from 1 January 2025 Act CL of 2017 on the Rules of Taxation („Art.”) also include provisions for higher default penalty rates for general cases not specified, for the use of undeclared workers and for breaches of the obligation to issue invoices and to keep documents.
The tax authority can apply the higher default penalty rates from 1 August 2024 on the basis of Government Decree 181/2024 (8 July 2024) and from 1 January 2025 on the basis of the Art., so in general, not specified cases, the tax authority can impose a default penalty of up to HUF 400,000 on natural persons for breach of statutory obligations instead of the previous HUF 200,000, and up to HUF 1,000,000 on non-natural persons instead of the previous HUF 500,000.
The tax authority may impose a default penalty of up to HUF 2,000,000 instead of the previous HUF 1,000,000 on a taxpayer who employs or hires an undeclared employee.
In addition, taxpayers who do not fulfil or do not fulfil properly their obligations to issue invoices, receipts or keep documents may be subject to a default penalty of HUF 2,000,000 instead of the previous HUF 1,000,000.
In addition, new named default penalty items have been added to the Art. rules in relation to the data reconciliation procedure and the procedure for clarifying the insured status.
Effect of a general default fine in cases not specified
In addition to the cases not mentioned, the change of the general default fine rate also affects the amount of the default fine that can be imposed for some of the default offences mentioned in the Art.
As of 1 January 2025, the Art. allows the taxpayer to redeem the closure sanction by paying the default fine imposed in the decision and the fine triggering the closure (the amount of which is ten times the amount of the default fine imposed in the case of a closure ordered for twelve days, and twenty times the amount in the case of a closure ordered for thirty days). This is also subject to the taxpayer waiving his right to appeal against the decision imposing a default and paying the default fine imposed and the fine that triggered the closure until the default fine imposed by the decision falls due.
The maximum amount of the default penalty that can be imposed on risky taxpayers is one hundred and fifty percent of the maximum default penalty that can be imposed under the general rules, so in the case of taxpayers who are considered risky taxpayers when a breach of duty is committed or a default is discovered by the tax authority, the default penalty can be up to HUF 1,500,000.
Penalty for failure to comply with the procedure for clarifying the status of insured person
As of 1 July 2025, a new, named omission will be added to the Art. 2025 regarding the procedure for clarifying the status of the insured person. Under this rule, if the taxpayer has not fulfilled the obligation to file a return for the employee or partner declared by him, the tax authority will call the taxpayer to legally fulfil the obligation to file the return or report, setting a 15-day deadline and warning him of the legal consequences of the omission.
If the taxpayer fails to fulfil its obligations within the deadline, the tax authority will impose a default penalty of HUF 50,000 on the natural person taxpayer and HUF 100,000 on the non-natural person taxpayer per individual concerned by the notification.
The tax authority will not impose a default penalty or require the taxpayer to comply with the obligation in cases where the taxpayer is in liquidation, winding-up or compulsory liquidation and can no longer legally fulfil its obligation to file a return or report.
Data reconciliation procedure
The tax authority has introduced a new data reconciliation procedure from 1 January 2025. Such a data reconciliation procedure may take place if the tax authority identifies a discrepancy between other data provided by the taxpayer and data available at the tax authority, for example, online invoice data or data on intra-Community transactions. In the event of such a discrepancy, the tax authority will invite the taxpayer to clarify the discrepancy between the data indicated in the notice through the data reconciliation procedure.
The taxpayer is obliged to carry out the reconciliation within 15 days of receipt of the request, using the electronic interface designated for this purpose. If the taxpayer fails to do so, the tax authority may impose a default penalty of HUF 300,000 for breach of the data reconciliation procedure, which has been added as a new item in the default penalty rules.
According to the tax authority, the first data reconciliation procedures will start on 24 February 2025, with a limited number of taxpayers expected to receive a first round of notifications, where the turnover of their online invoice and online cash register was significantly higher than the amount entered in the sales lines of their VAT return.
Taking into account the rules summarised above, it is still recommended to pay particular attention to the legal compliance of obligations in order to avoid increased fines for non-compliance. The tax specialists of Moore Hungary Tax Advisory Kft. remain at your disposal to answer any tax-related questions you may have, please do not hesitate to contact us.
Moore Hungary
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