Page 5 - 20140114_PS-Newsletter_On-Changes-of-Taxation

PS Newslett er

14 January 2014

under the Act on CIT. Consequently, the acquisition Default penalties
of shares in real estate holding companies will trigger The rate of default penalties regarding the top-up pay-
transfer duty liability – irrespectively of the company’s ment obligation is not modified; however, the differ-
main activity indicated in the company register. ence (gain) deriving from exchange rate fluctuations –
Other changes between the due date of the top-up payment and the last
day of the company’s business year – does not have to
It has been clarified that transfer duty payment liability be included in the base of the default penalty calculation.
arises in cases of the leasing of real estates and vehicles
provided the ownership right is transferred at the end of Modification of choices made in the tax return
the repayment term. In case the taxpayer is granted several options to choose
Exemption from gift and transfer duty will be extended from in a tax return, he will be entitled to file an applica-
for transfers between spouses and for acquisitions due tion requesting the modification of the choice he made,
to the termination of marital arrangements. provided that this modification does not effect the amount
of tax, tax base or state subsidy.
An instalment payment scheme for a period of 12 months
will become available for any private individual when Binding ruling
acquiring their fist residential property. Up till now, the According to the tax law changes, future binding rulings
acquirer had to be under 35 to be eligible for paying in (the resolution of the minister in charge of taxation)
instalments. will determine tax liabilities or the lack of it only for the
requestor taxpayer, and not for all taxpayers who have
VII Rules of taxation a connection with the issue of the binding ruling request

(i.e. the ruling is binding only in respect of the requestor,
Exemption from tax registration not the other contracting parties). Furthermore, the
Based on the tax law changes, taxpayers having no processing time of the binding ruling request will be
establishment in Hungary or not being obliged to be extended, and the fee of the standard ruling request
will be HUF 5 million, while an urgent ruling request
established according to the regulations of the Act on will cost HUF 8 million. Permanent ruling requests for
VAT, will be exempt from tax registration if their busi- standard cases will cost the taxpayer HUF 8 million,
ness activity is limited to selling products under VAT while requesting an urgent permanent ruling will cost
warehousing arrangement – provided that the products HUF 11 million.
remain under the arrangement or if the Customs Office The taxpayer can request a personal consultation with
acknowledges the export of the products to locations the minister responsible for taxation about the transac-
outside the territory of the Community. tion in question and about the process of the binding rul-
Self-revision ing before filing the ruling request; this consultation costs
HUF 100,000. The opportunity to appeal against binding
As of 1 January 2014 VAT return adjustments neces- ruling resolutions at the Ministry is abolished; however,
st
sitated by the change in the amount of VAT levied by taxpayers may address the case to the courts and initiate
the Customs Office will also have to be regarded as self the review of any resolution by legal means.
revision. The time limit set for the process is increased from 60 to
Modification of tax return with self revision 75 days, that may be extended once by a maximum of 60
days. Time limit in urgent procedures will increase from
Tax returns filed before the deadline set for submission 30 to 45 days, that may once be extended by 30 days.
will be allowed to be revised – previously, self revision of Special tariffs applicable to contract types, contract pack-
these returns was only possible once the official dead- ages and to transactions not recognized as anticipated
line prescribed for submission was passed. The revised future transaction will be eliminated. As a result, a sepa-
amount will become due according to the general rules rate application should be submitted for each transaction
and no self revision fee will need to be charged. and contract, thus it will no longer be possible to cover

Electronic mandate letters a given type of contract by filing only one binding ruling
request.
Mandate letters announcing tax investigations may now The new regulations shall be applied to requests submit-
be delivered electronically (presumably via the electronic ted after 1 January 2014.
st
filing system) as well as physically. Furthermore, during
a tax audit, the Tax Office will be authorized to audit any Rules of representation
software, IT system and calculation used for the book- Rules of representation will be eased in relation to the
keeping or the processing of receipts or documents. procedure of tax refund: according to the changes a

On changes Of taxatiOn 5