Corporate and business tax payments in 2014
As in previous years, some companies will be required to supplement corporate income tax and business tax this year as well. For tax purposes, December 20 is a highly critical date. Without assessment or human intervention, one of the largest penalties will be imposed on inappropriately paid taxes.
One of the most controversial points of the tax supplement requirement is that tax shall be paid on the expected tax base, which in many cases can only be a strong estimate. Therefore, before calculating the tax, close cooperation between the company management and the accounting is a top priority.
The most important information in this regard are as follows:
Corporate income tax
Who is obliged to supplement it?
For domestic and foreign entrepreneurs who use double-entry bookkeeping, if their annual net turnover exceeded 100 million HUF in the tax year preceding the current year –the corporate tax advance shall be supplemented to the amount of expected payable tax until the 20th the last month of the calendar or financial year. So taxpayers whose turnover in the previous fiscal year did not exceed 100 million HUF are not subject to completing CIT.
Business tax
Who is obliged to supplement it?
For domestic and foreign entrepreneurs who use double-entry bookkeeping and has a corporate income tax supplement obligation as described above at corporate income tax supplement, tax advance shall be supplemented to the amount of expected payable tax until the 20th of the last month of the calendar or financial year.
Those who are not required to supplement corporate income tax advance shall not supplement business tax advance either.
In respect of both types of tax:
What is the deadline for tax payments and returns?
The deadline for tax supplements and returns if the fiscal year is the same as the calendar year: December 22, 2014.
Pursuant to the law, a tax is deemed to have been paid on the day when the financial institution debits the taxpayer’s bank account (so it is not enough just to submit the transfer order, it shall be completed as well). If the tax is posted from another tax category – if the collateral is provided – the filing of the relevant application shall be regarded as payment date.
What are the consequences of inadequate supplement?
The law on taxation imposes a default penalty on tax advances not or inadequately supplemented. Expected annual tax shall be supplemented to 100%, but default penalty can be imposed only if it is supplemented to less than 90%. The expected amount of tax shall be estimated by the taxpayer based on all present information.
The rate of default penalties can be up to 20% of the difference between the advance tax paid and 90% of the tax. There is no upper limit to the amount of the penalty: it is limited to only 20% of the penalty base and the penalty established will be imposed even in case of a minimum value.
