KATA (flat-rate tax for small taxpayers)
KATA is Hungary's flat-rate tax for small taxpayers, a fixed monthly tax that can only be chosen under stricter conditions since 1 September 2022.
Updated:
What does KATA mean?
Under the 2022 rules a KATA business may earn revenue from private individuals. According to NAV, if it earns revenue from a business payer, its KATA status ends on the day before. The revenue limit is HUF 18 million a year, HUF 1.5 million per month pro rata.
Check the monthly tax amount and the exact conditions on NAV's site, and decide on any switch with an accountant; this page is not tax advice.
Why does it matter to a small business?
The form of taxation decides not only how much tax you pay but also whom you can invoice and what to watch during the year. The KATA rules changed considerably in 2022, so many old descriptions that no longer apply are still online. Before you accept a new job or change your form, read NAV's current guidance and check with your accountant.
What does it look like in practice?
Details
Suppose a nail technician in Debrecen works as a KATA business, serving private clients. A local company asks whether she could invoice it for a team day. Before saying yes she calls her accountant, because according to NAV revenue from a company affects KATA status. In the CRM it is clear which customer is a private person and which is a company, so the question comes up before the quote does.
Where to read on
A CRM for small businesses in Hungary
HelloCRM is an online CRM made in Hungary for small and mid-sized businesses there, in Hungarian and English: the core CRM is free for good, with no time limit and no card, and it can be tried without signing up in a demo company full of example data.
Questions
What is KATA, in one sentence?
KATA is Hungary's flat-rate tax for small taxpayers, a fixed monthly tax that can only be chosen under stricter conditions since 1 September 2022.
Sources
This is general information, not legal or tax advice. The rules come from: NAV: Az új katával kapcsolatos gyakran ismételt kérdések (checked )