New tax rules to chase away Hungarian tourist guides?

On Tuesday, the Hungarian parliament acknowledged the government’s modifications to the well-known little small business tax (KATA) in Hungary. As a result, KATA payers, with the exception of taxi drivers, will be ready to generate revenues by carrying out small business only with non-public individuals and Hungarian citizens. Experts say that a lot of tourist guides will disappear from the tourism sector since they will have to spend a lot larger taxes mainly because of the modifications. Down below you can study the details.

Hundreds of hundreds of households in hassle in Hungary

In accordance to turizmusonline.hu, the new principles of KATA cause challenges in the Hungarian tourism sector. That is for the reason that, from September, it will only be successful for self-used people functioning comprehensive-time in their organization and offering expert services or promoting goods to people today. They will have to spend a flat tax of HUF 50,000 (EUR 122) for each thirty day period if their yearly revenues do not exceed HUF 18,000,000 (EUR 43,932.26). However, most of the latest KATA payers do not tumble into that classification. They deliver revenues by collaborating with companies and institutions or they only operate aspect-time in their company. Tourist guides and Airbnb owners are very good examples of that.

Centered on the calculations of mfor.hu, the modifications impact at least 2/3rd of the close to 450,000 KATA payers. A small business enterprise will eliminate EUR 106.63 for every month if its annually profits does not reach HUF 3,000,000 (EUR 7,332). That loss rises to EUR 143.29 per thirty day period if the once-a-year earnings is HUF 5,000,000 (12,221 EUR). The loss is respectively EUR 180 and EUR 452 for each thirty day period if the tiny business enterprise reaches the HUF 7,000,000 and 12,000,000 thresholds (EUR 17,019 and 30,000). These are important losses if you look at that the median ordinary revenue in Hungary is down below EUR 1,000 for each month.

In addition, the authentic tax scheme was so easy that no one wanted to employ an accountant. Administering other tax approaches is much far more tough. As a result, most people today will need the assistance of a specialist. That will include EUR 50 to the bills of the previous KATA payers, each and every thirty day period.

Coup de grâce to numerous tourist guides

In the tourism sector, tourist guides, waiters and cooks selected KATA. Judit Deák, the chairwoman of the Federation of Hungarian Tourist Guides, explained that the predicament was not as grave as it seemed. They hope that the federal government will change the related rules as took place through the pandemic when the administration to begin with excluded vacationer guides from a number of allowances. On the other hand, they finally modified pertinent decrees upon receiving a lot of problems from people today functioning in that sector.

Mrs Deák highlighted that tourist guides crank out revenues by functioning with vacation companies that understandably are not non-public folks. Additionally, most tourist guides get the job done with several travel organizations. She added that, supplied the govt does not transform the new policies,

numerous will carry on their work illegally, which means the condition will eliminate a considerable amount of money of tax dollars.

A different consequence could possibly be that tourist guides will have to raise their charges. In that circumstance, much less organizations will select their expert services because they will not have the budget. And so, the circle closes. 10-20 percent of the vacationer guides remaining the sector since of the pandemic. That rate might maximize because of the new KATA regulations.

As we documented,

protests broke out on Tuesday since of the KATA modifications.

Demonstrators gathered on Kossuth Sq., in close proximity to the parliament. The group afterwards marched to Margaret Bridge and blocked the traffic there. At midday, they did the very same on the Elizabeth Bridge. Ruling Fidesz and KDNP MPs did not care: they voted for the new guidelines 120 to 58. You can go through our report on the Tuesday protest and appear at the pics on THIS url.

The government claimed the new rules would remedy the concern of “hidden employment” as the preferential tax would be restricted to entrepreneurs selling their items or offering their companies to residents. KATA payers, with the exception of taxi drivers, will, thus, make revenues by carrying out small business with private individuals and Hungarian citizens only. The new laws are to take influence on 1 September, although taxpayers will have time right until 25 September to show no matter if they would like to keep with the modified system or favor other sorts of taxation.

Source: turizmusonline.hu, mfor.hu