“We have been among the frontrunners in the tax reduction competition between the member states of the European Union for over three years. Today’s Tax Consultation could help to ensure that in a few years’ time we also realise similar results within the field of reducing tax administration”, the Ministry of Finance’s State Secretary for Taxation Norbert Izer declared following the Tax Consultation.
“Also discussed at Hungary’s most important tax profession forum was the fact that within a few years’ time the Tax Office will be providing an increasing number of services to assist enterprises that may be exemplary even at international level”, the State Secretary added.
“Hungary has won several accolades within the field of taxation in recent years. In 2018, Hungary became the European Union’s greatest reducer of tax. In addition to last year’s silver medal, Hungary also made huge strides on the World Bank’s tax evaluation list, moving up almost thirty places. Our tax policy is also reaping rewards in view of the fact that since 2018 Hungary has been among the world’s top ten investment destinations”, Mr. Izer pointed out. “The results could improve even further if we significantly reduce tax administration”, he underlined.
“The large international organisations also monitor the bureaucratic burdens relating to taxation. According to their analyses, the greatest burdens are related to employment and to consumer tax (VAT). In addition to having to prepare tax returns and provide data, the collection of information also represents a significant amount of time and expense for all enterprises, from microenterprises to large corporations”, Mr. Izer detailed.
“One of the government’s most important goals when it introduced online invoices from 1 July 2018 was to place the online instruments of the Tax Office directly into the service of taxpayers”, the State Secretary emphasised. As he explained, these instruments have generated hundreds of billions of forints in revenues for the treasury to date and have assured fair market competition, and within a few years it will be precisely these kinds of electronic services that could create the conditions for the Hungarian Tax and Customs Office (NAV) to prepare draft VAT tax returns. “During the development of the so-called e-VAT interface, simple and quick use are of key importance, as is the fact that both draft and submitted returns will be available or a period of seven years, enabling the simpler self-monitoring or correction of the VAT system. In addition to invoice data, the system also enables totalising according to tax level or exemption”, he stressed.
The State Secretary also drew attention to the fact that from 1 January 2021 the data of all invoices must be submitted to the Tax Office online, which is vital to enabling the provision of draft VAT returns. “According to the Ministry of Finance, five percent of enterprises manage practically all of their tax affairs on paper, including the issuing of invoices and receipts. Another Tax Office service offers enterprises that use invoice books an alternative that makes it worthwhile for everyone affected to switch to online invoicing. The NAV’s unique tax office service, an online invoicing app that is available by mobile phone, could already become available this year”, Mr. Izer announced. “The details will be presented by representatives of the Tax Office. According to the NAV, invoices can be issued extremely simply, with just a few clicks, using the software it has developed. The service will be totally free of charge, and in addition to Hungarian will also be available in English and German”, he told the press.
Administration relating to employment was also discussed at the Tax Consultation. In practice, this usually means the provision of ten data reports to the Tax Office and various other organisations on the part of the enterprise, for instance to the Central Statistical Office or the Hungarian State Treasury. The goal here is also to require the provision of as little data as possible from enterprises, and in return to create an online employment portal that will radically reduce bureaucratic burdens”, the State Secretary said with relation to the direction for development.
“The usefulness of the Tax Consultation, which was convened for the third time today, and was attended by tax advisory companies and organisations, and accountants, with a large number of clients and major experience, is unquestionable”, Mr. Izer underlined. “Based on their practical experience, the participants put forward a host of ideas and recommendations. Accordingly, in addition to making taxation significantly easier for Hungarian enterprises, the three new services being developed by the Tax Office could become a model that is copied throughout the world, and could also help Hungary win the title of the EU’s greatest reducer of tax administration within a few years”, he explained.
Also discussed at the Tax Consultation was the itemized tax for small business (KATA). According to the participants, the goal of this form of taxation must be kept in focus, meaning that the KATA is aimed at making life easier for small businesses, but should not be used as an alternative to contractual employment. In view of the fact that almost one in every three enterprises now use this form of taxation or the small business tax (KIVA), this will be the topic of the next Tax Consultation, which is expected to convene in early March.
(Ministry of Finance)
