TAX SUPPLEMENT LIABILITIES
This is to inform you that by 20th December taxpayers must supplement the
- advance corporate tax
- advance innovation contribution
- advance local business tax
up to the amount of the expected annual tax liabilities. The tax declaration and tax payment obligations must be fulfilled by the above deadline.
Who are exempted?
These taxpayers are exempted from the duty to supplement the advance corporate tax and the advance local business tax:
- whose annual sales income in the tax year preceding the current tax year did not exceed MHUF 100;
- upon termination;
- if the returns are filed on account of the completion of the company registration procedure (pre-company period)
- non-profit companies, foundations, and public trusts
IMPORTANT! All taxpayers, who are subject to innovation contribution are obliged to supplement this type of tax!
From the innovation contribution supplementation taxpayers cannot be exempted, not even those, who could be exempted from the duty to supplement the advance corporate tax and the advance local business tax (for example based on previous year’s sales revenue figures).
Steps to follow:
- Preparing a mid-year report, dated as the 30th of November.
- During the data calculation of December please pay attention to include all income, cost and expenditure figures of December and the business year of 01.01.2014-31.12.2014, regardless of financial performance (e.g. revenue or cost to be invoiced in 2015 concerning the year 2014), and the year end revaluation.
- Please be informed, that according to the Act on Corporate Tax, if the higher of the taxpayer’s profit before taxation or tax base is less than the 2% of the adjusted amount of the total income, the taxpayer must decide whether to submit a supplementary form to the tax return or to calculate the corporate tax on the basis of the 2% of the adjusted total income, that is, the profit minimum.
Adjusted total income:
+ Total income
- Purchase value of goods sold
- Value of mediated services sold
+ 50 % of the sum by which the daily average of loan from private
individual members exceed its opening sums of the current tax year
= Adjusted total income
Profit minimum = 2% of the adjusted total income
These taxpayers are exempted from the calculation on the basis of profit minimum:
- whose are in pre-company period;
- foundations and public trusts.
Those, who submit a supplementary form, can expect an inspection from the Tax Authority. The supplementary form will have to be filed with the tax authority by the same deadline as the final corporate tax return. The form must include information concerning the previous 3 business years.
- Preparing the return about the amount of the tax advance supplementation to the Tax Authority and the relevant local council(s).
- Transfer of tax advance supplementation.
If the supplementation of the advance tax is not paid to the Tax Authority by 20th December, the Tax Authority can be expected to impose a default fine at a rate of 20% of the tax shortfall, which is the difference between the actually paid tax advance - including the tax supplementation – and 90% of the actual year’s final tax liability.
In order to avoid this please ensure that all conditions for the transfer (authorized signatory of the Company entitled to proceed at the bank, the receipt by the bank of the transfer order, availability of the funds on the bank account) are met in time, but at the latest by 20th December. Please also bear in mind the opening hours of your bank while taking care of the bank transfer.