The dark side of being classified as a risky taxpayer

The past few days we talked about the taxpayer classification a lot. We had a look on the classification and saw the advantages of being a reliable taxpayer. Today, we continue this theme because where is reliable taxpayer, there is of course risky taxpayer. So, today’s article is about the risky taxpayer. First of all, we will check the criteria for classification as risky taxpayer and after we check the disadvantages and the legal consequences.

 The Tax Authority classifies taxpayers listed in the trade register and VAT-registered taxpayers not under liquidation or winding up,

meeting at least one of the following criteria, as risky taxpayers:

1. It is included in the public list of taxpayers with large amounts of tax deficit.

2. It is included in the public list of taxpayers with large amounts of tax debt.

In order to be included in the public list of taxpayers with a large amounts of tax debt, as a legal entity, we must have a net tax debt of at least HUF 100.000.000, which must be maintained for 180 days. As a natural person, the amount of tax debt has to be at least HUF 10.000.000.

3. It is included in the public list of taxpayers employing undeclared employees.

4. It has been ordered by the Tax Authority to close its store repeatedly within the past year.

The Tax Authority may apply this restrictive measure for 12 business days for the first time, for example, if we employ or previously employed an undeclared employee.

5. It is under the involuntary deregistration proceedings.
6. The amount of the tax difference established by the Tax Authority as a liability of the taxpayer during the year concerned and the preceding five years exceeds seventy percent of the taxpayer’s tax performance for the year concerned, providing that the total amount of the tax difference established as a liability of the taxpayer must be reduced by the amount of the total tax difference established by the Tax Authority as an amount to the taxpayer’s credit during the year concerned and the preceding five years.
7. The amount charged by the Tax Authority to the taxpayer in the way of default penalty that fell due during the last two years preceding the year concerned, including excise penalties, exceeds seventy percent of the taxpayer’s tax performance established for the year concerned.
8. Its seat is registered with the address of a person authorised to accept service and it has been charged a procedural penalty that has become definitive because of obstructing the tax administration proceeding, during the year concerned or in the last three years preceding it.

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