New tax rules to chase away Hungarian tourist guides?

On Tuesday, the Hungarian parliament accepted the federal government’s modifications to the favored small enterprise tax (KATA) in Hungary. Because of this, KATA payers, excluding taxi drivers, will be capable of generate revenues by doing enterprise solely with personal people and Hungarian residents. Specialists say that many vacationer guides will disappear from the tourism sector since they should pay a lot greater taxes due to the modifications. Beneath you possibly can learn the main points.

A whole bunch of hundreds of households in bother in Hungary

In response to turizmusonline.hu, the brand new guidelines of KATA trigger issues within the Hungarian tourism sector. That’s as a result of, from September, it is going to solely be worthwhile for self-employed people working full-time of their enterprise and offering providers or promoting merchandise to people. They should pay a flat tax of HUF 50,000 (EUR 122) per thirty days if their annual revenues don’t exceed HUF 18,000,000 (EUR 43,932.26). Nevertheless, many of the present KATA payers don’t fall into that class. They produce revenues by collaborating with corporations and establishments or they solely work part-time of their enterprise. Vacationer guides and Airbnb homeowners are good examples of that.

Based mostly on the calculations of mfor.hu, the modifications have an effect on at the very least 2/third of the roughly 450,000 KATA payers. A small enterprise will lose EUR 106.63 per thirty days if its yearly income doesn’t attain HUF 3,000,000 (EUR 7,332). That loss rises to EUR 143.29 per thirty days if the annual income is HUF 5,000,000 (12,221 EUR). The loss is respectively EUR 180 and EUR 452 per thirty days if the small enterprise reaches the HUF 7,000,000 and 12,000,000 thresholds (EUR 17,019 and 30,000). These are vital losses if you happen to take into account that the median common revenue in Hungary is beneath EUR 1,000 per thirty days.

Furthermore, the unique tax scheme was so easy that no one wanted to rent an accountant. Administering different tax strategies is rather more tough. Subsequently, most individuals will want the assistance of knowledgeable. That may add EUR 50 to the bills of the previous KATA payers, every month.

Coup de grâce to many vacationer guides

Within the tourism sector, vacationer guides, waiters and cooks selected KATA. Judit Deák, the chairwoman of the Federation of Hungarian Vacationer Guides, stated that the scenario was not as grave because it appeared. They hope that the federal government will change the related rules as occurred through the pandemic when the administration initially excluded vacationer guides from a number of allowances. Nevertheless, they ultimately modified related decrees upon receiving quite a few complaints from folks working in that sector.

Mrs Deák highlighted that vacationer guides generate revenues by working with journey businesses that understandably are usually not personal people. Moreover, most vacationer guides work with a number of journey businesses. She added that, supplied the federal government doesn’t change the brand new guidelines,

many will proceed their work illegally, which implies the state will lose a major quantity of tax cash.

One other consequence could be that vacationer guides should increase their costs. In that case, fewer businesses will select their providers as a result of they won’t have the finances. And so, the circle closes. 10-20 % of the vacationer guides left the sector due to the pandemic. That fee would possibly improve due to the brand new KATA guidelines.

As we reported,

protests broke out on Tuesday due to the KATA modifications.

Demonstrators gathered on Kossuth Sq., close to the parliament. The group later marched to Margaret Bridge and blocked the visitors there. At midday, they did the identical on the Elizabeth Bridge. Ruling Fidesz and KDNP MPs didn’t care: they voted for the brand new guidelines 120 to 58. You possibly can learn our report on the Tuesday protest and take a look at the photographs on THIS hyperlink.

The federal government said the brand new guidelines would remedy the difficulty of “hidden employment” because the preferential tax can be restricted to entrepreneurs promoting their merchandise or providing their providers to residents. KATA payers, excluding taxi drivers, will, thus, generate revenues by doing enterprise with personal people and Hungarian residents solely. The brand new rules are to take impact on 1 September, whereas taxpayers can have time till 25 September to point whether or not they want to stick with the modified system or choose different types of taxation.

Supply: turizmusonline.hu, mfor.hu