It would be particularly worthwhile for performers to opt for the EKHO type contributions from September 1st, the Finance Ministry said on Tuesday. The government is also simplifying tax payments for companies due to the war economy, as they can pay corporate tax not only in forints but also in dollars or euros, they added.
The rate of the simplified public tax contribution (EKHO) will be reduced by 13 percentage points, as the so-called payer’s EKHO will be abolished from September, the Finance Ministry announced.
For those who do not qualify for or cannot opt for the new Itemized Tax for Small Businesses (KATA for short in Hungarian), there are a number of favorable tax options available. For sole proprietors, the flat-rate tax may be an alternative, for companies, the small business tax. And for artists, the more favorable rules mean that EKHO may be the best option. Last year, around 41,000 people paid EKHO, but this number could rise significantly from September, the PM wrote.
It was explained that from September 1st, only 15 percent will have to be payable in the form of the EKHO. Therefore, it is worthwhile for writers, journalists, performers, artists, and people working in the professions that assist in performances (such as sound engineers, set designers, extras, make-up artists, costume designers) to opt for this tax form.
Not only is the tax burden low, but so is the administration. The income of the persons concerned is included in the draft tax return drawn up by the tax office in the same way as income from employment. This means that they do not have to bother with paperwork, a burden that is taken off their shoulders by the paying agents providing the data,” they explained.
In view of the wartime economic situation, the government has also decided, as an economic protection measure, that corporate tax can be paid in euros or US dollars.
The Hungarian corporate tax rate is the lowest in Europe (nine percent), which has contributed significantly to the growth of the Hungarian economy and continues to contribute to the protection of the economy.
The Hungarian government decided to change the rules applying to KATA tax payers in July, in effect from September 1st, after the bill to revise the Itemized Tax for Small Businesses was approved by deputies in parliament. According to Erik Bánki, deputy chairman of the Fidesz parliamentary group and chairman of the economic committee, the government has returned to the starting point and the intention for which the tax was created, namely to create a low tax, a low administrative burden, and a reasonable form of taxation for individual entrepreneurs who provide services to the public or sell products to private individuals.
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