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Tax payment and Hungarian Instant Payment system

The Hungarian Instant Payment system, which will apply to B2B transfers and payments made to the tax authority as well, has been launched on 2 March, 2020. It is important that only payments between Hungarian HUF accounts are going to be instant; the change will not affect accounts in any other currency.

In the case of tax liabilities, the payment obligation is often tied to the tax return submission deadline. Since non-working days have to be ignored when calculating the deadline for the submission of returns (as well as the relevant payments),the deadline is always moved to the next business day. For example, if the deadline for the submission or payment falls on a Saturday, the submission and payment obligations both only have to be fulfilled on Monday. 

The general rules applicable to an administrative deadline will not change either; therefore, the tax and fee payments not associated with the submission of returns will not be affected by the introduction of the instant payment system either. 

It is going to be advantageous for companies that after 2 March 2020, transfers initiated in the afternoon or even in the evening are guaranteed to arrive on the same day, as opposed to the earlier system, which could serve as an obstacle for applying for certain tax benefits. Another advantage is that the ‘no tax payable’ certificates will be able to be issued immediately after the outstanding amounts are paid.

The planned schedule for introducing the instant payment system

The instant payment system is planned to be introduced in three steps. 

First, the instant payment system become live for all individual electronically initiated domestic transfers with a value of at most HUF 10 million, in the case of Hungarian HUF accounts, on 2 March. 

Not scheduled and not bulk company payments are also added to the instant payment system. With the instant payment system, transfer orders can be sent and received 24 hours a day, every day of the week, including weekends and public holidays.

In accordance with the applicable legislation, the sending and receiving banks will each have 5 seconds to process the transaction. The account holder who initiated the transaction will receive confirmation if the transfer is successful. If the transaction is not performed successfully within 20 seconds, it is automatically rejected, of which the bank is obliged to notify the customer automatically. 

It is recommended to pay attention to the following:

  • How transactions that cannot be fulfilled due to a lack of funds are handled can differ from bank to bank; some delete them from the system, some might queue them up for a time - it is recommended to look into this on a case by case basis.
  • If a company is paying wages using group payment, it is worth noting that these are not going to be subject to the instant payment system for now; the rules for 24-hour payments will continue to apply. 
  • The instant payment system is not going to apply to B2B bulk payments either; it is only going to handle individually initiated transactions for now.
  • The instant payment system is not going to affect foreign currency accounts in EUR, USD, CHF, or any other non-HUF currency.  

As part of the second step, B2B bulk payments, scheduled payments, and direct debit payments are going to be included in the scope of the instant payment system from 1 September onwards.

Thus, if wages are paid as a group payment, they are going to be subject to the instant payment system only after this deadline.  

As the third step, according to the plans, the instant payment system will serve as an alternative to cash payments in every situation within a few years.

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