Tax law

1. Tax Compliance Inspection What is a tax compliance inspection? A tax compliance inspection is a procedure carried out by the Hungarian Tax and Customs Administration (NAV) to examine whether a taxpayer has properly complied with its tax-related obligations. The inspection may cover, among other things, the proper assessment, reporting and payment of taxes, as well as the accuracy and substance of information relevant to the taxpayer’s obligations. How does a tax compliance inspection work? A tax compliance inspection begins when the NAV authorisation for the inspection is served, delivered or made available electronically. During the procedure, NAV may request documents and information, review the taxpayer’s records and tax returns, compare reported information with data available to the tax authority, and examine the substance and authenticity of particular business transactions. NAV may also obtain information from third parties where necessary. How long does a tax compliance inspection take? The statutory time limit for a tax compliance inspection is generally 30 days, calculated from the service, delivery or electronic placement of the authorisation. Certain statutory rules may provide for different or extended time limits. Why might NAV start a tax compliance inspection? A tax compliance inspection may arise from NAV risk analysis or discrepancies identified in information available to the tax authority. Examples may include inconsistencies between tax returns and NAV data, problems concerning employment-related reporting, discrepancies in invoicing or VAT information, or questions concerning the reality of particular business transactions. NAV may also initiate an inspection following an earlier data-reconciliation or compliance process. Can a tax compliance inspection concern individuals as well as companies? Yes. A tax compliance inspection is not limited to companies. Depending on the circumstances, NAV may also examine the tax compliance of individual taxpayers. Can mistakes be corrected during a tax compliance inspection? In appropriate cases, taxpayers may still have an opportunity to correct errors, submit missing returns or make a self-revision of previously submitted tax returns. The exact possibilities depend on the subject matter and stage of the procedure. NAV itself confirms that the correction of identified deficiencies and self-revision may be possible in a tax compliance inspection. What can happen after a tax compliance inspection? The procedure is generally closed by a report. Depending on the findings, NAV may identify deficiencies requiring correction or the submission of missing information or returns. In certain cases, further tax authority proceedings, including a tax audit, may follow. Why seek legal assistance during a NAV tax compliance inspection? A NAV inspection is not simply a matter of collecting documents. It is important to understand exactly what NAV is examining, what information should be provided, and what legal and tax risks may arise from the documents and statements submitted during the procedure. Dr. Gábor Major, as a Hungarian tax lawyer with previous professional experience at NAV, provides legal assistance in tax compliance inspections, including preparation for the inspection, assessment of NAV requests, review of relevant documentation, communication with the tax authority, and evaluation of the legal risks arising from the procedure. The aim is to identify potential risks at an early stage and help clients take lawful and appropriate steps to protect their interests. If your company or you as an individual have received a notice from NAV concerning a tax compliance inspection, it is advisable to have the matter reviewed by a lawyer as early as possible.

2. Tax Law Advice What is tax law advice? Tax law advice helps individuals and businesses understand their rights and obligations under Hungarian tax law and make legally sound decisions in tax-related matters. Hungarian tax rules can be complex and change frequently, making up-to-date legal knowledge and practical experience particularly important. What does tax law advice cover? We provide legal advice on tax-related matters to individuals and businesses operating in Hungary. Our assistance may include interpreting tax rules, identifying potential tax risks, reviewing the legal and tax implications of transactions and business decisions, and preparing clients for proceedings before the Hungarian Tax and Customs Administration (NAV). When might a business need tax law advice? Legal tax advice can be particularly important when a company starts a new business activity, enters into a significant transaction, restructures its operations, enters into a contractual arrangement with tax implications, or faces uncertainty regarding its tax obligations. It can also be important when NAV requests information, starts a compliance inspection or tax audit, identifies discrepancies in tax-related data, or raises questions concerning the company's tax position. Can a lawyer help with tax matters involving NAV? Yes. Legal assistance can be useful when dealing with NAV because the issue may involve not only tax rules, but also procedural, corporate or contractual questions. We assist clients in understanding NAV requests and decisions, reviewing relevant documentation, assessing the legal position of the taxpayer and determining the appropriate next steps. What tax-related matters do we handle? Our services include, among other things, tax law advice, representation before NAV, tax compliance inspections, tax audits, matters concerning the cancellation of tax numbers, and the assessment of legal remedies against tax authority decisions. We also advise businesses where tax issues are connected with company law, corporate transactions, economic activities or other areas of business law. Why is practical experience important in tax matters? Tax law is not only about reading legislation. The practical interpretation and application of tax rules by the tax authority can also be highly relevant in a particular case. Dr. Gábor Major is a Hungarian tax lawyer with previous professional experience at NAV. He provides legal assistance based on both knowledge of Hungarian tax law and practical experience with tax authority procedures. The aim is to identify potential risks at an early stage and help clients make informed decisions before a tax-related problem develops into a more serious dispute or tax authority proceeding. When should you seek legal advice? It is often advisable to obtain legal advice before taking an important tax-related step, but legal assistance can also be valuable once a question or dispute has already arisen. If you have a tax-related question in Hungary or have received a communication from NAV, we can review the circumstances of your case and advise you on the available legal options.

