We give the best KATA Services
KATA is a tax scheme in Hungary suitable for self-employed individuals looking for an easy way to manage their tax obligations.
If you are interested, we will be very happy to:
- Provide further information about KATA
- Localize you (i.e. obtain local tax and social security number, help you to apply for a residence permit)
- Start your KATA enterprise
- Do the required bookkeeping, comply with local regulations
- Provide you with advice on how to optimize your business framework
KATA Information
Rejistration For KATA
KATA Business Support
KATA Invoice Management
KATA TAX Return
Yearly TAX declaration
TAX Open/start
KATA Pause
KATA Stop/Close
What is the KATA tax scheme?
KATA is a flat-tax system where you pay a fixed monthly amount to cover all your Hungarian tax obligations as a self-employed person.
As of 2020, the monthly amount is 50,000 HUF or 75,000 HUF depending on your needs, or if you already get paid at least 36 hours per week from a Hungarian employer on top of your self-employed work or a student, the amount is reduced to 25,000 HUF.
What does KATA tax cover?
This monthly payment covers all your obligations meaning you do not need to pay any extra personal income tax, pension or social security contributions.
There is, however, an income limit for this scheme. If you invoice more than 12,000,0000 HUF per year you must pay 40% on the extra income.
What about VAT on the KATA tax scheme?
You’ll be given a VAT number upon registration. You can opt to be exempt from charging VAT if you invoice less than 12,000,000 HUF per year. If and when you exceed this limit, VAT must be charged.
Regardless of exemption status, all foreign billings must be declared on a VAT declaration each month.
When and how does KATA tax get paid?
The monthly contribution must be paid by the 12th of the following month. Any extra tax due from exceeding the earnings limit must be paid by February 25th of the following tax year. The tax year in Hungary is January 1st to December 31st.
You can pay the KATA contribution by bank transfer.
Are there any special rules for the KATA tax scheme?
There is a list of 7 KATA requirements. 5 out of 7 of these requirements must be met (so if two are true, it is okay).
1. You do not exclusively run your business activities alone.
2. Your income from one client has to be less than 50% of your total income
3. The client cannot instruct the one using KATA with regards to how to execute the business activity.
4. The property where you run the business is in your possession or you have a letter from the owner allowing the address to be used as the seat of the business.
5. Your tools, devices for running the business are yours and in your possession.
6. Working hours are defined by you and not determined by the customer.
7. All invoices should not go to only one client.
Company Taxation in Hungary
As society has developed over history, tax became a constant part of that system. That is some annoying thing that is unavoidable on one side, however, on the other side, everybody tries to evade it somehow.
Numerous tricks and frameworks have been invented and applied in practice. Some of them are legal but some of them are not. This article focuses on a great and absolutely legal opportunity for those who really want to expand their tax possibilities.
– KATA – Start-up Friendly Taxation
Hungary is an EU member country in the heart of Europe. There is a great new taxation system introduced by the government 3 years ago, called KATA (it is an abbreviation, it may be translated to English like “Small Taxpayers’ Tax”).
It is a fixed amount of tax in every month that is independent of the actual income. The two great advantages of this system are fairness and simplicity.
What Enterprises Enter KATA System?
Hungarian private entrepreneurs E.V., Bt-s and Kkt-s (business associations) may apply the system.
Hungarian limited liability (KFT) and private or public limited companies may not apply this form of taxation.
Is There Any Limit for This Tax?
Well, according to the regulation, there is no limit, meaning, the system may be applied without any limitations and the taxpayer will not lose its status because of generating too much income.
However, there is an additional tax, which is 40%, above 12 million HUF (ca. 39.735,00-EUR) of income per year.
In practice, this greatly limits the whole application of the system.
When your company profit increases by approx. 40.000 Euro per year, KATA will lose its advantage.
How to Start a Hungarian Enterprise?
To start a Hungarian Bt. (Kkt. is not recommended as all the owners have unlimited financial liability) or private enterprise and register under the KATA system, you will need a Hungarian residence permit and a local social security number.
If you arrive outside of the EU (i.e. you have no EU citizenship), taking advantage of KATA may be tricky and difficult but not impossible.
For those who come from the EU, registering under KATA system is easier, since they can get a residence permit in a simplified process.
Contact
- Budapest, Mester u. 1, 1093, Hungary
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+36 3078 62686
- info@kataaccountant.hu katahelp.hu@gmail.com
Brochures
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