Pausing or Closing a Sole Proprietorship?

Pausing: a temporary stop, the business stays registered

Pausing is declared through the Webes Ügysegéd, free of charge, and can be started at any time: even scheduled in advance for a future date. It can last at least 1 month, and at most 3 years; if you don't report resuming within that window, the registry closes the business automatically, turning the pause into a permanent closure.

From the day the pause starts, you can't earn revenue or issue an invoice under the activity (aside from correcting or cancelling invoices tied to sales made before the pause). At the same time, your insured status pauses too: you owe no social security contribution or social contribution tax for that period, but as a result you're also not entitled to healthcare through that relationship, unless you have another insured relationship (e.g. employment). See the insurance status article for more, including the health-service-contribution risk.

While paused, you don't need to file an extraordinary return: NAV explicitly confirms this. If you're VAT-registered, your open filing period closes as of the start of the pause, then resumes once you restart. Resuming (like starting the pause) is also declared via the Webes Ügysegéd; afterward, the business continues under the same tax number and previously chosen tax regime.

Closing: a permanent end

Closing is also declared through the Webes Ügysegéd, free of charge, and the business is struck from the registry as of the declaration date: your proprietor status ends permanently (restarting would mean registering again from scratch).

Unlike pausing, closing comes with a final (extraordinary) filing obligation: within 30 days of the closure date, you must file every tax and contribution return not yet covered by a filed return (VAT, social security contribution, social contribution tax, etc.), except SZJA. The annual SZJA return (which also finalizes your business income for the year) is still due by May 20 of the year following closure, on the normal deadline.

Closing also requires:

• Taking an inventory of stock, and settling what happens to remaining fixed assets: if you withdraw them for personal use, that can count as taxable revenue/income in some cases, at market value.
• Reporting the closure for local business tax purposes too, to the municipality where your business is based, on its own separate deadline: see the HIPA calculator article.
• Continuing to keep your records after closure, for the remainder of the statute-of-limitations period: this obligation doesn't end when the business does; see the record-keeping article.

Which one should you choose?

If you don't expect revenue only temporarily (illness, working abroad, having a child, or simply a gap between projects) but plan to continue the business later, pausing means less administration: no final return, and the business picks back up under the same tax number. If you're permanently done with self-employment, taking a job, or moving into a business entity, closing is the right path, even though it comes with more immediate work.

This article is for general information only and does not constitute tax advice. Source: the Sole Proprietors and Sole Proprietorships Act, 2009. évi CXV. törvény (net.jogtar.hu), and the Rules of Taxation Act, 2017. évi CL. törvény, on the extraordinary filing obligation.

Last updated: July 31, 2026.