Companies keeping double-entry books and registered in the register of companies shall deposit and publish the financial statements. The relevant regulations are contained in Subsection (1) of Section 153 of Act C of 2000 on Accounting.
What happens if the financial statements are not published or are published late?
The relevant sanctions are set out in Section 227 of Act CL of 2017 on the Rules of Taxation.
The act establishes a precise, clear order of for the application of sanctions and does not investigate at all the reasons for non-compliance.
- In the event of non-compliance with the obligation of depositing and publishing the financial statements, the Hungarian tax authority shall call the taxpayer to comply with his obligation within 30 days.
- In the case the taxpayer fails to comply with his obligation within the time limit determined in the call, the tax authority shall impose a default penalty of HUF 200,000, and repeatedly call the taxpayer to comply with his obligation within 30 days.
- If the taxpayer fails to comply with his obligation of depositing and publishing the financial statements within the time limit determined in the repeated call, the tax authority shall ex officio withdraw the taxpayer’s tax number, immediately notify the registry court by way of electronic means, and initiate to have the company declared terminated.
- If the taxpayer complies with his obligation of depositing and publishing the financial statements before the resolution on the withdrawal of his tax number becomes final, the withdrawal of the tax number shall not apply.
Withdrawing the taxpayer’s tax number can have other serious tax consequences, such as
- with an invalid tax number, it is not possible to exercise the right to deduct VAT
- without a valid tax number, the company may not carry out economic activities
- consequently, the company cannot issue or receive invoices.
It is therefore very important that no companies should wait until the resolution on the withdrawal of their tax number becomes final.
