{"id":345,"date":"2017-03-31T18:44:34","date_gmt":"2017-03-31T16:44:34","guid":{"rendered":"http:\/\/www.whisperingtree.hu\/blog\/?p=345"},"modified":"2017-05-11T14:06:06","modified_gmt":"2017-05-11T12:06:06","slug":"how-to-save-a-lot-of-tax-legally","status":"publish","type":"post","link":"https:\/\/www.whisperingtree.hu\/blog\/how-to-save-a-lot-of-tax-legally\/","title":{"rendered":"How to save a lot of tax legally?"},"content":{"rendered":"

Introduction<\/h2>\n

As society has developed over history, tax became a constant part of that system. That is some annoying thing that is unavoidable on one side, however, on the other side, everybody tries to evade it somehow.<\/p>\n

Numerous tricks and frameworks have been invented and applied in practice. Some of them are legal but some of them are not. This article focuses on a great and absolutely legal opportunity<\/strong> for those who really want to expand their tax possibilities.<\/p>\n

Hungary and KATA<\/h2>\n

Hungary is an EU member country in the heart of Europe. There is a great new taxation system introduced by the government 3 years ago, called KATA (it is an abbreviation, it may\u00a0 be translated to English like \u201cSmall Taxpayers\u2019 Tax\u201d). It is a fixed amount of tax in every month<\/strong> that is independent of the actual income. The two great advantages of this system are fairness and simplicity.<\/p>\n

What enterprises may enter KATA system?<\/h2>\n

Hungarian private entrepreneurs, Bt-s and Kkt-s (business associations) may apply the system. Hungarian limited liability and private or public limited companies may not apply this form of taxation.<\/p>\n

Is there any limit for this tax?<\/h2>\n

Well, according to the regulation, there is no limit, meaning, the system may be applied without any limitations and the taxpayer will not lose its status because of generating too much income.<\/p>\n

However, there is an additional tax, which is 40%,<\/strong> above 12 million HUF<\/strong> (ca. 39.735.-EUR<\/strong>) of income per year. In practice, this greatly limits the whole application of the system.<\/p>\n

How to start a Hungarian enterprise?<\/h2>\n

To start a Hungarian Bt. (Kkt. is not recommended as all the owners have unlimited financial liability) or private enterprise and register under the KATA system, you will need a Hungarian residence permit and a local social security number.<\/p>\n

If you arrive outside of the EU (i.e. you have no EU citizenship), taking advantage of KATA may be tricky and difficult but not impossible.<\/p>\n

For those who come from the EU, registering under KATA system is easier, since they can get a residence permit in a simplified process.<\/p>\n

How much is the KATA tax?<\/h2>\n

It is 50.000.-HUF in each month plus 50.000.-HUF for the local government in each year. That makes 650.000.-HUF in a year <\/strong>(ca. 2.150.-EUR<\/strong>).<\/p>\n

What does the tax include?<\/h2>\n

It includes the following items:<\/p>\n