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default penalty

In the case of non-compliance with certain tax obligations (e.g. registration or change announcement obligations),default penalty may be imposed as a sanction in an amount of up to 200 thousand forints on private person taxpayers and up to 500 thousand forints on other taxpayers unless, subject to the fulfilment of the obligation concerned, the taxpayer certifies the delay of fulfilment proving that it proceeded as generally expected under the given circumstances. 

Non-compliance with an obligation means its incorrect or incomplete fulfilment, its fulfilment by reporting untrue data content, late fulfilment of or failure to comply with the obligation.

Under special circumstances, default penalty may be imposed in an amount different from the amount under the above rules in, among others, the following cases: 

  • Default penalty may be imposed in an amount of up to one million forints (e.g. in the case of employment of non-registered employees, performing activities requiring a tax number or taxable activity without a tax number, non-compliance with the obligation to issue invoices or receipts or not issuing invoices or receipts on the actual consideration); 
  • Default penalty of up to 40 percent of the market value of the goods concerned but at least 200 thousand forints for natural person taxpayers and 500 thousand forints for non-natural person taxpayers may be imposed if the taxpayer sells goods of uncertified origin, fails to fulfil its EKÁER registration obligation or fulfils the EKÁER registration obligation with incomplete, incorrect or untrue data content; 
  • In the case of non-compliance with, late fulfilment, incomplete or incorrect fulfilment or fulfilment with untrue data of the data reporting obligation relating to the VAT aggregate report, the cap on the default penalty which may be imposed is the product of the number of invoices or documents in lieu of an invoice concerned and the highest rate of penalty which may otherwise be imposed on the taxpayer; 
  • Non-compliance with the documentation obligations relating to the determining of arm's lenght prices and to legal transactions with controlled foreign companies and non-compliance with the relating obligation to keep documents, a default penalty of up to two million forints may be imposed per documentation (consolidated documentation) or a default penalty of up to four million forints in the case of repeated non-compliance. In the case of repeated non-compliance with the obligation relating to the same documentation, default penalty of up to four times the penalty rate initially imposed may be charged to the taxpayer; 
  • If the taxpayer did not pay to at least ninety percent the amount of tax expected for the tax year until the due date (taking into account the amount of tax advance paid during the tax year),a default penalty of up to ten percent of the difference between the advance paid and ninety percent of the tax liability of the tax year is payable. 

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