Grant Thornton Hungary Newsletter
Postponed deadline for the filing of corporate income tax returns and payments
As we reported in our earlier newsletter, taxpayers may postpone the filing of returns and the payment of annual tax returns for 2019 (e.g. corporate income tax, local business tax, innovation contribution) until 30 September 2020. It is not necessary to notify the tax authority when choosing this postponement option; however, there are a number of questions arising in connection with the interpretation of the provisions. With a view to these uncertainties, both Norbert Izer, state secretary responsible for tax affairs and the National Tax and Customs Administration itself issued some clarifications. In our experience, the following practical questions are the most relevant for our clients.
- On the basis of the information provided by the state secretary, the postponement of the deadlines overwrites all adverse legal consequences, which means that the tax authority may not impose any default penalty or late payment surcharge until 30 September 2020. In our interpretation, this also implies that a taxpayer whose tax year corresponds to calendar year may decide to file its corporate income tax returns by 31 May 2020 (actually, due to Pentecost/Whit Monday, i.e. 2 June), but only pays the related tax liabilities by 30 September 2020.
- In case of using the option to file the returns later, attention should also be paid to the fact that the tax authority pays the amount of the tax refund within 30 days after the date of receipt of the filing, but not earlier than 30 days after the original tax return due date (2 June 2020 in case of calendar year taxpayers). Therefore, if such a taxpayer has refundable tax in connection with the filing of the annual tax returns and would like to receive this tax refund as soon as possible, it is recommended to file the returns by the “usual” deadline (i.e. 2 June in this year).
- On the basis of our consultations with the Ministry of Finance, in the period between July and September 2020, taxpayers using the option of postponed returns filing must continue paying the tax advances established in their last available tax returns (in the same amount and according to the same schedule). For example, a taxpayer required to pay monthly advances on the corporate income tax that chooses not to file its tax returns for 2019 by 2 June, must continue to pay the tax advances determined in their tax returns no. 1829 (as paid monthly in the first half of 2020) by the 20th day of the month between July and September 2020. At the same time, it is also possible to request a reduction of these monthly tax advances.
- Finally, we would like to note that the deadline for the preparation of the transfer pricing documentations on related party transactions of 2019 is also postponed until 30 September 2020.
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