The flat rate tax, which will become much more favorable next year, can bring relief to many part-time entrepreneurs, but full-time workers, in addition to the smallest businesses. In addition, it can also help to become an entrepreneur, as anyone can easily, simply and almost risk-free try themselves in the business sphere with this tax, the State Secretary responsible for tax affairs of the Ministry of Finance told MTI.
Norbert Izer recalled that next year, more people than before will be able to choose flat-rate taxation for individual entrepreneurs, and the conditions will also become more favorable.
Among the favorable changes, the state secretary first highlighted the size of the tax-free income limit. This is half of the annual minimum wage, which means that flat-rate taxpayers do not have to pay personal income tax (PIT) up to HUF two million.
In the case of those entitled to deduct the 80 percent cost ratio, an even higher amount of income is exempt from tax, so, for example, photographers, hairdressers, taxi drivers or telephone mechanics who choose a flat tax do not have to pay sja up to HUF 6 million in annual income, he added .
In addition to supporting families, the assistance provided to the smallest businesses is one of the most important elements of the tax policy, underlined Norbert Izer.
This is proven by the fact that currently the kata (itemized tax for tax-paying businesses) is the most popular type of tax, with more than 450,000 people paying their taxes this way. Many taxpayers with smaller incomes – typically part-time entrepreneurs – should switch to a flat rate tax; for those whose annual income does not reach the exemption threshold, the state secretary noted.
Small taxpayers must notify the tax office if they decide to switch from kata to flat-rate taxation next year. If the tax office announces the change (on the T101E form) by December 31, you can apply the rules of flat-rate taxation from January 1, said Norbert Izer.
He indicated: a big advantage of the new type of flat taxation that will come into effect next year is that anyone can choose this type of tax, no matter what kind of activity they do; only the rules regarding the income limit must be observed: the flat tax can be chosen up to ten times the annual minimum wage, which is HUF 24 million.
The income limit is higher in the case of those exclusively engaged in retail trade, they can pay a flat tax even if their income does not exceed fifty times the annual minimum wage, i.e. HUF 120 million, the state secretary explained.
According to Norbert Izer, the flat-rate tax may be one of the most popular types of tax in 2022: in addition to the introduction of the tax-exempt value limit and the significant increase in income value limits, the reduction of the number of cost ratios makes flat-rate taxation attractive to many.
Source: MTI
Featured image source: PM
