From 2021, the KATA form of taxation will be significantly tightened. The 40% tax burden will be expanded, and income from a principal exceeding HUF 3 million within a year will also be taxed at this rate. The aim is to avoid frauds, in particular, the elimination of hidden employment contracts from the system.
Under the legislation passed, a 40% tax will be levied on revenues that:
- Come from a domestic client within a year and exceed HUF 3 million in total. In this case, the Principal is obliged to deduct the tax and pay it instead of the KATA taxpayer. In order for the principal to be able to act correctly, the KATA taxpayer is obliged to provide a statement of his tax status.
- It comes from a foreign client within a year and exceeds HUF 3 million in total. In this case, the KATA taxpayer is obliged to declare and pay the tax.
- All payments made by affiliates under Corporate income tax law.
Based on the above, it may be necessary to rethink the tax liabilities expected in 2021. For these issues, please contact your dedicated accountant in our office, who will be happy to help you discuss the changes and suggest the optimal solution.
