Working as freelancer in Hungary
Thread poster: Tanja Biallas

Tanja Biallas
Local time: 01:54
English to German
+ ...
Apr 21, 2009

I am German and at the moment I am still working as an employee for a German company. But my husband and I will move to Hungary in the summer. I would like to work as a freelancing translator in Hungary. That's why I am looking for information about how to get started as a freelancer in Hungary. Do I have to get registered? What taxes etc. do I have to pay? I am glad about any information you can share with me regarding this topic.

Thanks
Tanja


 

Williamson  Identity Verified
United Kingdom
Local time: 00:54
Flemish to English
+ ...
Hungary doesn't seem advisable if you want to pay low taxes Apr 21, 2009

An answer to the same question, I asked a while ago:

As a sole trader for example you would pay the following:

healthcare contribution: 11%
pension contribution: 25.5%
private pension fund: 8%
entrepreneurial tax: 4%
personal income tax: 18% (up to HUF 1,500,000, above this 36%)
solidarity tax: 4%

Total: 70.5%. In Germany, 40.5% ?

(source: http://www.vallalkozokedv.webkatalogus.com/egyeni_vallalkozas.html)

This is just to give an example, and obviously there are more favourable alternatives to being a sole trader. Most of my colleagues have closed down their Hungarian companies, and work here but have a company in the UK and pay tax there.


 

Tanja Biallas
Local time: 01:54
English to German
+ ...
TOPIC STARTER
Where do I have to register a "Egyeni"? Apr 22, 2009

Thanks for your answer, Williamson.

I see that it is not very attractive, but I cannot have a company in another country for various reasons.

I want to start a Egyeni as it is called in Hungary. Does anybody know how I do that? Do I have to fulfill certain conditions as EU-foreigner?


 

Katalin Horváth McClure  Identity Verified
United States
Local time: 19:54
Member (2002)
English to Hungarian
+ ...
It will not be simple Apr 22, 2009

Tanja,
I assume you are going to be a permanent resident in Hungary, right?
(Otherwise you would not bother with registering, I assume.)

In Hungary, in order to register (get a license) as a freelance translator (sole proprietor), you have to have a translator's certificate. This is awarded if you pass a specialized exam in Hungary. I am not sure whether they accept any certificate from Germany instead.
If you don't have the certificate, you will not get your license, and you will not be able to issue invoices as a freelance translator.
The only way around this seems to be to form a company of your own, or work for an agency that has translation listed among its approved scope of activities.
Is your husband Hungarian?
I am asking this because you will need significant Hungarian language skills to be able to navigate the bureaucratic and ever changing regulations so you would not end up with hefty fines from the tax authorities.

As to the taxes and other obligations Williamson mentioned above, it is true, and one more thing: You have to pay the first 4 on the list every month, even if you did not make any money in that month (in that case it would be based on the minimum wage, which was 69.000Ft/month in 2008).

There is also the problem of VAT - you need to deal with that too, or get approved for a special tax-category that waives it...
There were many discussions about these things in the Hungarian forum here on ProZ, I wish you could read it...

[EDIT] I just found a past discussion that is in English, please read it:

http://www.proz.com/forum/hungarian/99764-how_to_create_a_little_firm_in_budapest_viiith_district.html#811030

There are too many things involved, I wonder if there is anywhere on the authorities' websites an English language summary for people like you...

Katalin

[Edited at 2009-04-22 14:09 GMT]


 

Zoltán Kulcsár  Identity Verified
Local time: 01:54
English to Hungarian
some relief... Apr 22, 2009

Williamson wrote:

An answer to the same question, I asked a while ago:

As a sole trader for example you would pay the following:

healthcare contribution: 11%
pension contribution: 25.5%
private pension fund: 8%
entrepreneurial tax: 4%
personal income tax: 18% (up to HUF 1,500,000, above this 36%)
solidarity tax: 4%

Total: 70.5%. In Germany, 40.5% ?

(source: http://www.vallalkozokedv.webkatalogus.com/egyeni_vallalkozas.html)

This is just to give an example, and obviously there are more favourable alternatives to being a sole trader. Most of my colleagues have closed down their Hungarian companies, and work here but have a company in the UK and pay tax there.



these figures are quite scaring, but the thing is the first year all these taxes (except the personal income tax) are to be payed by the minimum wage, and after a year by the double of the minimum wage


 

Tanja Biallas
Local time: 01:54
English to German
+ ...
TOPIC STARTER
Where can I find out if my German translator certificate is acceptable to get a licence? Apr 23, 2009

I have a German translator certificate (university degree). Do you know the competent authority that can tell me if my German certificate is sufficient?

