Abstract
Private entrepreneurs have an important role in national economies worldwide. Most of them operate and assume legal obligations as private persons. Consequently, they are taxed pursuant to the legal regulations pertaining to personal income taxation in the respective countries. Incomes tax from individual activities is a substantial source of proceeds for national budgets. When taxes are imposed on the individual activities of private persons, they act as both taxable entities and taxpayers at the same time. They are obliged to account for the payable amount of taxes with the state, and present all the associated, necessary records. Therefore, the persons in question are to shoulder considerable administrative burdens. This aspect surfaces in increasing costs, because in most cases they have to rely on external, professional services. Countries aim at shaping taxation environments that encourage taxable persons to account for and state their own taxes. In pursuing this goal, most states have adopted several methods that allow the simpler quantification of the amounts of taxes beyond the scope of complicated accounting systems. This paper has set the objective to look into these methods in Hungary and the Slovak Republic.
Highlights
Private entrepreneurs take a key role in the operation of national economies
With respect to the incomes originating from their activities, the majority of them – as private persons – belong to personal income tax regimes
Data and methodology The main goal of this paper is to look into and compare the opportunities that private entrepreneurs have in the Slovak Republic and Hungary from the perspective of the quantification of their taxes
Summary
With respect to the incomes originating from their activities, the majority of them – as private persons – belong to personal income tax regimes. Unlike large companies, their operations tend to be less complex. It is necessary for the states to make this fact broadly acknowledged, and frame legal regulations that properly consider this situation It is an important aspect, because beyond accounting rules they should provide private persons acting as entrepreneurs with additional options for the assessment of taxes. These options are to result in methods that impose smaller burdens on entrepreneurs. We want to point out the importance of natural persons by examining secondary data
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