Hungary’s fixed monthly small-business tax could soon open up again. On 6 October 2026, Prime Minister Péter Magyar announced that the government has decided to expand KATA: part-time entrepreneurs, pensioners and university students would be able to choose it again, KATA taxpayers could once more invoice companies, and the annual revenue cap would rise. In return, the monthly tax would go up, and so would the social security cover it buys.
This is an announcement, not yet law. The government has promised a public consultation on the changes, and the figures below are not final: they may still change before a law is adopted. Below is what was announced, how it compares with today’s rules, and what it would mean if you run a business in Hungary.
In short: Full-time KATA taxpayers would pay HUF 100,000 a month (HUF 75,000 in 2027 if they invoice only private individuals), and part-timers would pay HUF 50,000. Invoicing companies would be allowed again, with a 15% tax on that revenue, and the annual cap would rise from HUF 18 million to HUF 22 million.
What is KATA, and why does this matter?
KATA (kisadózó vállalkozások tételes adója) is a fixed monthly tax for small sole proprietors. A single fixed payment replaces personal income tax and social contributions, which makes it the simplest way to run a small business in Hungary. VAT and local business tax are handled separately.
By 2022, more than 400,000 entrepreneurs were using KATA, including part-timers, pensioners and freelancers who invoiced companies. From 1 September 2022 the rules were tightened sharply: only full-time sole proprietors invoicing private individuals could stay, and most of the rest moved to flat-rate taxation (átalányadó). The new plan would reopen much of what was closed in 2022, at a higher monthly price.
Today’s rules vs. the plan
- Now (2026)Planned from 2027
- Full-time sole proprietors onlyAlso part-timers, pensioners and university students
- Invoicing a company ends KATA statusCompany clients allowed; that revenue is taxed at 15%
- HUF 50,000 a month (full-time)HUF 100,000 a month (HUF 75,000 in 2027 if you invoice only private individuals)
- Part-timers cannot choose KATAHUF 50,000 a month for part-timers
- HUF 18 million annual revenue capHUF 22 million annual revenue cap
- Benefits based on HUF 108,000 a monthHigher base for sick pay, maternity benefits and pension
Who could choose KATA from 2027?
- Part-time entrepreneurs, for example employees who run a business on the side,
- pensioners who run a business,
- university students who run a business alongside their studies,
- and, as today, full-time sole proprietors, now including those whose clients are companies.
According to the Prime Minister, this could bring more than 100,000 new small entrepreneurs into KATA.
How much would it cost?
| KATA taxpayer | Planned monthly tax |
|---|---|
| Full-time, invoicing only private individuals, in 2027 | HUF 75,000 |
| Full-time, invoicing only private individuals, from 2028 | HUF 100,000 |
| Full-time, also invoicing companies | HUF 100,000 |
| Part-time | HUF 50,000 |
The higher amounts come with better social security cover. Today, KATA counts only HUF 108,000 a month towards sick pay, maternity benefits and pension, roughly a third of the 2026 minimum wage (HUF 322,800). The government says the new base will be higher, but the exact figure has not been published yet. Nor did the announcement say which rate applies to pensioners and students; we expect the draft law to clarify this.
Invoicing companies: the 15% rule
For many freelancers this is the biggest change. KATA taxpayers could again invoice companies and other organisations. Revenue from them would be taxed at 15%, and the fixed monthly KATA already paid would count towards that amount.
For a full-time KATA taxpayer, this means extra tax only appears above about HUF 8 million of company revenue a year: 15% of HUF 8 million is HUF 1.2 million, exactly twelve months of HUF 100,000. Here is how it would work for HUF 12 million invoiced to companies in a year:
| Full-time KATA, HUF 12 million company revenue | Amount |
|---|---|
| 15% of HUF 12,000,000 | HUF 1,800,000 |
| Fixed KATA already paid (12 × HUF 100,000) | − HUF 1,200,000 |
| Extra tax due | HUF 600,000 |
| Total KATA for the year | HUF 1,800,000 |
Based on the announcement; the exact mechanism will be set out in the draft law. The HUF 8 million figure was quoted for full-time taxpayers. Applying the same arithmetic to the part-time rate of HUF 50,000 a month would give HUF 4 million, but this has not been confirmed.
A higher revenue cap: HUF 22 million
The annual revenue cap would rise from HUF 18 million to HUF 22 million. Under current rules, revenue above the cap is taxed at 40%. The announcement did not say whether this will change.
What happens next
The announcement is not yet law. The government has promised to put the changes out for public consultation, and only after that will a bill go to Parliament. The amounts, thresholds and dates in this post are the ones announced on 6 October, and they are not final: any of them may change during the consultation or in Parliament.
Until a new law is adopted and promulgated, today’s KATA rules apply in full, including the rule that invoicing a company ends KATA status.
A note on the timing
This post is based on the government’s announcement of 6 October 2026; no draft law has been published yet. In any specific case, the law as finally adopted and NAV’s guidance prevail. We will update this post after the consultation and once the draft is out.
Not sure whether the new KATA would be worth it for you? We are happy to look at your numbers.
