Rules of payment facilities

The appearance of the coronavirus creates unexpected financial difficulties for taxpayers. We will highlight the government measures which were introduced on 18 March 2020 in a separate newsletter later when the government decrees containing the detailed rules are published. The purpose of this newsletter however is to draw your attention that besides the government measures there are other possibilities to alleviate the financial constraints by submission of an application for payment facilities based on the Act on the Rules of Taxation. According to the announcement published by the Hungarian tax authority (hereinafter referred to as “HTA”) on 20 March 2020 they will consider the economic difficulties caused by coronavirus when they appraise the requests.

According to the general rules deferred payment and and instalment payment (hereinafter referred to as “payment facilities”) may be granted upon the request of the taxpayer if

• the applicant is unable to pay the tax debt in a lumpsum due to financial difficulties and
• the payment difficulty has temporary nature (i.e. the payment of the tax later is evident) furthermore,
• the payment difficulty cannot be attributed to the applicant or they have taken every reasonable measure to prevent it.

Based on the announcement of the HTA the payment difficulty caused by coronavirus epidemic is an objective circumstance which is not attributable to the taxpayer. Consequently, the HTA may grant deferred payment, instalment payment or the combination of these (instalment payment after deferred payment) without extra charges upon request of the taxpayer. Furthermore, in case taxpayers are unable to fulfill payment facilitation already in progress they may request rescheduling of their debt based on this reason.

In case deferred payment, instalment payment is requested by reliable taxpayer and the net tax debt does not exceed HUF 1.500.000 at the time of examination of the application, the HTA may grant payment facilities (hereinafter referred to as „automatic payment facilities”) without extra charges for up to twelve months, once a year without examining the fulfilment of the above general requirements. In this case the request is assessed more quickly, within 15 days of receipt of the application.

If the reliable taxpayer does not meet the requirements of automatic payment facilities the HTA assesses the application based on the general rules, however the reliable taxpayer
entitled to submit an application for processing the case in an urgency procedure, which administration time limit is 15 days.

Although tax reduction may be granted for natural persons, the HTA may reduce or cancel the surcharge or penalty if payment would make impossible for legal persons or organizations to continue their business operation.

During examination of the application the tax authority considers the data included in the request, available ex officio and may call the applicant to make a statement or to substantiate the application.

The application should be submitted to the regionally competent directorate of the HTA, however the request for automatic payment facilities may be filed only electronically. The procedural duty is HUF 10.000.

This document can be downloaded in PDF format by clicking on this link: Rules of payment facilities