Small business tax (kiva) is becoming an increasingly popular and best choice for Hungarian enterprises. With it, companies can save 24 billion forints (almost $ 80.5 million).

In 2018, statistics showed that 29 thousand companies are in such a tax regime, and by December 1 of this year, the number of companies that pay small business tax amounted to 41.5 thousand, the State Secretary of the Ministry of Finance of Hungary, Norbert Izer, told to MTI.

Due to the popularity of the tax on small businesses, its rate in 2020 will be reduced by 1% (from 13% to 12%). It is estimated that current companies will pay 5 billion forints (about $ 16.8 million) less in total. But this amount may turn out to be higher thanks to the new 5 thousand companies that decided to switch to such taxation in December.

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According to the calculations of the Ministry of Finance, a small business tax is suitable for a large number of other companies (about 57 thousand) and thanks to kiva, they can save up to 24 billion forints.

The tax base for small businesses is based on the number of personal payments and dividends paid, which is also reduced due to net capital raising. Thus, as of January 1, 2020, the tax rate will be 12 percent of the tax base at which the company is exempted from filing and paying corporate tax, social security tax, and professional training fees.

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Hungarian companies can save billions

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