TAX LAW CHANGES 2021
7.

Tax procedure and tax administration rules

Reliable taxpayer status

From 1 January 2021, the group taxpayer’s taxpayer status will not cease if a newly formed taxpayer joins the group that is unable to perform the required three-year operation. However, if a company that has been operating for several years and does not qualify as a reliable taxpayer is added to the group, the reliable taxpayer status of the group will cease.

For ratings following the quarter that includes 18 July 2020 (for a calendar year taxpayer: Q3), the taxpayer's reliable tax status cannot be revoked during the pandemic contingency period or within 30 days after its end (between 11 March and 18 July 2020) with reference to the enforcement procedure initiated.

Application for a supervisory measure

As in the case of an appeal, a request for a supervisory measure may not, without nullity, establish a new fact or rely on new evidence of which the appellant was aware before the expiry of the time-limit for lodging an appeal at first instance, however, despite the request of the tax authority, he did not provide the evidence, he did not refer to the fact previously.

Prohibition of aggravation in official proceedings

Under the current rules, only new proceedings ordered by a court are not covered by the prohibition on aggravation. Under the new rules, the non-aggravation rule does not apply to new proceedings ordered by a superior body.

International exchange of information

The rules for reporting data under DAC6 rules, i.e. for cross-border constructions, have also been clarified. The so-called reference number has been implemented to be able to link data received from several reporting entities in connection with the same scheme to a single scheme in the system of the tax authority (or other bodies).

Installment and deferral discounts

According to the current rules, reliable taxpayers can use the automatic installment payment option for a maximum of HUF 1.5 million once a year in order to settle the tax debt. The upper limit of the tax debt will double from 1 January 2021, i.e. this option will be available up to HUF 3 million.

In the case of natural persons, the same rule increases from HUF 500,000 to HUF 1 million, while in the case of natural persons not subject to VAT and not engaged in business activities, the same rule increases from HUF 200,000 to HUF 500,000. In connection with the latter, the duration of the installment payment will be increased to 12 months instead of 6 months.

The ban on payment facilities will be extended to group corporate taxpayers.

Penalties

If more than two years have elapsed between two consecutive failures to comply with the transfer price and the obligation to register and keep records of controlled foreign companies, this cannot be considered a repeated failure (which would otherwise result in a fine of HUF 4 million).

The statutory provision that was in favor of the reliable taxpayers will no longer exist according to which the default penalty could have been only imposed up to fifty per cent of the upper limit of the penalty for non-payment if they had reliable taxpayer status during the tax audit period or at the date of the protocol.

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