On 31 May 2019, the Ministry of Finance announced the Government-approved Action Plan for the Protection of the Economy. To help small businesses, the small business tax rate (KIVA) will be reduced from 13% to 12% from 1 January 2020. The tax cut will affect over 40,000 Hungarian small businesses and leave 5 billion forints (15.3 million euros) in companies.
In addition to the tax cut, the goal of the government is to simplify the tax system. In recent years, the government has introduced tax preferences for small businesses (KATA and KIVA).
In order to reduce the administrative burden on companies and improve their liquidity, the government will abolish the advance corporation tax payments on companies that generate annual sales of more than HUF 100 million so that such companies may settle their tax payments together with their 20 May tax returns, instead of on 20 December of the previous year.
