Sole proprietorship or company in Hungary: tax comparison
Taxes and contributions for a sole proprietor under each available system and for your own company, for a resident of the chosen country with the same profit.
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Sole trader, lump-sum tax (átalányadó)
Sole proprietorEgyéni vállalkozó – átalányadózás
Income is deemed to be 55% of revenue (a fixed 45% cost ratio; actual costs do not count). Income up to half the annual minimum wage (HUF 1,936,800) is free of personal income tax, the rest is taxed at 15%. Social security contribution of 18.5% and social contribution tax of 13% are levied on the income, but at least on the guaranteed minimum wage of HUF 373,200 a month.
Conditions
Revenue limit: 10 annual minimum wages, HUF 38,736,000 in 2026. The regime is chosen for the whole year; after leaving it you cannot choose it again in that year and the following 12 months.
The 45% cost ratio applies from 2026 (previously 40%) and will be 50% from 2027. The VAT exemption (alanyi adómentesség) is available up to HUF 20,000,000 turnover a year; VAT and the local business tax (helyi iparűzési adó) are not included.
Sole proprietorEgyéni vállalkozó – vállalkozói jövedelem szerinti adózás
Profit based on actual costs is taxed with the 9% entrepreneurial income tax. The remainder (vállalkozói osztalékalap) is treated like a dividend: 15% personal income tax and 13% social contribution tax (up to 24 monthly minimum wages a year). Social security contribution of 18.5% and social contribution tax of 13% on the guaranteed minimum wage of HUF 373,200 a month are due even without profit.
Conditions
No revenue limit; actual costs must be recorded. If profit is below 2% of revenue (income minimum), you either pay tax on 2% of revenue or file a supplementary statement with the return.
You may also pay yourself an entrepreneurial withdrawal (vállalkozói kivét), taxed like a salary; the calculation assumes no withdrawal. VAT: exemption up to HUF 20,000,000 turnover; VAT and the local business tax are not included.
Sole proprietorKisadózó vállalkozók tételes adója (KATA)
A flat tax of HUF 50,000 a month replaces personal income tax, the social security contribution and the social contribution tax; revenue above HUF 18 million a year bears an extra 40% tax. Only for those who sell exclusively to private individuals.
Conditions
Only for a sole trader whose business is the main activity, and only for sales to private individuals: income from a company or other payer (including a foreign one) ends the status. Not available for IT services to business clients.
CompanyKorlátolt felelősségű társaság – kisvállalati adó (kiva)
Instead of corporate tax and social contribution tax the company pays kiva of 10% on dividends paid and personnel payments (for a working owner at least the guaranteed minimum wage of HUF 373,200 a month). Retained profit is not taxed by kiva. Dividends to the owner bear 15% personal income tax and 13% social contribution tax (up to 24 monthly minimum wages).
Conditions
Kiva can be chosen if in the previous year the company expects at most 100 employees and revenue and balance sheet total of up to HUF 6 billion, with a calendar financial year; the choice is notified to the NAV.
An owner who personally works in the Kft. (társas vállalkozó) is insured: an 18.5% social security contribution is due every month on at least the guaranteed minimum wage of HUF 373,200, even without a salary. VAT (exemption up to HUF 20,000,000) and the local business tax are not included.
CompanyKorlátolt felelősségű társaság – társasági adó
Company profit is subject to 9% corporate income tax. For an owner who works in the company, the 18.5% social security contribution and the 13% social contribution tax are paid on the guaranteed minimum wage of HUF 373,200 a month. Dividends bear 15% personal income tax and 13% social contribution tax (up to 24 monthly minimum wages a year).
Conditions
No revenue limit. An owner who personally works in the Kft. is insured even without a salary; if he or she also has an employment of at least 36 hours a week, the minimum base does not apply (not modelled).
VAT: exemption up to HUF 20,000,000 turnover a year; VAT and the local business tax (helyi iparűzési adó) are not included.
Business activity: IT and consulting services for business clients
A single owner, resident in Hungary, with the business as the main activity (no other job), no employees, no children and no allowances (under-25s, mothers etc.), full year.
IT consulting requires at least secondary education or qualification, so the minimum contribution base is the guaranteed minimum wage (garantált bérminimum) of HUF 373,200 a month rather than the minimum wage of HUF 322,800.
Contributions on the minimum base are computed for the whole year, without monthly or quarterly splits. Contributions on the minimum base of the sole trader and of the Kft. owner are treated as deductible costs. The social contribution tax cap for dividends (24 monthly minimum wages = HUF 7,747,200) is applied to the dividend only, as there is no salary.
Kft.: the owner takes no salary; when distributing, all profit after taxes is paid out as a dividend in the same year. Minimum share capital, accounting costs, VAT and the local business tax (helyi iparűzési adó, up to 2%) are not included.
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