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Reverse tax at services: - based on the amended 142 § (1) VAT Act effective from 01.May.2008 services like building and other technical installation work that is setting up a real estate, expand ,change or break down are subject to reverse tax service provided that the work requires official building license.

Internet expenses: - internet expenses can be given to employees as tax free allowance. The employees shall ask the monthly invoice onto their own name and shall declare that they account for 100% cost after the received revenue.

Usage of own car: - using the own car by employees can be settled tax free as allocated travel expense if it is used as delegation and provided that from this an official commission is prepared which contains the details of the employee, company as well as the date of the delegation, place, purpose, business partner and road record. In lack of the official commission the owner of the car is liable to pay company car tax.

Company phone: - it can not be used tax free for private purpose. If the private use is allowed then after the 20% private use permitted by law taxes shall be paid or shall be invoiced to the employee. If the private use is invoiced the employee may request a detailed statement instead of the 20%. If the private use is not allowed the employee must declare that he/she dose not use the company phone for private purposes.

Allocation for professional training: - The annual compulsory allocation for professional training is 1.5 % of the total financial basis for the social security contribution (total sum of gross wage). The compulsory allocation can only be reduced to 70% by the sum of the developmental support for the school of professional training or for the institution of higher education - or by the sum of the training the organization of which was based on the adult educational contract for an inside employee or on a study contract meeting the requirements of the Law Book of Work. Training for inside employees can use up 60% of the gross compulsory allocation at micro and small businesses.

Real estate leasing according to VAT act: - letting out a real estate according to the general regulations is VAT free. If the taxable entity wants to lease the property with VAT and wants to deduct the related previously calculated VAT then the leaser shall declare to the Tax Authorities at the beginning of the activity that it differs from the general regulations. The declaration shall be done exclusively at the beginning of the activity respectively at the end of the year becoming effective from 1st of January next year.

Is the name of the company the name of the company? - Each time when you accept an invoice you shall verify if the full and short name appears on the invoice as it is on the certificate of incorporation and ask the invoice only for the registered headquarters. If the invoice doesn’t comply with the previous conditions then the company can not exercise its right to deduct the VAT since the invoice is not issued onto the company’s name.

Travel expenses: - the employee’s monthly pass can be settled tax free if the invoice is issued on the name of the company, the given pass is attached to the invoice and a signed cash receipt certifies that the employee has taken over the amount.

What qualifies as business representation? - In case of appropriate administration - partner’s name, company name, and business event – the meals paid for the business partners can be settled tax free. The meals consumed by staff during such events are always taxable. The tax free business representation threshold is 1% of the annual turnover.

Corporate tax reduction: - the amount of the local tax reduces the amount of the corporate tax (this is valid for 2009 as well) provided that the taxable entity does not have any public debt (towards Tax Authority, local government, Customs) until the end of the year by 31st December.

Agency contract instead of employment? - In case of performing a shorter period work the most suitable employment form is the one with agency contract. Here 10% of the agency fee is tax and contribution free as this is the cost ratio supposed by the law.

Taxpayer exemption: - according to the VAT Act the taxable entity as resident is entitled to choose tax exemption. In this case he is not entitled to tax deduction and he is not subject to taxation. In his invoice VAT rates can not figure. The condition for receiving tax exemption is that the yearly income does not exceed the 5.000.000 HUF. The choice to have tax exemption can be made during the year at registering the taxable entity respectively at the end of the year until 20th December becoming effective from the 1st of January next year. If the taxable entity chooses so, the tax exemption ceases from 1st of January next year or in case of exceeding the threshold value.

Development reserve as tax base reducing item: - businesses have the opportunity to separate funds for investment as development reserve. The upper limit of this is the 50% of the pre-tax profit. This reduces the amount of corporate tax. However it does not reduces the special tax. Within four years the company can purchase fixed assets e.g. property from the separate reserve.

Tax free emoluments: - from 01.09.2009 the family allowance qualifies as tax free emolument. Such income is also the: pension, scholarship, fee of vocational school students, fee for practical training and from 01.04.2010 the maternity allowance. The employee has to declare about the existence of the tax free emolument and also about its amount to the employer. If the employee does not declare about its existence this income officially does not exist but in the annual tax return increases the tax base and it pushes the employee’s taxable income to the higher tax band and therefore it will result in payable tax. If the employee declares he/she has to specify the exact amount so that the employer can calculate the deductible tax prepayment and the current tax bands. If he declares only about the existence of the emolument but not about its amount then the total taxable income earned at the employer will fall in the 36% tax band. The family allowance constitutes in 50-50 % tax free emolument income at parents respectively at the parent and companion.

Preferential employment: - In case of employing a carrier starter the START card can be taken out which decreases the employer’s burden to 15% in the first year and to 25% in the second.

AM small book: - the cheapest employment method is the employment with the casual employee small book (AM ) but as its name shows it is issued only for casual work and the payable income is maximized.

Invoice of the private entrepreneurs: - when receiving an invoice from a private entrepreneur you shall always check if the private entrepreneur number figures on the invoice. (EV number), because in lack of this number it has to be dealt with as person with contract of agency and after the amount of the invoice which figures as agency fee the employer contributions and deducted contributions shall be paid. The deducted part will not be paid towards the partner and above the amount of the invoice extra contributions burden the business.

Who should choose the EVA? - (Simplified Entrepreneurial Tax) For those businesses which yearly income exceeds 3-4 million HUF and related to their activities they can account minimal cost is worth to apply for the simplified entrepreneurial tax (EVA). Up to 3-4 million HUF the cost level is high enough and it does not create taxable gain. The simplified entrepreneurial tax redeems the: VAT, Corporate Income Tax, special tax and Dividend Tax.