It would be particularly interesting for performers to opt for EKHO-type contributions from September 1, the Ministry of Finance said on Tuesday. The government is also simplifying tax payment 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 EKHO will be abolished from September, the Ministry of Finance announced.
For those who are not eligible or cannot opt for the new detailed tax for small businesses (KATA for short in Hungarian), there are a number of advantageous tax options. For individual entrepreneurs, the flat rate tax can be an alternative, for companies, the business tax. And for artists, the more favorable rules mean that EKHO may be the better option. Last year, around 41,000 people paid EKHO, but this number could increase significantly from September, the prime minister wrote.
It was explained that from September 1, only 15% will have to be paid in the form of EKHO. Therefore, it is of interest to writers, journalists, performers, artists and people working in the professions who attend the shows (such as sound engineers, set designers, extras, make-up artists, costume designers) d 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 authorities in the same way as income from work. This means they don’t have to worry about paperwork, a burden taken away from them by the paying agents who provide the data,” they explained.
In view of the wartime economic situation, the government has also decided, as a measure of economic protection, that corporation tax may be paid in euros or US dollars.
Hungary’s corporate tax rate is the lowest in Europe (nine percent), which has contributed significantly to the growth of the Hungarian economy and continues to help protect the economy.
The Hungarian government decided to change the rules applicable to KATA taxpayers in July, in force since September 1, after the draft law revising the detailed tax for small businesses was approved by members of parliament. According to Erik Bánki, vice-president of the Fidesz parliamentary group and president 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 individuals.
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