KATA Today: Who's Still Eligible, and Why Most Proprietors Aren't

The 2022 reform: "old" KATA vs. "new" KATA

Until September 1, 2022, KATA (kisadózó vállalkozások tételes adója) was a widely available, broadly-used tax regime open to practically any sole proprietor. Act XIII of 2022 fundamentally reshaped it: the previously broad eligibility was replaced with a much narrower one, still in effect today. Most proprietors who used to be on KATA have since moved to flat-rate taxation or vállalkozói szja.

Who can choose KATA today?

KATA can only be chosen by a main-occupation sole proprietor listed in the sole proprietors' registry. You don't count as main-occupation, and so can't choose KATA, if, every day of the month, you, non-exhaustively,

• hold employment of at least 36 hours a week (combining hours across multiple concurrent jobs),
• pursue a "kiegészítő tevékenység" under the Tbj. (i.e. you're a retired, own-right pensioner),
• are insured abroad under an EU regulation or a bilateral social security agreement,
• are under 25 and a full-time student at a secondary, vocational, or higher-education institution,
• receive a disability benefit tied to at least a 50% health-capacity loss, or held a Group I/II/III disability or accident-disability pension as of December 31, 2011,
• hold a non-supplementary partnership stake (társas vállalkozó) in another business.

You also can't choose KATA if NAV cancelled your tax number in the year of the declaration or the preceding 12 months, or if you earn revenue from renting out or operating a property you own or lease. (Renting out property is taxed differently from business revenue regardless of KATA, see the property rental article for details.) The full list of disqualifying conditions is in NAV information booklet no. 99.

The key restriction: where can the revenue come from?

This is the rule that excludes most business-facing freelancers, developers, and consultants: a KATA-taxed sole proprietor can't earn revenue from a "kifizető" under the Rules of Taxation Act, in practice essentially any business, organization, or municipality, including a foreign payer, only directly from private individuals. The one exception is taxi passenger transport.

If a KATA taxpayer does receive revenue from a kifizető, their KATA status ends automatically, retroactively, as of the day before the revenue was received, and they must report this to NAV within 15 days. Anyone who loses eligibility this way can't choose KATA again for the year it ended, plus the following 12 months.

In practice, this means KATA today is typically available to proprietors who work exclusively for private clients, such as renovation contractors, cleaners, gardeners, private tutors, and hairdressers, not to those whose clients are businesses.

How much is the tax, and what does it replace?

A KATA taxpayer pays a flat 50,000 HUF a month, for every month (or part of a month) the status is in effect, with no proration, due by the 12th of the following month. Paying this flat tax exempts the proprietor from establishing, filing, and paying vállalkozói szja (or átalányadó), their own SZJA and social security contribution, and social contribution tax: the regime's biggest simplification. (See the social contribution tax article for how szocho works outside KATA.)

If KATA-taxed revenue exceeds 18,000,000 HUF in a calendar year, a 40% surtax applies to the excess, due and filed by February 25 of the following year. Paying the surtax doesn't exempt the proprietor from the flat monthly tax; both apply together.

Are you still entitled to benefits?

A KATA taxpayer counts as insured for the duration of their status, so they can still qualify for sick pay, CSED, and GYED: one advantage KATA has over the fully flat-entitlement GYES, which doesn't require any insured history anyway. One important nuance, though: a KATA taxpayer's benefits aren't calculated from actual revenue, but from a fixed 108,000 HUF-a-month base: considerably lower than what a flat-rate or vállalkozói szja proprietor gets by paying contributions on the minimum wage, so KATA-based sick pay, CSED, or GYED payouts are correspondingly low.

This article is for general information only and does not constitute tax advice. Source: the KATA Act, 2022. évi XIII. törvény (net.jogtar.hu), and NAV information booklet no. 99, "Kisadózó vállalkozók tételes adója" (2026. 02. 20.).

Last updated: July 31, 2026.