At the request of Polgardi, I have started a thread for info and advise on self employment and starting up a business in Hungary. When I get some time, I will copy over relevant posts from other threads. A good read is from company house.

Some things to consider are -

A Ltd. Co. in Hungary (KFT) its much cheaper to have an unlimited co. or partnership (BT). Its not just the tax position its also that the accounting requirements are stricter (more expensive) for a Ltd. Co. along with other taxes other than company tax. A short while ago there were changes in the law that means the directors of a Ltd. Co. can be held liable in certain circumstances if things go south and there are limits on the responsible persons re-starting, I don't know the details but its something you will need to know as it might affect the choice between a Ltd Co. (KFT) and an Unlimited Co. or partnership (BT).
VAT (AFA here) might be another consideration, 27% here and compulsory at 6M ft. turnover. I can't advise how the VAT might work out. Can the UK Co. bill your work here at UK VAT rates which might make a difference to clients/customers??
I don't know your circumstances but for example if you could starts taking a private pension early, (draw down perhaps so that it is totally flexible) to give you pensioner status you will save a packet on Hungarian NI and get cheaper running costs for your Hungarian company as a foreign pensioner running a Hungarian Co.

Finally: It is worth your while speaking with a competent solicitor and accountant.

This is very helpful. Thanks Rural :-)

If you are classed as 'self employed' in Hungary does one come under the Bt route? This is the general impression I am getting, but I am unsure if I am getting the wrong end of the stick?

Many thanks

Even having spoken with the accountant, I still don't understand everything. It might just be me but I think BT is probably the best fit and easiest for you. Apparently, there is a self employed status as we know it but only for certain professions and then there is casual status and occasional work if not operating as a company, the later two you can declare your tax liability online but must do so before commencing work. I'm sure it's very straight forward if you are Hungarian and used to the system but my advise would be to have a chat with a good accountant and leave it all to him/her.

No, Polgardi, the self employed (Egyéni vállalkozó) option is not coming under the Bt route. Also, as far as self employed, being self employed in the UK and work across borders seems superior by far.

Disclaimer: I do have Kft and is providing services to business chiefly as a consultant.

Oh, well perhaps I am getting conflicting advice from my accountant then. I was under the impression that if you worked for yourself then for tax reasons it was better to go down the Bt (KATA) route. I will re check

Probably your accountant is right when she/he advises that you will tax better under a Bt. then self-employed in Hungary. Yet, the Hungarian system is so complicated I am considering ditching my Kft and go self-employed in the UK.

Maybe I should have asked why do you want to incorporate or go self-employed in Hungary vs staying/going self-employed back home and deliver your services in Hungary?

[QUOTE
Maybe I should have asked why do you want to incorporate or go self-employed in Hungary vs staying/going self-employed back home and deliver your services in Hungary?[/QUOTE]

Because I live in Hungary and would assume that was illegal?

I don't know the ins and outs...Hungary has a mind-boggling system but my wife is self employed and pays a flat rate of tax and national insurance combined of 50,000 huf per month as here earnings are below the 4 point some million huf per year threshold. This is better for us than the previous system whereby she used to pay between 70-80,000 huf per month depending on her earnings.

Because I live in Hungary and would assume that was illegal? [/QUOTE]
Its not where you live that counts, but where you are resident

Yes this is the KATA route for small business owners which is better than the usual Bt tax route. But it does make me wonder how any business manages in Hungary as the 50,000 is payable regardless of what you earn (up to the limit). So if you earn 50,000 per month, you don't actually earn anything.

Its not where you live that counts, but where you are resident[/QUOTE]

Handy

We're fortunate that she earns more than enough to pay the 50,000. We sat down and did the maths and decided that was the best/cheapest route for us to go down.
Unfortunately, 2 of the schools where she works INSIST on her having a contract and therefore she pays tax separately for those, amounting to about an extra 80,000 huf per month! I thought she must be able to get a rebate at the end of the year as she's registered as self employed but paying tax twice but her book-keeper says not

Having a UK limited company and moving shortly to Budapest, doesn't anyone do the pay a small amount and take the rest of the earnings out as interim dividends as I do in the UK? That is the tax efficient way of doing things in the UK, and I would have thought that it is the same in Hungary?

Yes it is, here you have to pay yourself the minimum salary and pay the NI and tax on that. (Both employers and employees deductions of course) This amounts to about 60K or 70K HUF per month I can't remember the exact figure. As said above a Ltd. co. (KFT) is the expensive way of doing it, a partnership co. (BT) is cheaper to run and tend to get less authority inspections than a Ltd.Co. (Primarily because its the Ltd. Cos. that are used to dump debt)