Hungarian taxpayers and tax advisors eagerly await the NAV inspection guidelines each year, as they reveal the areas that will be targeted by the tax authority in that particular year. Here are the key points of the 2025 NAV guidelines:
Data reconciliation procedures – prevention instead of punishment
In a previous blog post, we reported that the data reconciliation procedure will be introduced as a new NAV process starting this year, making the operation of the tax authority more efficient and potentially helping law-abiding taxpayers. The tax authority hopes that this new procedure will further help curb the “black” (i.e. unrecorded and untaxed) economy. The aim of the new procedure is to ensure that businesses are informed of data discrepancies in time, giving them the opportunity to correct them before any potential compliance audits or tax inspections. we have discussed the necessity, operation, and details of the data reconciliation procedure in a previous article.
Data reconciliation procedures
Preliminary business partner checks remain of high importance
The tax authority is increasingly using advanced risk analysis methods, relying on algorithms and artificial intelligence to identify taxpayers attempting to gain unlawful tax advantages. These methods are based on the available data services, with particular emphasis on data from the online invoice reporting system.
NAV pays special attention to warning and requesting taxpayer to correct discrepancies found in the data submissions. This highlights the necessity for thorough preliminary business partner checks by taxpayers. This can prevent a business from engaging in risky business relationships.
Business partner due diligence
Key NAV tax inspection areas for 2025
The list of activities deemed risky by NAV continues to grow.
Each year, it seems that the list expands, as previous activities that have already been targeted by NAV are not removed from the list, but rather new ones are added.
As reported last year, the tax authority pays special attention to taxpayers engaged in certain economic activities in order to reduce budgetary risks.
This year, taxpayers engaged in the following activities can expect increased inspections:
- Used vehicle and vehicle parts trade, vehicle repair services
- Personal and property protection services
- Building management and cleaning companies
- Temporary labor agencies
- Trade in IT products
- Textile wholesale and retail
- Online platform sellers
- Wholesale of fruits and vegetables
- Suppliers and distributors of food industry and agricultural products
- Construction and building materials trade
- Tourism, hospitality, and accommodation services
- Taxi services
- Sellers of Far Eastern products
- Internet content providers
- Those earning income from regulated capital market transactions and cryptocurrencies
- Event organizers
- Advertising, marketing, and media service providers
- Providers of beauty, fitness, personal training, and massage services
- Taxpayers engaged in excise-taxable activities
Related undertakings, transfer pricing – heightened scrutiny
As was the case last year, within the inspection of high-performing taxpayers with the largest tax contributions, special attention will be given to the review of related companies and intercompany transactions. It is worth noting that our own experiences also support the fact that the tax authority has recently been focusing on examining companies' transfer pricing documentation and records.
Monitoring of fundamental discrepancies
It is well known that thanks to the advanced IT systems of NAV, the tax authority works with a huge influx of data. Therefore, discrepancies between tax returns and the available control data immediately become apparent, making the tax authority able to respond quickly.
These so-called deviant behaviors are specifically highlighted in the inspection plan. We will emphasize the most important ones,
Thus, in 2025, the tax authority’s interest may be piqued by:
- Companies that have been operating for several years based on shareholder loans.
- Companies that have been continuously carrying forward their deductible VAT from previous years.
- Companies submitting VAT returns with zero data (but reporting sales through online invoices/online cash registers).
- Newly established businesses that report large volumes of transactions or high-value invoices from the start.
- Taxpayers with discrepancies between their VAT returns, summary reports, and online invoice data.
- Taxpayers who fail to submit VAT returns.
Targeted risk-analysis
The Artificial Intelligence Task Force of NAV also assists inspectors in identifying taxpayers who may potentially be subjected to an inspection procedure. This allows the tax authority to uncover taxpayers’ economic networks and activities almost in real time. Since VAT remains a popular form of tax, NAV is increasingly able to quickly and effectively detect and prevent fraud schemes related to VAT.
Additionally, the tax authority pays special attention to discrepancies between data from online cash registers and VAT returns, tracking goods via the Electronic Public Road Goods Control System (EKR),as well as the core data, traffic, and other statistical information submitted by accommodation service providers, hospitality businesses, and tourism attractions through the National Tourism Data Provider Center (NTAK).
Inspection of indirect customs representatives
A new addition to the 2025 inspection plan is the inspection of indirect customs representatives. This is due to recent changes in legislation. Therefore, examining partner checks and utilizing the information provided on data submissions will be of special importance.
Focus on Trust Asset Management (BVK)
The inspection plan also reveals that this year, special attention must be given to those involved in trust asset management. In parallel, the tax authority has published a tax-related question on the topic.
The planned directions for 2025 in the field of customs
The tax authority will conduct customs inspections this year as part of the customs procedures, both before and after the release of goods, as well as in other cases. Similar to tax inspections, NAV primarily conducts targeted investigations in the field of customs, that being said it may also perform random checks on taxpayers also.
Due to e-commerce, the increased traffic at Liszt Ferenc International Airport will continue to grow this year, serving not only domestic demand but also customers from neighboring countries, This requires close international cooperation to oversee the process, aiming to support the legitimate commercial processes resulting from the EU VAT package, with proper risk analysis and customs inspections.
The primary goal of the inspections is to detect undeclared, customs-dutiable goods, or goods subject to bans and restrictions. To achieve this, the tax and customs authority uses technical tools (such as X-ray equipment) and service dogs.
In the post-checks of the titles financed by the European Agricultural Guarantee Fund (EAGF),NAV will continue to pay special attention to unauthorized claims, unlawfully operating beneficiaries, the implementation of financed investments, identifying fictitious economic events, and identifying the role of farmers involved in chains.
Inspections by NAV’s law enforcement division
This year, NAV continues to focus on detecting and preventing the theft of metals, as well as dismantling illegal trade. To achieve this, NAV, in cooperation with the waste management authority, has already organized joint inspections in 2024 using the new waste management (concessional) model. Based on previous trends, it can be concluded that short-term, regularly recurring actions organized and executed in cooperation with other authorities have a preventive effect, therefore these will continue in the future.
Another key task is the detection of intellectual property violations and related infringements, as well as the identification of illegal pharmaceuticals.
Additionally, the tax authority will pay special attention to protecting the interest of fair carriers, and will intensify inspections on companies that gain a competitive advantage by circumventing regulations.
Distillers will also receive focused attention in 2025. There will be heightened scrutiny to ensure that market participants do not violate excise tax regulations related to discounted tax rates. Therefore, distilleries involved in contract distilling can expect random excise audits throughout the