3. Liquidation Proceedings What are liquidation proceedings in Hungary? Liquidation proceedings are a legal procedure intended to address the insolvency of a company and, where the statutory conditions are met, to bring about the termination of the company without legal succession while protecting the interests of its creditors. In Hungary, liquidation proceedings are governed primarily by Act XLIX of 1991 on Bankruptcy and Liquidation Proceedings. When can liquidation proceedings be initiated against a company? Liquidation proceedings may arise when a company is unable to meet its financial obligations and the statutory conditions for liquidation are fulfilled. Depending on the circumstances, the proceedings may be initiated by the debtor or a creditor. Because the legal requirements are specific, it is important to assess the company's financial and legal position before taking further action. What should a company do if a liquidation petition has been filed against it? Receiving a liquidation petition is a serious legal matter, but it does not in itself mean that the company's liquidation has already been ordered. The company should promptly review the claim on which the petition is based, the underlying documents, the amount and due date of the alleged debt, and whether there are grounds on which the petition can be challenged or the situation otherwise resolved. What can a creditor do if a Hungarian company owes money? A creditor may have the option of initiating liquidation proceedings where the statutory requirements are satisfied. Before taking this step, it is important to establish the claim properly, review the available evidence and determine whether liquidation proceedings are the appropriate legal route for recovering the debt. How can a creditor protect its claim in liquidation proceedings? Once liquidation proceedings have been opened, creditors may need to register their claims within the applicable statutory framework and time limits. The Hungarian insolvency register contains information including the opening of the proceedings, the court involved, the debtor, the insolvency practitioner and the applicable deadline for lodging claims. For this reason, creditors should review the relevant documents and deadlines as soon as they become aware of the liquidation proceedings. What happens to the company during liquidation proceedings? The liquidation process involves the company's assets and liabilities being dealt with under the applicable legal framework. The insolvency practitioner, or liquidator, has an important role in administering the proceedings and dealing with creditor claims and the debtor's assets. The specific legal consequences depend on the stage and circumstances of the proceedings. Can liquidation proceedings be challenged or stopped? The available legal options depend on the circumstances of the case, including the basis of the liquidation petition, the company's financial position and the procedural stage reached. A company that receives a liquidation petition should therefore obtain legal advice promptly rather than assuming that liquidation is inevitable. What legal assistance is available in liquidation matters? Liquidation proceedings can involve significant legal and financial consequences for both companies and creditors. Legal assistance can include reviewing the basis of the proceedings, assessing the rights and obligations of the parties, preparing the necessary legal submissions, dealing with creditor claims and representing the client in the relevant proceedings. Dr. Gábor Major and his law firm provide legal assistance in Hungarian liquidation matters, including advice to companies facing a liquidation petition and assistance to creditors seeking to enforce claims against a Hungarian company. Our approach is to assess the legal and factual circumstances of the case at an early stage and identify the available legal options. If your company is facing liquidation proceedings in Hungary, or you are a creditor seeking to enforce a claim against a Hungarian company, it is advisable to obtain legal advice as early as possible.

4. Tax Audit What is a tax audit in Hungary? A tax audit is a formal procedure carried out by the Hungarian Tax and Customs Administration (NAV) to examine whether a taxpayer has properly fulfilled its tax-related obligations for a particular tax, period or group of taxes. A tax audit may examine the taxpayer's tax assessment, reporting and filing obligations and, where applicable, the tax or budgetary support claimed by the taxpayer. How does a NAV tax audit begin? A NAV tax audit begins when the relevant authorisation is served, delivered or made available electronically. From that point, the taxpayer must cooperate with the tax authority and provide the documents, information and other evidence required for the audit. The precise scope of the audit depends on the authorisation and the circumstances of the individual case. What can NAV examine during a tax audit? Depending on the scope of the audit, NAV may examine tax returns, accounting and bookkeeping records, invoices, contracts, supporting documents and other information relevant to the taxpayer's tax obligations. The tax authority may also compare information reported by the taxpayer with data available to NAV from other sources. How long does a tax audit take in Hungary? The general statutory deadline for a tax audit is 90 days. A 120-day deadline applies in certain cases, including audits involving taxpayers with the largest tax performance and certain centralised audits. The law also provides for specific maximum periods and circumstances in which the audit deadline may be extended. Because the applicable deadline depends on the type of taxpayer and the circumstances of the procedure, the exact time limit should always be checked in the individual case. Can I submit a self-revision during a NAV tax audit? Once an audit has started, the taxpayer generally cannot use self-revision to change the tax or period that is the subject of the audit. NAV's guidance confirms that self-revision can no longer be submitted for the tax and period under examination after the audit has commenced. This is one reason why it can be important to review potential corrections and self-revision issues before an audit formally begins. What should a company do after receiving a NAV tax audit notice? The first step should be to review the NAV notice and authorisation carefully and determine exactly what is being examined. It is important to identify the relevant tax, period and documents requested by NAV and to assess the company's legal position before making substantive statements or submitting documents. What happens at the end of a tax audit? The findings of the audit are recorded by NAV in an audit report. Depending on the findings, the subsequent procedure may involve a decision concerning additional tax liabilities and other legal consequences. The taxpayer may have the right to make observations and, depending on the decision and the applicable procedure, to pursue further legal remedies. What can be the consequences of a NAV tax audit? The consequences depend on the findings of the individual audit. NAV may establish an additional tax liability, and depending on the circumstances, tax penalties, late-payment interest or other consequences may arise. For this reason, the legal and factual basis of NAV's findings should be reviewed carefully. Can a lawyer represent my company during a NAV tax audit? Legal representation may be available in proceedings before NAV, subject to the applicable procedural rules and the appropriate authorisation. A lawyer can assist with reviewing the scope of the audit, assessing documents and evidence, preparing written submissions and observations, communicating with NAV and evaluating the legal consequences of the authority's findings. Why seek legal assistance during a NAV tax audit? A tax audit is not simply an exercise in submitting documents. The way information, documents and explanations are presented to the tax authority can be important to the assessment of the case. Dr. Gábor Major is a Hungarian tax lawyer with previous professional experience at NAV. He provides legal assistance to businesses in NAV tax audits, including preparation for the audit, review of documents and legal issues, communication with the tax authority and assessment of the available legal options. If your company has received a NAV tax audit notice or is already subject to a tax audit, it is advisable to review the situation with a lawyer as early as possible.

