Companies are required to publish and file their simplified annual reports and annual reports by the last day of the fifth month following the financial year’s balance sheet date (31 May for companies following the normal financial year) and their consolidated annual reports by the last day of the sixth month following the financial year’s balance sheet date (30 June for companies following the normal financial year). Since 1 December 2016, companies have been able to meet this publication and filing requirement using the Online Reporting and Form Completion System, known in Hungarian as the Online Beszámoló és Űrlapkitöltő Rendszer (OBR), which stores electronic reports (e-reports for short) for subsequent searching, viewing and downloading. But let’s not get ahead of ourselves.
Which companies are required to publish and file their annual reports electronically?
Pursuant to Section 154 of Act C of 2000 on Accounting, all companies using double entry bookkeeping (including the Hungarian branch offices of companies established abroad) are required to file and publish their annual reports. E-reports can be accessed electronically by anyone through this system, with a few exceptions of course. The following entities are exempt from the publication and filing obligation:
- Trustees
- Hungarian branch offices of enterprises established abroad, if the parent company’s registered office is located in a European Union Member State or if the parent company’s registered office is not located in a European Union Member State but local legal requirements governing reporting, auditing, filing and publication obligations are aligned with the relevant European Union requirements. The list of these countries is published by the competent minister on the Unified Government Portal.
- Law firms
It should be noted that Hungarian branch offices are exempt from publishing their own annual report, but they are required to publish their parent company’s annual report once it is complete.
How to access and use the OBR?
The Online Reporting and Form Completion System can be reached at e-beszamolo.im.gov.hu/ebekuldes. Users can log into the system through the government portal. After logging in, users can choose from the following menu items:
- Submitted filings and notifications, where annual reports previously filed can be accessed and saved
- Complete filing, where the annual report data can actually be uploaded
- Reload/open downloaded document, where users can reload reports previously uploaded and saved (but not published) to avoid having to re-enter the data.
After uploading the data, the form can be saved, printed and filed through the government portal, where it is transferred to the electronic reporting portal within minutes; all e-reports can be searched for, downloaded and printed via the portal.
What has to be published, what data must be uploaded to the OBR?
- Company data: name, tax number, registration number, CSO (Hungarian Central Statistical Office) number, registered office
- Data of accounting and auditing company (where applicable): name, tax number, registration number, address
- Particulars of person responsible for accounting and auditing: name, address, registration number
- Data of company filing the annual report: name, tax number, registration number, address
- Data of person filing the annual report: name, tax identification number, address, legal grounds for representation
- Data of person(s) authorised to sign the annual report: name, tax identification number, address
- Balance sheet and income statement
- Supplementary notes
- Decision on utilisation of profit after tax
- If a statutory audit was conducted, independent auditor’s report including auditor’s opinion or the grounds for refusing the auditor’s opinion
What are the sanctions if companies fail to publish their annual reports on time, and therefore their downloadable e-reports for a specific year are missing?
If a company is late in meeting its publication and filing obligation, it may be subject to a default penalty of up to HUF 500,000 (approx. EUR 1,600). When the penalty is imposed, the National Tax and Customs Administration simultaneously sends a letter of formal notice to the company, providing an additional 30 days to rectify the default.
If the company fails to meet its publication obligation by this additional deadline, the National Tax and Customs Administration sends a second letter of formal notice to the company, providing another 60 days to rectify the default, and simultaneously levying a default penalty of up to HUF 1 million (approx. EUR 3,200).
If the company’s e-report is still not available by the second additional deadline, i.e. it has not been published, the National Tax and Customs Administration deletes the taxpayer’s tax number and initiates proceedings to declare the company “terminated”.
In practice, the first letters of formal notice are generally received by taxpayers operating according to a normal financial year around late July or early August, and the default penalty also appears on their tax account at this time.
It should also be noted that the figures included in the balance sheets and income statements uploaded through the OBR are also checked by the system, which monitors the ratio of shareholder’s equity and registered capital for example, and the expected size of registered capital for the company’s legal form. If these figures do not correspond to the statutory requirements, companies may receive an almost automatic request from the Court of Registration to rectify this.
