The advantages of being classified as a reliable taxpayer

Yesterday, we talked about the taxpayer classification, and we saw the conditions to be a reliable taxpayer. Why is good for us to be a reliable taxpayer? We will have a look on the advantages of being classified as a reliable taxpayer.

As we mentioned it previously; the purpose of taxpayer classification is to provide taxpayers settling their tax liabilities voluntarily and in time should enjoy certain advantages; specified by law, relative to non-compliant taxpayers who are thus subject to certain stricter rules. We will summarize the most important information (trying not to be lost in the details) and if you need any help; we are here to help you.

The purpose of the legal consequences linked to the reliable classification is to provide benefits for those who fulfilled their taxation obligations in time.

The advantages attached to the reliable classification:

1. The duration of the Tax Authority’s inspection cannot exceed 180 days if the taxpayer is continuously classified as reliable during such period.

2. Reduced penalty for omission.

3. Decreased excise penalty.

4. Minimized tax penalty.

The tax penalty; if the taxpayer was classified as a reliable taxpayer during the whole of the tax assessment period under tax inspection; or on the date of the protocol on the findings of the tax inspection; 50% of the tax penalty that can be charged under the general rules; that is, 25% of the tax deficit; instead of the general rate of 50%.

5. Automatic payment facility.

A reliable taxpayer has the option; if their net tax debt does not exceed three million forints at the time of the assessment of the application concerned; to apply for a payment facility of 12 months for the tax debt once a year without having to pay a surcharge on the debt. Failing to pay the due instalments the benefit will lapse; and the debt will fall due in a lump sum on which the Tax Authority will levy a late performance charge for the period starting from the original due date. The Tax Authority makes and delivers its decision electronically on the application within 15 days of its receipt. If the reliable taxpayer does not meet the criteria relating to the automatic payment facility; their application will be determined by the Tax Authority in accordance with the applicable general rules.

6. Reduction of the time limits for disbursement.

The value added tax for the refunding of which a reliable taxpayer – not including a public limited company – has submitted an application will be disbursed by the Tax Authority within 30 days. The value added tax for the refunding of which a public limited company has submitted an application will be disbursed by the Tax Authority within 20 days.

Sources:

1. évi CLI. törvény az adóigazgatási rendtartásról (Air.)
2. évi CL. törvény az adózás rendjéről (Art.)
3. 465/2017. (XII. 28.) Korm. rendelet az adóigazgatási eljárás részletszabályairól (Rendelet)
4. https://nav.gov.hu/pfile/file?path=/en/taxation/Booklets/71-information-on-taxpayer-classification-13.01.2022