IMPLEMENTATION OF TEÁOR’25 CLASSIFICATION SYSTEM BECAME EFFECTIVE ON JANUARY 1, 2025
Overview
As of January 1, 2025, Hungary has implemented the TEÁOR’25 classification system, replacing the TEÁOR’08 framework that had been in place since 2008. This transition stems from the European Commission's Delegated Regulation 2023/137 (EU), which introduced amendments to the NACE classification system (NACE Rev. 2.1.), the foundational framework for TEÁOR.
Key Updates and Implications
The adoption of TEÁOR’25 extends beyond activity classification, necessitating updates to associated systems, including the Register of Independent Entrepreneurial Activities (Hungarian acronym: ÖVTJ) and the Classification System of Products and Services (Hungarian acronym: TESZOR). These revisions aim to ensure consistency across regulatory and economic reporting standards.
To assist stakeholders in navigating the transition, Eurostat has developed a conversion table to map TEÁOR’08 codes to their TEÁOR’25 equivalents. While a majority of the 4-digit codes will align directly with their updated counterparts, approximately twenty percent (20%) of the prior codes will be split into multiple new codes. This segmentation may preclude straightforward one-to-one mapping for certain activities, necessitating a tailored approach to ensure compliance and accurate classification.
Process for Activity Code Conversion
The Hungarian Central Statistical Office (Hungarian acronym: KSH) will oversee the automatic assignment of new primary activity codes to all organizations as part of the transition to the TEÁOR’25 system. This automatic process applies regardless of whether the previous code is directly transferable or subject to division into multiple codes. Updated primary activity codes will also be communicated to relevant registry authorities to ensure that, effective January 31, 2025, all official registers reflect classifications in compliance with TEÁOR’25.
For secondary or additional activities, the Hungarian tax authority will reclassify activities that can be clearly matched under the new system by January 31, 2025. However, where previous TEÁOR’08 codes are divided into multiple TEÁOR’25 codes, automatic reclassification will not occur. In such instances, organizations are required to proactively report and update their activity codes no later than July 1, 2025.
Failure to update these activities will result in the closure of any unresolved TEÁOR’08 codes. Specifically, by August 31, 2025, all unconverted TEÁOR’08 codes will be officially deactivated retroactively, effective as of December 31, 2024.
Key Action Items for Organizations
- Review the new TEÁOR’25 classification framework and identify impacted activity codes.
- Confirm the automatic reclassification of primary activity codes and verify updates in relevant registries.
- Address any non-automatically converted secondary activity codes before the July 1, 2025, deadline to avoid retroactive closure.
Corporate Law Obligations Under TEÁOR’25
Organizations are required to update their founding documents to reflect the new main activity code only when filing changes to their details in the company register. Updates to additional activity codes beyond the main activity are generally necessary only when amendments to the founding document are undertaken for other purposes.
If a founding document is amended solely to comply with the requirements of TEÁOR’25, the application for registration of such changes may be submitted without incurring registration fees or publication costs.
Practical Considerations and Next Steps for Businesses
Organizations must ensure their registered activities are fully reconciled with the new TEÁOR’25 classification system. While the implementation of TEÁOR’25 does not require a standalone registration process, any omissions in activity updates must be rectified during the next registration procedure that involves other corporate changes.
Businesses operating in Hungary should review their current activity classifications and prepare for necessary updates to align with the TEÁOR’25 framework. Particular attention should be given to any codes impacted by the segmentation to avoid misclassification risks. Coordination with legal counsel or regulatory experts may be prudent to ensure a seamless transition.
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If you have any further questions, please feel free to contact us and request the assistance of KNP LAW experts.[1]
[1] Disclaimer
The contents of this document are for informational purposes only and do not constitute legal advice. Readers are encouraged to seek expert consultation to address specific circumstances or legal requirements related to the TEÁOR’25 classification system or other regulatory obligations.
