within the municipality’s remit.

The current decree of the General Assembly of the Municipality of Debrecen on local taxes contains no provision for a tax reduction linked to innovation expenditure, either for CATL or for other businesses. The reference to a local business tax benefit related to innovation and other investments refers to a nationwide statutory option. Under this provision, a local authority may decide to introduce an investment-related tax benefit, but the General Assembly of Debrecen has not adopted such a regulation.

These benefits do exist as statutory options, but Debrecen has not introduced them. The rules currently in force support small and medium-sized enterprises by providing a tax exemption up to a tax base of HUF 2.5 million, while self-employed GPs are eligible for a 50 per cent tax benefit up to a tax base of HUF 40 million.

On this basis, the municipality has unequivocally granted neither CATL nor any other company carrying out a job-creating investment an individual local tax benefit, and does not intend to grant such a benefit in the future, either. Every bit of tax revenue received must serve the development of Debrecen and the well-being of its residents, as is expected in the case of every other investment. Between 2014 and 2025, the city’s local business tax revenue nearly quadrupled, increasing from HUF 10.7 billion to almost HUF 40 billion.

The only deduction that reduces the city’s local business tax revenue is the solidarity contribution introduced by the Orbán government and still maintained by the Tisza government. In 2026, the Municipality of Debrecen is required to pay HUF 12 billion in solidarity contributions, with the final instalment of approximately HUF 4.5 billion due by 15 October. At yesterday’s consultation between municipalities and the government, the Deputy State Secretary of the Ministry of Finance called for the final instalment for this year to be paid.

All of these revenues could serve the city’s development if they remained locally, while maintaining the solidarity contribution means that less of the revenue generated by the people of Debrecen is available for local development.

The city’s position that revenues generated here should remain here is not only the view of Debrecen’s leadership. At yesterday’s latest consultation of the Association of Cities with County Rights, the cities with county rights also called for a significant reduction in the solidarity contribution and proposed that in 2027 it should amount to no more than 15 per cent of the previous year’s local business tax revenue.

Source and photo credit: debrecen.hu