I will be a permanent resident in Hungary for approximately three years. We are moving to Hungary because my husband is sent here from his employer. He is not Hungarian. I am learning Hungarian, but it is still not good enough to understand the website of Hungarian authorities e.g. I have some distant relatives in Hungary and maybe other sources that can help me overcome the language barrier. I know that there will be a lot of bureaucratic work and it won't be easy. But the alternative would be to work not at all. And that is not what I want. I could continue to work for my clients that I already have, so I will have income from the beginning and should be able to pay the taxes and social contributions.


 

Katalin Horváth McClure  Identity Verified
United States
Local time: 19:54
Member (2002)
English to Hungarian
+ ...
Tanja, come over to the Hungarian forum Apr 23, 2009

One of our colleagues posted a link to this thread, that's how I found out about it.
Since the topic is very Hungary-specific, I suggest to continue there, as some people may not read this forum. It's OK if you post in English, or even German (although I think more people speak English among the regular forum participants).
Here is the link, you can reply to this one with your request:

http://www.proz.com/forum/hungarian/133279-segs_egy_net_kollak.html


 

Williamson  Identity Verified
United Kingdom
Local time: 00:54
Flemish to English
+ ...
Please explain... May 5, 2009

You may have made a mistake in English due to which I do not understand what you mean with "by" the minimum wage???

Do you mean "on the minimum wage"?
Who says a translator is earning the minimum wage.

But like in all high-taxed countries people are quite "inventive" in avoiding taxes and given the fact that I come from a high-taxed country, I am pragmatic. Keep administrations happy.
*-*-
If I was interested in Hungary, it was because real-estate is not too expensive.
Buy an old farm with lots of land for say 50.000 euros and invest another 20000 to have it renovated by a friend of mine who is quite handy. Put up shop there.
Learn Hungarian (a difficult and rare E.U.-language) which may be an advantage in E.U.-freelance interpreter tests.

However, when I see how much taxes I'll have to pay, no thank you.
Neighbouring Slovakia has a flat tax-rate of 19% and sunny UAE have no taxes at all.

I would be surprised that in the E.U., Hungary imposes limitations on the freedom to exercise a non-regulated profession such as translation. For example, I have a Masters in Translation from a Belgian college and would not be allowed to be a translator "on the farm in Hungary", because my degree is not Hungarian. The intention of the Bolgna declaration was to unify education in Europe and to recognize equality of degrees and certificates whereever in the E.U. you have obtained them.



Zoltán Kulcsár wrote:

Williamson wrote:

An answer to the same question, I asked a while ago:

As a sole trader for example you would pay the following:

healthcare contribution: 11%
pension contribution: 25.5%
private pension fund: 8%
entrepreneurial tax: 4%
personal income tax: 18% (up to HUF 1,500,000, above this 36%)
solidarity tax: 4%

Total: 70.5%. In Germany, 40.5% ?

(source: http://www.vallalkozokedv.webkatalogus.com/egyeni_vallalkozas.html)

This is just to give an example, and obviously there are more favourable alternatives to being a sole trader. Most of my colleagues have closed down their Hungarian companies, and work here but have a company in the UK and pay tax there.



these figures are quite scaring, but the thing is the first year all these taxes (except the personal income tax) are to be payed by the minimum wage, and after a year by the double of the minimum wage


 

Maksym Kozub  Identity Verified
Local time: 02:54
English to Ukrainian
+ ...
Taxes based on the minimum wage May 19, 2009

Williamson wrote:

Do you mean "on the minimum wage"?
Who says a translator is earning the minimum wage.
Nobody says. However, there may be a situation where you legally pay some taxes based on the minimum wage, while actually earning whatever ampunt (within certain limits). E.g. in Ukraine I pay a so-called "single tax", which includes a portion allocated as a pension contribution under a state-run pension scheme. (I can pay an extra contribution if I want. It is perfectly legal, however, to pay nothing more than the minimum, in which case I will only get a minimum pension from the government when I get old.) Under this system, I pay a monthly tax of ca. USD 25 (and _nothing_ else!), and I am allowed to apply this system if I earn up to ca. USD65,000 a year. Quite a fantastic system, huh?
This may also be the case in Hungary.


 


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