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Number of KIVA businesses to rise over 50,000

The number of Hungarian businesses who have opted to pay the Small Business Tax (KIVA) will rise over 50,000 this year, based on applications filed by the end of 2019, state secretary for tax affairs Norbert Izer told state news wire MTI.

That number is up sharply from 6,500 five years earlier, Izer said.

Businesses that opt for KIVA pay a 12% rate - lowered from 13% last year - on a tax base of payroll expenditures plus dividends and capital transfers. KIVA businesses are exempt from the payroll tax, training tax, and corporate tax.

Budget revenue booked from KIVA last year now stands at HUF 70.5 billion, up from HUF 41.7 bln in 2018, Izer said.

More than 10,000 applications to switch over to KIVA were submitted last year. The phase-out of the Simplified Business Tax (EVA), as well as the reduced KIVA rate, may have contributed to the increase.