HUNGARY: Corporate tax of small businesses (KIVA)

The newly formed companies are able to choose this brand new taxpayer status. The tax rate of the KIVA is 16%, the tax base is the gain of the annual cash balance of the company and the annual amount of the wages.

The KIVA actually a „contracted” tax and take out the corporate tax (10%), the social contributional tax (27%) and contribution  of the vocational training fund (1,5%). It means that the employers can reduce the social tax charges from 28,5% to 16%, but their general tax rate on  the cash gain is also 16%. There are exeptions, so the dividend, the loans, etc. are not subject to KIVA.