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About 60,0000 companies register for small business taxes

About 60,000 Hungarian companies have registered for two new small business taxes that came into force at the start of this year, the National Economy Ministry said on Wednesday.

Hungary introduced an itemized tax for small tax-payers, known by its Hungarian acronym "kata" and a small business tax with the acronym "kiva" on January 1, 2013. The ministry said about 51,000 companies had registered for kata and almost 10,000 for kiva.

Sole proprietorships and microbusinesses with annual revenue up to HUF 6 million may opt to pay kata: a monthly HUF 50,000 for taxpayers whose business is their main source of income and HUF 25,000 for whom it is not. Revenue over HUF 6 million is taxed at a rate of 40%. If annual revenue of more than HUF 1 million comes from a single business partner, the kata-payer must prove the parties are not concealing an employer-employee relationship off the books. Taxpayers may switch over to kata during any month of the year.

Companies with annual revenue and total assets up to HUF 500 million as well as no fewer than 25 employees may opt to pay kiva: 16% of positive cash flow and payroll costs. The switchover to kiva may take place just once a year.