Parliament passes taxpayer classification, red tape reduction laws, supermarket oversight fees and farmland leases

Budapest, November 17 (MTI) – Lawmakers on Tuesday approved bills on cutting red tape and classifying taxpayers based on tax compliance risk. Lawmakers approved an amendment to the Farmland Act on Tuesday that will allow the periodical review of leases by landowners. Also the lawmakers voted to reduce Hungary’s supermarket oversight fees to come into line with a European Commission recommendation which addressed complaints earlier.

Lawmakers approved the red tape reduction package which will amend a total of 110 laws with 148 votes in favour, 2 against and 37 abstentions. The bill was put forward by government office chief Janos Lazar and aims to simplify and speed up tasks in public administration, scale back the activities required for obtaining permits and reduce completion deadlines.

Under the amendments, activities no longer requiring permits will include the sale of precious metal jewelry, setting up animal shelters or hotel services. Regarding activities that will still require permits, the amendment stipulates that if the relevant authority fails to rule on an application within two months, the applicant will automatically be granted a permit. The law enters into effect on January 1, 2016.

Parliament also approved the taxpayer classification bill with 125 votes in favour, 3 against and 58 abstentions. To be classified as a “good” taxpayer, companies, having operated for at least three years, cannot have tax arrears of more than 500,000 forints (EUR 1,600) in the past five years. For such companies, tax audits will last a maximum of 180 days after April 1, 2016, and the deadline for VAT reimbursements will be reduced from the current 75 days to 45 days from January 1, 2017 and to 30 days from 2018.

Taxpayers categorised “at risk” will be those who violate tax laws and amass a significant amount of debt in unpaid taxes. Individuals who have over 10 million forints of outstanding tax will be classified as risky taxpayers, while this threshold will be 100 million forints for companies. Taxpayers in this category will be subject to stricter tax laws, tax audits for them will be extended by 60 days and they will have to pay higher default charges.

The classification system will apply to some 525,000 taxpayers.

Parliament also passed a law that will allow the tax office to prepare the tax returns of 1.5 million private taxpayers who only collect an income from their employer and are not entitled to a tax benefit. From 2017, the tax office will prepare the tax returns of all private taxpayers.

Economy ministry state secretary Andras Tallai said the system will make it easier for both individuals and companies to pay their taxes.

Lawmakers approve amendment on farmland leases

A part of the proposal, regulating the retroactive effect of the law, required a two-thirds majority of votes, but this failed to pass.

In line with Tuesday’s decision, landowners will be allowed to adjust the lease to match market prices within 90 days after acquiring the ownership of the land and every three years after that.

If the leaseholder disagrees with the new lease, it can ask a court review of it within 30 days.

When Gyorffy originally submitted the amendment proposal, he said this was needed to create equal conditions for landowners who signed lease contracts in the past at a quarter or fifth of the current market prices.

Lawmakers pass bill to restore across-board supermarket oversight fees

Under the law passed with a vote of 152 in favour, 28 against and 6 abstentions, the 0 percent bracket for the supermarket oversight fee will be scrapped and all supermarket chains will have to pay the same fee. Below annual revenue of 500 million forints (EUR 1.6m) net retailers will now again have to pay the 0.1 percent fee, while they were exempt before. The fee is based on revenue from the previous year. Micro and small retailers can choose to pay a flat fee of 20,000 forints or 700,000 forints a year instead.

The European Commission launched an infringement procedure against Hungary over the fees which were changed as of Jan. 1. this year, in a way that companies with revenue up to a certain threshold paid no fee. Before that date the fee was payable in a unified way, so the current legislation restored the previous system. It is estimated to cause the central budget losing 23 billion forints in revenue.

Photo: MTI

Source: http://mtva.hu/hu/hungary-matters