This is how the lives of sole proprietors will change from January 1: the individual tax-free limit will increase to 20 million forints, SZOCHO will be transformed

The changes affect more than 200,000 individual taxpayers who are subject to tax exemption among Számlázz.hu businesses, who are approx. two-thirds are flat-rate taxpayers, meaning the amendments are relevant to a wide range of entrepreneurs.

The individual tax-free limit increases from 18 million to 20 million forints

The current limit of 18 million forints will increase to 20 million forints from 2026, then the new ceiling will be 22 million forints in 2027, and 24 million forints from 2028. This may be a relief for many entrepreneurs who have been operating near the tax-free limit so far and do not want to enter the VAT circle. Those who were previously subject to VAT can also choose individual tax exemption from January 1, provided that they do not exceed the 20 million forint limit in 2025 and, presumably, in 2026. This means that those who previously dropped out of the individual tax exemption may also be returned to it.

The 40% band in flat-rate taxation will be changed

Of the current cost ratios of 40%, 80% and 90%, only the 40% band will be changed: it will be 45% from January 1, 2026, and then increase to 50% from 2027. With the amendment, the assumed cost ratios will be 45%, 80% and 90%, which means that the legislator simply assumes that 55%, 20% or 10% “profit” (entrepreneurial income) is generated and this is what is subject to taxation.

According to data from the framework and tax monitoring service of Számlázz.hu, which supports the accounting and taxation tasks of sole proprietors, most flat-rate tax businesses fall under the lowest cost ratio, so they can enjoy the relief.

The definition of the minimum tax base for social contribution tax (SZOCHO) is changing

A reduction in the SZOCHO base has also been announced. Until now, the minimum social contribution tax has to be paid after 112.5% ​​of the minimum wage or the guaranteed minimum wage, but this multiplier will be abolished from 2026. As of January 1, entrepreneurs will no longer have to pay social contribution tax after the increased base value, but only after 13% of the minimum wage or the guaranteed minimum wage.

The change affects 44.61% of flat-rate tax customers using the Számlázz.hu Framework and Tax Monitor.