4. Tax Audit What is a tax audit in Hungary? A tax audit is a formal procedure carried out by the Hungarian Tax and Customs Administration (NAV) to examine whether a taxpayer has properly fulfilled its tax-related obligations for a particular tax, period or group of taxes. A tax audit may examine the taxpayer's tax assessment, reporting and filing obligations and, where applicable, the tax or budgetary support claimed by the taxpayer. How does a NAV tax audit begin? A NAV tax audit begins when the relevant authorisation is served, delivered or made available electronically. From that point, the taxpayer must cooperate with the tax authority and provide the documents, information and other evidence required for the audit. The precise scope of the audit depends on the authorisation and the circumstances of the individual case. What can NAV examine during a tax audit? Depending on the scope of the audit, NAV may examine tax returns, accounting and bookkeeping records, invoices, contracts, supporting documents and other information relevant to the taxpayer's tax obligations. The tax authority may also compare information reported by the taxpayer with data available to NAV from other sources. How long does a tax audit take in Hungary? The general statutory deadline for a tax audit is 90 days. A 120-day deadline applies in certain cases, including audits involving taxpayers with the largest tax performance and certain centralised audits. The law also provides for specific maximum periods and circumstances in which the audit deadline may be extended. Because the applicable deadline depends on the type of taxpayer and the circumstances of the procedure, the exact time limit should always be checked in the individual case. Can I submit a self-revision during a NAV tax audit? Once an audit has started, the taxpayer generally cannot use self-revision to change the tax or period that is the subject of the audit. NAV's guidance confirms that self-revision can no longer be submitted for the tax and period under examination after the audit has commenced. This is one reason why it can be important to review potential corrections and self-revision issues before an audit formally begins. What should a company do after receiving a NAV tax audit notice? The first step should be to review the NAV notice and authorisation carefully and determine exactly what is being examined. It is important to identify the relevant tax, period and documents requested by NAV and to assess the company's legal position before making substantive statements or submitting documents. What happens at the end of a tax audit? The findings of the audit are recorded by NAV in an audit report. Depending on the findings, the subsequent procedure may involve a decision concerning additional tax liabilities and other legal consequences. The taxpayer may have the right to make observations and, depending on the decision and the applicable procedure, to pursue further legal remedies. What can be the consequences of a NAV tax audit? The consequences depend on the findings of the individual audit. NAV may establish an additional tax liability, and depending on the circumstances, tax penalties, late-payment interest or other consequences may arise. For this reason, the legal and factual basis of NAV's findings should be reviewed carefully. Can a lawyer represent my company during a NAV tax audit? Legal representation may be available in proceedings before NAV, subject to the applicable procedural rules and the appropriate authorisation. A lawyer can assist with reviewing the scope of the audit, assessing documents and evidence, preparing written submissions and observations, communicating with NAV and evaluating the legal consequences of the authority's findings. Why seek legal assistance during a NAV tax audit? A tax audit is not simply an exercise in submitting documents. The way information, documents and explanations are presented to the tax authority can be important to the assessment of the case. Dr. Gábor Major is a Hungarian tax lawyer with previous professional experience at NAV. He provides legal assistance to businesses in NAV tax audits, including preparation for the audit, review of documents and legal issues, communication with the tax authority and assessment of the available legal options. If your company has received a NAV tax audit notice or is already subject to a tax audit, it is advisable to review the situation with a lawyer as early as possible.