Tax registration
The Hungarian tax number of taxpayers having company registration obligation can be determined after tax registration.
As part of this process, the National Tax and Customs Authority (HU TA) whether any statutory obstacles apply to the senior executives, members having right of representation, members or shareholders holding over 50 percent of the votes or having qualified majority influence of the company to be registered, which would exclude the determining of a tax number for the company by the tax authority.
The purpose of the tax registration procedure is to identify the market players the behaviour of which carried a risk from a tax authority perspective in the recent past. The main cause of failed tax registration can be if a former company of a member accumulated a substantial tax debt or ceased with a substantial tax debt or if the tax number of a member's former company was effectively cancelled after suspension.
Taxable entity
A taxable entity is a person or organization of legal capacity whose tax payment obligation is prescribed in the Act on Tax Procedure or other act relating to the given tax type or budget subsidy.
Tax ID
The tax ID is a ten-digit identification number provided by the state tax authority to private persons for the purpose of tax-related registration. HU TA issues the tax certificate in the form of an official card (which can be applied for on the form T34).
Tax certificate
Acting within its authority, the tax authority issues tax, income and residence certificates based on the data in its records and stating the conditions as of the date of issuing of the certificate with the data content requested by the taxpayer and prescribed by law, containing also the taxpayer's liability towards the tax authority, failures to comply with the taxpayers return filing and tax payment obligation and public debts.
Tax card
An official certificate issued by the tax authority contains the ten-digit tax ID of the private person certifying their registration for tax purposes (tax certificate).
Liabilities of newly-founded companies
1. Applying for a tax number at the court of registration. Applying for a Community tax number (if necessary).
2. On the form submitted to the court of registration, the company must also declare, in respect of value-added tax (VAT), among others, the following:
- opting for tax exemption,
- opting for taxability, i.e., VAT payment obligation in respect of the sale and letting of certain real estate,
- performing only tax-exempt activity with regard to the public interest nature and/or other special characteristics of the activity,
- opting for tax payment obligation in the case of an activity exempt from tax with regard to its special nature, or
- choosing a special method of tax assessment.
3. Within 5 days of its registration, the company must also initiate registration with the Chamber of Commerce and Industry of its seat. The easiest way to do this is through internet registration. The compulsory annual chamber membership fee is 5,000 forints.
4. Business associations are obliged to keep contact with the state electronically through the "Cégkapu" internet portal and send and receive documents using the official means of contact necessary for this purpose. After registering at "Cégkapu", the natural person authorized and registered at the company for this purpose ("Cégkapu" official) or further users registered by this person and authorized by the company for this purpose will be entitled to manage "Cégkapu" contacts.
5. The following has to be announced to HU TA:
- place of keeping documents, certificates and records available electronically if other than the registered seat,
- data of the operation permit relating to other activities actually performed,
- data of the operation permit relating to the main activity,
- data of the operation permit relating to the seat/establishment(s),
- data of the operation permit relating to the establishments not announced to the court of registration,
- method of formation,
- data of predecessor(s) in title,
- tax ID(s) or tax number(s) of the owner(s) of a joint venture,
- other branches of the foreign enterprise in Hungary,
- registration as a regulated real estate investment pre-company/company,
- announcement of project company of a regulated real estate investment pre-company/company,
- moving of the actual place of business management to abroad,
- announcement of the acquisition of an intangible asset entitling the taxpayer to royalty revenue,
- VPID applications.
6. Newly founded companies must prepare their accounting policy within 90 days of formation. As part of the accounting policy, the following regulations have to be prepared:
- inventory and stock-taking policy of assets and liabilities,
- asset and liability valuation policy,
- internal policy on direct cost calculation,
- cash management policy.
7. Basic information on the newly founded business organization must also be filed with the Central Statistics Office within 15 days of registration.
8. The starting date of local business tax payment obligation must be announced to the competent municipality within 15 days of formation on the form prescribed by the local municipality for this purpose.
Tax rate
Tax rate is the extent of tax determined as a percentage of the tax base.
Examples of tax rates applicable to some taxes introduced in Hungary:
- Personal income tax (PIT): 15 percent
- Corporate income tax: 9 percent
- Value added tax (VAT): 27 percent; 18 percent; 5 percent
- Social contribution tax: 17.5 percent
- Small business tax (KIVA): 12 percent
