The process of becoming a sole entrepreneur


1. Acquisition of knowledge

It is important to get around the topic and learn the exact tax terms. At this point, you may want to consult an accountant to whom you can ask your specific questions on the subject. The simplest form of business is KATA, which makes it easy to calculate your tax burden by paying a fixed amount each month.


It is very important that the following is a universal description! The guide is not suitable for you to cut into the KATA application in all cases without consulting an accountant.


1 / a Costs and tax liabilities


  • KATA itemized tax, which is to pay on the 12th of the month following the relevant month. As a beginner entrepreneur, it is a huge advantage that you have to pay a fixed monthly amount of tax instead of the taxes and contributions you would otherwise have to pay. With this you know all the public burdens. You will have to pay the flat tax even if you did not have income, this is also worth considering when choosing KATA. You can be a KATA entrepreneur either full-time or part-time. When choosing KATA, you must declare whether you will be a full-time or part-time taxpayer. You can choose the latter if e.g. you work with an employment relationship that works 36 hours a week, or you start a business as a retiree or full-time student.
    • As a full-time KATA entrepreneur: the cost is 50,000 HUF per month
    • As a part-time KATA entrepreneur: the cost is HUF 25,000 per month


  • Local business tax: declaration of a sole proprietorship to the municipality
    • All entrepreneurs are required to register for business tax with the local authority responsible for their registered office. If you have your registered office in Budapest, you must do so at the Budapest Municipality
    • The business tax, which is due on 03.15 and 09.15 for a full calendar year, while if the scope of the KATA is shorter than 12 months (eg in case of suspension, year-on-year development), the (time-proportionate) tax is paid in two equal installments. shall be paid by the 15th day of the month following the first and last month


  • Chamber membership:
    • As an entrepreneur, chamber registration is mandatory, which you can arrange at the local Chamber of Commerce and Industry. The deadline for registration and payment of the annual chamber contribution is 5 days after the registration of the company. The following year, the chamber contribution must be paid by 31 March.
    • Annual membership fee: HUF 5,000. You must also pay this amount if you start your sole proprietorship during the year (eg in December) and if you terminate your sole proprietorship during the year, you must also pay the annual fee. If you pause your business all year round, you don’t have to pay an annual fee.


1 / b Taxation rules


  • When starting a business, as a small taxpayer, it is worth choosing the personal tax exemption. Its value limit is HUF 12 million per year. If you start your sole entrepreneurship during the year, the value limit is not HUF 12 million, but the amount calculated pro rata temporis. If the total consideration for the sales you make remains below the value limit, you are exempt from VAT payment and declaration. If you exceed the HUF 12 million limit, you will automatically be subject to VAT. In this case, your income over HUF 12 million will be taxed at 40%.
  • If the taxpayer receives more than HUF 3 million in revenue from the same domestic enterprise from the beginning of the year, a tax burden of 40% will also be incurred on the part exceeding HUF 3 million, which must be paid by the revenue-generating company, not the taxpayer / entrepreneur.
  • It is important that if we paid you over HUF 1 million within a year, you will have to report it to NAV separately after the year in question.
  • As a non-VAT company, you do not need to open a separate bank account for your business, you can use your own bank account. However, if you cross the HUF 12 million limit and get into VAT, you will also need a separate business bank account.
  • If you are a KATA on any day of the month, you will have to pay the tax, even if you start your sole proprietorship in the last days of the month. For this reason, if possible, start your sole proprietorship at the beginning of the month.
  • The nature of your taxpayer status may vary. For example, your employment in which you worked 36 hours a week will end. You will then become a full-time KATA and have to pay the higher fixed tax. The opposite can also happen. If you start working for your business with a working time of up to 36 hours, you will have to pay the lower fixed tax.
  • In the event of a change in your low-tax status, you must notify NAV as the amount of your monthly fixed tax will change. This is required by NAV on your tax invoice based on your original report or subsequent changes. Failure to report will result in consequences. For this reason, NAV treats it as a full-time taxpayer in the given month, while KATA tv. according to you are a side worker. As a result, it imposes a higher-than-prescribed fixed amount of tax on your tax account and expects to pay for it. In some cases, you don’t have to pay a fixed tax for that month (e.g., you were on sick pay for the entire month because you couldn’t work for health reasons). You must communicate this and the reason for this to NAV. If you fail to do so, the fixed amount of tax will be automatically charged by NAV to your tax account. If you have not paid the fixed amount of tax required by NAV, you will be liable to NAV. In order to collect this, NAV first calls to settle your debt. If you do not pay, you can file a collection with your bank. Of course, you can correct your mistake afterwards (eg you will make up for the missed report), and NAV will correct the required fixed tax accordingly. If you do not do this and do not pay despite the call, NAV will collect it.
  • Regarding the tax return, it is important that KATA's return for the previous year is always February 25th.





2. The process of starting a sole proprietorship

            There are two ways to start a sole proprietorship:


  1. In person (2 / a)
  2. Online, through the Customer Portal (2 / b)


You have to choose one of the two. Starting your business is free of charge.


2 / a Personal administration

At any NAV customer service. Documents and steps required to start a business in case of personal administration:


  • Identity card and address card
  • A real and valid email address (to create a Customer Portal / Ügyfélkapu)
  • Determining the registered office of a sole proprietorship. You can give your home address as your registered office address, or even another address. It is important that if you provide another address, the property owner must agree to this and you will need a document from the property owner confirming the title to the Use of the Seat.
  • Code of activity ÖVTJ (List of activities of self-employed persons):
    • Food delivery: 532005
  • Taxation of sole proprietor, VAT or subject tax exempt enterprise
    • You need to decide how you will tax your income from sole proprietorship. You can also choose entrepreneurial PIT, flat tax and KATA taxation


2 / b Online administration

If you do not already have a Customer Portal (Ügyfélkapu) ID, the first step is to register one.

Customer portal can be opened:



Once you have the customer portal registration / e-ID, the next step is to start your individual business with the online Web Assistant.


  • Fill out the notification form through the Web Assistant page. In the future, you will be able to change the data of your individual business here (eg announcing a new field of activity, terminating a previously announced field of activity, changing the registered office). You can ask for your business to be suspended or resumed.
  • Steps to register:
    • Entering personal data
    • Determining the registered office of a sole proprietorship. You can give your home address as your registered office, or even another address. It is important that if you provide another address, the property owner must agree to this and you will need a document from the property owner confirming the title to the Use of the Seat.
    • Code of activity ÖVTJ (List of activities of self-employed persons):
      • Food delivery: 532005
    • Taxation of sole proprietor, VAT or subject tax exempt enterprise
      • You need to decide how you will tax your income from sole proprietorship. You can also choose entrepreneurial PIT, flat tax and KATA taxation.


If you get stuck and want the help of an accountant, feel free to contact the following accountancy office or check out the help compiled by NAV:


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Help compiled by NAV: https://nav.gov.hu/nav/egyeni_vallalkozok_nyilvantartasa/egyeni_vallalkozas_megkezdese

https://nav.gov.hu/nav/egyeni_vallalkozok_nyilvantartasa/gyik_ev_nyilvantartas