Grant Thornton Hungary News

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1 Grant Thornton Hungary News December 2012 Contents Legislative changes coming into force as of 1 st January 2013 part 3 Rules of taxations Company procedures Special sectorial taxes C:\Documents and Settings\zba\Local Settings\Temporary Internet Files\Content.MSO\1A6944E1.tmp / 16:12 1

2 Dear Client, We would like to inform you about the third part of the most important tax changes coming into force from Waltraud Körbler IB Grant Thornton Consulting Kft. E w.koerbler@ib-gtbudapest.co.hu 2

3 Law Changes coming into force on 1 st January, 2013 part 3 Rules of taxation Modifications came into force as of 1 December 2012 Filling up obligation of innovation contribution Filling up obligation is introduced as a new rule also in case of innovation contribution. It is an important rule that filling up obligation is required for the tax year beginning in The difference between the expected annual contribution payment obligation and the already paid tax advances shall be declared and paid by the 20th day of the last month of tax year. Contrary to the corporate income tax and local business tax, filling up is required from every company that is obliged to pay innovation contribution irrespectively of the amount. This deadline for taxpayers paying taxes according to the calendar year is 20 December If 90 percent of the annual innovation contribution is not paid as advance by 20th day of the last month of the tax year, the tax authority may levy 20% default penalty on the difference between the 90% of the annual payment obligation and the already paid advances. We draw your attention to the fact that from 2012 number of taxpayers obliged to pay innovation contribution is enlarged, financial data and number of staff of related parties shall also be considered at the examination of the threshold of small entities. Modifications coming into force as of 1 January 2013 Restriction of cash payment The received or paid cash payment for supply of goods or provision of services in connection with a given contract among taxpayers obliged to open a bank account may not exceed HUF 1.5 million per a month. In case of violation of the restriction of cash payment, the tax authority may levy 20% default penalty on the amount exceeding HUF 1.5 million separately for both parties. Cancellation of Tax ID number due to unpaid tax The tax authority - compared to the preexisting indefinite suspension will suspend the taxpayer s tax number for a definite period of 180 days if the taxpayer fails to fulfil his reporting obligation or to pay his tax liability within a year. If the taxpayer does not pay the tax debt within 180 days, the tax authority will cancel his tax number on the 181st day. Public Database of Debt Free taxpayers If any rule/legislation prescribes the submission of a tax certificate or a combined tax certificate, the request is also deemed to be fulfilled if the taxpayer can be found in the database of debt free taxpayers in the prescribed period. A certificate may be required from the tax authority ensuring that the taxpayer is in the database of debt-free taxpayers. 3

4 It is another change that from 2013 individuals may also be included in the public debt-free database. Conditional tax assessment Based on the new provisions, a claim can be submitted for conditional tax assessment not only in case of legal transactions to be implemented in the future, but also in case of transactions not qualified as future transactions. However in this case, the conditional tax assessment can only be claimed for corporate income tax, personal income tax, small company tax and local business tax. Transfer of overpayments As of 1 January 2013, overpayments on a given type of tax account may be transferred to any other type of tax account. Previously, transfer of overpayments was only allowed to accounts on which tax debt existed. Place of preserving documents/document storing If a company stores its documents electronically, it is not required to report the specific location, only the fact that the documents of the company are stored electronically. In this case, the taxpayer during a tax audit has to ensure availability and possibility of downloading of the documents for the tax authority. Simplified tax return In case the individual applies the possibility of a simplified declaration in respect of her/his personal income tax return and agrees with the data of the tax return compiled by tax authority, she/he is not required to send the declaration back to the tax authority, as if the tax authority does not receive a corrected tax return until 20th of May, it assumes that the taxpayer accepts the sent simplified tax return. This simplification may be also applied for tax return to be submitted on the year of Environmental product fee As of 1 January 2013, tax administration of environmental product fee and public health tax on food products will be processed by the taxation department instead of the customs department of the National Tax Authority. Tax return for the IV quarter of 2012 is still required to be submitted to the customs department of the National Tax and Customs Authority. Risk Management Questionnaire Following the establishment of a new company or in case of ownership change, risk management questionnaire (KOCKERD) filled upon the request of the tax authority can also be submitted electronically as of 1 January It is an important change that in case of failure of the submission of the questionnaire within the given deadline, the tax authority does not immediately cancel the tax ID number of the taxpayer, however it requests the taxpayer for supplementation and it levies a default penalty (up to HUF 500 thousand). The tax authority cancels the tax number only if the questionnaire is not sent despite of request. It is an important rule that disqualification rules do not have to be applied for the members and representatives of companies which tax ID number was cancelled due to the late submission of the KOCKERD questionnaire. 4

5 Possibility of tax debt settlement in tax registration procedure The tax authority among others - denies the determination of the tax ID number during the tax administration procedure if the executive officer to be announced is an executive officer or was of a company that has HUF 15 or 30 million tax debt on the day of the submission of an application for tax number. From 2013 the Act provides a new exemption according to which if the taxpayer proves that the tax debt no longer exists, the tax authority nevertheless issues the tax ID number. Company procedures Based on the rules effective from 1 March 2012, in case of establishment of a company, the tax number of the shareholders and the tax identification number of individuals shall also be provided. In case of a non-resident taxpayer, tax number prescribed by the competent authority of his place of residence shall be provided. For existing companies, the above announcement is required at the first time of change in the company details but not later than 1 February The procedure is free of charge. The above deadline also applies to the rules existing from 1 September 2009 according to which tax identification numbers of the company s representatives should also be announced to the company register. Special sectorial taxes Special sectorial taxes (retail trade, telecommunications activities, and activities of energy suppliers) are abolished as of 1 January

6 Contact IB Grant Thornton Consulting Kft. IB Grant Thornton Audit Kft. Vámház krt.13. H-1093 Budapest T F M E office@ib-gtbudapest.co.hu Information marked here are of general nature, and are based on facts, which can be subject of changes. These information cannot be qualified as accounting, legal and taxation guidance provided by the Grant Thornton Hungary to the reader, therefore they in no way can be understood like these. These materials are not intended to meet certain situations and to be able to use them under certain circumstances, and it can be necessary to consider some tax law and other factors, not discussed here. Therefore before delivering any decision on the basis of the recent information it is advisable to contact the Grant Thornton Hungary or other tax expert. Changes in the Tax Law and other factors in the given case also retrospectively can affect the here provided indications. Grant Thornton Hungary does not take responsibility 6 for informing the readers on these changes.