New obligation in freight transport: BIREG

In addition to the relaxation of the EKAER rules we also mentioned, a new administrative obligation was introduced on 1 January 2021: the pre-permit registration system (or “BIREG”). The stated aim of the BIREG system is to protect domestic road transport companies, but its detailed rules are not yet clear to the target audience, which is further complicated by the fact that no guidelines have yet been published by the legislator. In this newsletter, we present to you the most important rules that can be deduced from the relevant legislation.

The rules of BIREG have been incorporated into a pre-existing government decree (Government Decree No. 261/2011; “BIREG Decree”) with the help of a government decree published on 31 December 2020. The interpretation of the law is complicated by the fact that government decrees do not have a legislative justification, thus the exact meaning of certain terms of the BIREG Decree is not sufficiently clarified.

BIREG is essentially an obligation to register and upload data of transports, which carried out in the territory of Hungary

• with a lorry with a maximum permissible laden weight of over 3.5 tonnes engaged in international road transit for a fee or on its own account, furthermore
• with a lorry without weight limit in the framework of the so-called cabotage (i.e. performed by a non-Hungarian haulier).

In the case of the first point above, only those international transport companies are obliged to register, which are subject to the so-called ECMT-, or bilateral licensing.

The registration and the uploading of the data related to the transport must be done on the official webpage (https://bireg.gov.hu), which interface was created by the Hungarian Ministry of Innovation and Technology (abbreviated as “ITM”). In addition to the Hungarian language, the free interface is also available in English, German and Russian, but unlike e.g. the interface of the Online Invoicing System, the official BIREG website does not contain any additional information, nor has ITM yet issued a formal notice regarding the use of the BIREG system.

To register the transports, the transport company shall be registered first, then can be added in the system the specific transport tasks belonging to the given company, in real time:

• in the case of delivery to Hungary, before crossing the Hungarian border;
• in the case of loading in Hungary, before the start of Hungarian loading.

The BIREG Decree imposes a reporting obligation not only on transport companies but also on the consignor (seller) and consignee (buyer) of the transport, but these two participants should not use the BIREG surface yet. In the case of loading in Hungary, the consignor, in the case of storage in Hungary, the consignee is obliged to examine the existence and the date of the permit required for the transport, the existence of the BIREG transport registration, and should document its process of inspection. If any of these documents are missing or inadequate, the consignor or consignee must notify the appropriate authority. From 1 July 2021, these participants will be also required to use the electronic interface of the BIREG system to fulfil their obligations.

After the expiry of the one-month grace period, i.e. since 1 February 2021, the incomplete or missing BIREG registration or data report may lead a fine, the amount of which may be up to HUF 300,000 (approx. EUR 860) in the case of consignors and consignees, and up to HUF 800,000 (approx. EUR 2,300) in the case of transport companies (in the latter case, the operator of the lorries shall be liable).

Finally, we consider it important to emphasize that BIREG has only partially replaced the EKAER system. It seems clear that the Hungarian legislator intends to make the deliveries of companies exempted from the administrative burden of EKAER traceable through BIREG (with this less VAT evasion is expected, consequently higher incomes for the Hungarian budget). However, in the case of notifiable (or formerly: “risky”) products subject to EKAER, BIREG should be applied in parallel with the EKAER system, i.e. the companies involved can expect increased administrative burdens.

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Should you have any further questions regarding the rules of BIREG, VGD Hungary’s tax advisors are gladly at your disposal.