Levonhatósági

Levonhatósági refers to the concept of deductibility in Hungarian tax law. It is a fundamental principle that determines which expenses can be subtracted from revenue to arrive at taxable profit. For an expense to be considered levonható, it must generally be related to the generation of income and be properly documented. This means that businesses and individuals can reduce their tax burden by accounting for legitimate business expenditures. The specific rules and limitations regarding deductibility are detailed in Hungarian tax legislation, such as the Act on Corporate Tax and the Act on Personal Income Tax. These laws outline what types of costs are eligible, the required supporting documentation, and any potential restrictions. Understanding levonhatósági is crucial for accurate tax reporting and compliance. It ensures that only the net profit, after accounting for necessary business expenses, is subject to taxation. The principle aims to create a fair tax system by acknowledging that the costs incurred in earning income should not be taxed.