New rules could be introduced for the taxation of small businesses, while the government would also introduce a new tax on substantial wealth. KATA could once again become available to entrepreneurs running a business alongside other employment, and the current restriction on invoicing companies could be removed. In return, however, a higher monthly tax and a separate rule for revenue from corporate clients would need to be taken into account. At the same time, a new tax liability could take effect from 2027 for net wealth exceeding HUF 1 billion. The proposals presented in early October clarify numerous details, but the final rules may still evolve during the legislative process. We have summarised what is worth knowing about the two proposed changes and which deadlines to watch.

KATA: it could once again become available to a wider range of entrepreneurs

The fixed-amount tax for small business taxpayers, commonly known as KATA, underwent significant changes in September 2022. Since then, this simple form of taxation, previously used widely, has essentially remained available only to sole traders whose business is their main occupation and who provide services to private individuals. As a general rule, invoicing companies results in the termination of KATA taxpayer status, while entrepreneurs running a business alongside other employment were excluded from the scheme.

The government’s plans announced on 6 October 2026 would restore several aspects of the flexibility of the former KATA scheme. The aim of the amendments is to make simplified taxation an option for more entrepreneurs again. According to the government, the change could affect more than 100,000 small business owners.

What would change under KATA?

The most important change is that entrepreneurs running a business alongside other employment, pensioners and university students could once again opt for KATA. Entrepreneurs could again invoice companies and other organisations, which could create new opportunities particularly for consultants, creative professionals, IT service providers and other sole traders working with business clients.

Greater flexibility would, however, come with a higher tax burden. The monthly fixed-amount tax for entrepreneurs whose KATA business is their main occupation would rise from the current HUF 50,000 to HUF 100,000. Entrepreneurs who invoice only private individuals would temporarily pay HUF 75,000 per month in 2027, but the HUF 100,000 amount would also apply to them from 2028. The monthly tax for KATA entrepreneurs running a business alongside other employment would be HUF 50,000. The proposed rules would also increase the annual revenue threshold from HUF 18 million to HUF 22 million.

How would entrepreneurs invoicing companies be taxed?

One of the most important elements of the new scheme is the treatment of revenue received from businesses and other organisations. According to the government’s announcement, this revenue would be subject to a 15% tax, against which the fixed-amount KATA already paid could be credited.

In practice, this would mean that an entrepreneur whose KATA business is their main occupation and who receives HUF 8 million in annual revenue from corporate clients would have no additional tax liability under this rule beyond paying the monthly HUF 100,000 KATA. This is because 15% of HUF 8 million is exactly HUF 1.2 million, which equals the total fixed-amount tax for twelve months.

Higher revenue from corporate clients could give rise to additional tax. The final legislation will clarify exactly how revenue from different sources, tax credits and changes in taxpayers’ circumstances during the year should be treated.

Another important aspect of the amendments for entrepreneurs could be an increase in the basis for calculating social security benefits. According to the government’s announcement, the higher fixed-amount tax would also be accompanied by a higher benefit calculation basis, which could be of considerable significance for sick pay, benefits related to having children and future pension entitlements.

Wealth tax: a new liability could arise above HUF 1 billion

Alongside the restructuring of KATA, the government also plans to introduce a new type of tax. The wealth tax would affect private individuals and asset management arrangements whose net wealth exceeds HUF 1 billion. The draft legislation published by the Ministry of Finance on 6 October sets out in detail the scope of taxable assets, the methods for valuing them and the rules governing the payment obligation.

The tax would operate in bands. The portion of wealth above the HUF 1 billion threshold and up to HUF 100 billion would be subject to an annual tax of 1%, while the portion above HUF 100 billion would be taxed at 1.5%. It is important that the tax would be payable only on the portion of net wealth exceeding the threshold.

What would count towards wealth?

The draft uses a comprehensive definition of wealth. In addition to real estate, financial investments, securities, shareholdings and other significant assets would also form part of the tax base. For domestic taxpayers, assets held abroad would also count, and the rules would also cover assets placed in fiduciary asset management arrangements and private foundations.

The tax payable would be determined on the basis of net wealth, meaning that deductible debts would reduce the tax base. Property and vehicle taxes already paid could, subject to certain conditions, be deducted from the wealth tax, reducing the potential for double taxation.

Valuing assets is expected to be one of the most complex aspects of the system. While the market value of a listed share can be determined relatively easily, establishing the value of a family business or an unlisted company is a considerably more complex task. The draft therefore includes specific calculation methods for valuing businesses and real estate.

This could be particularly important for business owners. Someone may hold a substantial ownership interest in a company without having the available cash needed to pay the annual tax. The wealth tax could therefore also affect ownership and financing decisions.

How many people could be affected, and what economic effects are anticipated?

The government’s impact assessment assumes approximately 15,000 wealthy private individuals and a further 2,000 taxpayers involved in asset management. According to the Ministry of Finance’s expectations, the new tax could improve the budget balance by a total of approximately HUF 800 billion over four years.

However, the draft has already sparked professional debate during the public consultation. The National Association of Entrepreneurs and Employers does not support the proposal in its current form because, in its view, the tax could divert resources away from business investment and development. Asset management professionals primarily consider the valuation rules, liquidity effects and long-term wealth planning issues to be decisive.

When could the final rules be adopted?

Draft legislation on both tax changes was published on 6 October 2026. The public consultation runs until 14 October, after which the proposals could be submitted to Parliament. The exact timetable for parliamentary consideration and any amendments has not yet been finalised.

Based on the current plans, the most important dates are as follows:

For the wealth tax, it is particularly important that, under the draft, the wealth position as at 31 December 2026 would form the basis of the first tax assessment. Thus, although the first payment deadline would fall only in August 2027, assessing the wealth position could already be significant at the end of this year.

What is worth preparing for now?

The restructuring of KATA could be of particular interest to those who were forced to choose another form of taxation in 2022 because of the restriction on invoicing companies. They should compare the expected costs of the revised KATA scheme with the flat-rate taxation or entrepreneurial personal income taxation they currently use. Because of the higher monthly fixed-amount tax and the separate taxation of revenue from corporate clients, the advantages of the new scheme may differ from one business to another.

For private individuals and business owners potentially affected by the wealth tax, reviewing the composition, value and financing of their wealth could become important. Shareholdings in unlisted companies, assets held abroad and asset management arrangements may warrant particular attention.

The most important development in the coming weeks will be the finalisation of the two legislative drafts. The thresholds, details of tax calculations and transitional provisions may still change during the public consultation and parliamentary consideration. Businesses and affected private individuals will therefore be able to undertake final, tailored tax planning after the legislation has been promulgated.

This article was prepared on the basis of information available on 14 October 2026. The changes presented are legislative proposals and may differ from the rules currently in force.