Beside the fulfillment requirement of corporation income tax and trade tax, companies have also been subject to advance tax completion in connection with innovation contribution since 2012. Of course, it does not apply to everyone. But then whom does this apply to? It applies to those domestic and foreign entrepreneurs who use double-entry bookkeeping, their calculated annual income is more than 100 million HUF and on the basis of SME classification, the company has to pay advances on innovation contribution.
So those taxpayers are not subject to fulfillment whose income was less than 100 million HUF in the preceding tax year or if it reached 100 million HUF, but the company is not classified as a medium-sized enterprise.
What is the fulfillment deadline?
Innovation contribution shall be paid up to the expected amount of tax payable in the relevant tax year until the 20th of the last month of the calendar or fiscal year.
So if the company is in a normal business year, the deadline is December 20, 2013.
Pursuant to the law, the tax is deemed to be paid the date on which the account of the taxpayer has been debited by the financial institution (so it is not enough just to submit the transfer order). In case of a transfer from another type of tax, provided that there is enough collateral, the payment date is deemed to be the date of filing of this application.
How much innovation contribution shall be paid?
The amount paid shall be equal to the expected annual tax liability, which shall be estimated by the taxpayer based on the available data.
What are the consequences of inadequate fulfillment?
The Act on the Rules of Taxation requires paying default penalty in case the advance tax is not or inadequately fulfilled. Default penalty can be imposed if the payment is less than 90 percent. The rate of default penalty can take up to 20% of the difference between tha advance paid and 90% of the tax. It is important to know that there is no upper limit for the mount of penalty, it is only limited in 20% of the penalty base and even is the penalty is of low value, it is still imposed by the Tax Office.
Those who do not meet the fulfilling requirements will be fully fined by the tax authority, of which taxpayers will receive a resolution and a penalty shall be paid within 15 days. If it is not met, late payment penalty will also be imposed on the taxpayer.