fbpx
Business infrastructure

The Hungarian tax system is SME friendly

“It is worth doing business in Hungary as the tax system supports small and medium-sized enterprises,” said Norbert Izer, a state secretary at the ministry of finance.

The Hungarian government is supporting SMEs through tax cuts and from budgetary and European Union resources, and tax discounts for small and medium entrepreneurships grow year-on-year.

Norbert Izer, a state secretary at the ministry of finance, said the tax system also offers specific tax types, tax cuts and eases the administrative burden on SMEs.

From January 2020, the Small Business Tax (KIVA) is cut to 12 percent from 13 percent, making it one of the most competitive rates in the European Union. Nearly 50,000 entrepreneurs pay KIVA. 

The revenue limit for users of the Itemized Tax for Small Businesses (KATA) was raised to HUF 12 million (EUR 36,100) annually from HUF 6 million in January 2017, which resulted in the tripling of the number of users choosing this tax form to 377,000.

Izer said Hungary also introduced the lowest corporate tax rate in Europe, 9 percent, from 2017. Some 723,000 firms with annual revenue below HUF 12 million are exempt from paying VAT, he said.

In the 2014-2020 funding period, the government ploughed 60 percent of EU funding into economic development, Izer said. Its development and innovation program has supported some 19,000 SMEs with HUF 974 billion.

Show More

Related Articles

Back to top button
Close