The Government Decree No. 314/2025 (X.17.) has entered into force, introducing several amendments to the system of VIP Cash Subsidies. The changes affect the eligibility conditions for research and development (R&D) projects, the subsidisation of energy investments, and introduce the Clean Industrial State Aid Framework (CISAF), replacing the former TCTF scheme. Our detailed article on the CISAF can be found here.

 

For incentive applications submitted after the entry into force of the amendment, contractual R&D costs incurred in cooperation with higher education or healthcare institutions may account for up to 75% of the eligible cost (previously 50%).

It is clarified that the combined amount of contractual R&D costs with business partners and the contractual R&D costs with higher education, healthcare may not exceed 75% of the total eligible cost. This ensures that own activities must continue to represent at least 25% of the eligible cost.

 

a) Asset-based projects including renewable energy producing equipment: The costs of equipment related to renewable energy production are no longer eligible as standalone items under traditional asset-based projects.

b) Supplementary (renewable energy production) investments: The subsidy per project and per investor may not exceed EUR 30 million. Renewable energy generation units (including hydrogen production) are not eligible on a standalone basis and may only be subsidised together with energy storage systems. However, energy storage projects can be supported independently.

c) Profit-based VIP Cash subsidy: In profit-based schemes, a technical clarification was introduced – if a beneficiary requests a higher drawdown than scheduled in a given year, the excess amount may be claimed against the next year’s allocation. The amendment also applies to ongoing cases.

d) Training incentive: A relaxation has been introduced – beneficiaries may still qualify for a subsidy even if they did not meet the criteria of maintaining sound labor relations in the past two years, as this requirement has been repealed. The amendment also applies to ongoing cases.
 

The Decree introduces the Clean Industrial State Aid Framework (CISAF), which enters into force with the approval of the European Commission and will replace the TCTF as of 1 January 2026. The CISAF aims to support projects contributing to decarbonisation, clean industrial transition, and energy security. Its implementation within the Hungarian VIP Cash Subsidy system incorporates several mechanisms previously used under the TCTF regime.

a) Fundamental conditions:
- Subsidies may only be granted if it can be demonstrated that, without the incentive, the project would take place outside the EEA. This verification is not required for projects receiving a “sovereignty seal” from the Innovation Fund.
- Subsidies may be granted throughout Hungary, including Budapest.
- Incentive decisions may be issued until 31 December 2030.

b) Eligible activities:
Establishment of production capacity in sectors such as solar, wind, hydrogen, battery technologies, heat pumps, geothermal, biogas, CCS technologies, energy efficiency and grid development, alternative fuels, biotechnology, decarbonisation technologies, electric drive systems, and nuclear technologies.

c) Eligible costs:
They are identical to the rules applicable for asset-based incentives (e.g., land, construction, production assets, intangible assets, etc.). For SMEs, used assets are also eligible.

d) Subsidy intensity and maximum amounts:
- Budapest: 15%, up to EUR 150 million
- Other regions: 35%, up to EUR 350 million
- SME bonus: +10–20 percentage points (depending on company size)

The subsidy can be combined with other incentives but must not exceed the maximum permitted aid intensity.

e) Administrative requirements:
Counterfactual analysis, demonstration of funding gap, and submission of an alternative offer from outside the EEA.



4. SUMMARY

The amendments to the Decree have substantial practical implications. The CISAF opens up new opportunities but requires careful strategic consideration from investors to determine which projects may benefit more from the CISAF schemes compared to traditional asset-based incentives.

For further information, please do not hesitate to contact us.