In an earlier article we touched on the legal changes effective in Hungary from 1 January 2021 to ease administration related to the Electronic Public Road Customs Transit Control System (EKAER). The approval of the 2020 summer tax law amendments put a new framework for detailed rules on the horizon, but business entities had to wait another six months for the publication of the new EKAER decree. This is because Ministry of Finance Decree No. 13/2020 PM on the operation of the Electronic Public Road Customs Transit Control System was only published in the Hungarian Gazette on 23 December 2020. In this article we summarise the key elements of the new EKAER decree.
Goods subject to reporting obligation according to new EKAER decree
According to the new EKAER decree, from 2021 the obligation to request an EKAER number may only arise with regard to goods deemed risky under the previous regulation. These typically include food products and clothes as well as other products subject to reporting as defined in a separate decree.
So Hungarian businesses are now exempt from the reporting obligation with regard to goods deemed non-risky under the previous regulation.
When assessing the reporting obligation, the weight and value of the transported products are still a major aspect for consideration. This is because no EKAER number is required for transporting goods subject to reporting and transported from the same dispatcher to the same recipient in the same vehicle not exceeding HUF 1 million (roughly EUR 2,800) in value and 500 kilograms in gross weight. These thresholds are the same as the ones previously applicable for transporting risky goods.
One important difference, however, is that contrary to the previous regulation, based on the new EKAER decree the reporting obligation is applicable not only for road transportation with tolled vehicles weighing over 3.5 tonnes, but it may be applicable for road transportation with any type of vehicle.
Besides the previous exemptions, no risk collateral has to be paid by reliable taxpayers according to the Act on Rules of Taxation, and the obligation to provide risk collateral for the transportation of products subject to the 5% tax rate no longer applies either.
Exemption for short-range transportation
Special exemption from requesting an EKAER number with respect to short-range transportation (i.e. less than 20 km) will now be available for any transport direction. The authorisation is valid until withdrawn.
The new EKAER decree enables taxpayers to make voluntary EKAER reports even if they are not subject to a reporting obligation. In these cases too it is important to make sure the reported data is accurate, but there is no collateral obligation in the case of voluntary reporting.
To sum up, the majority of Hungarian businesses will be relieved from a significant administrative burden from 1 January 2021. This is because the scope of transportations subject to reporting shrank to a fraction of the previous range as the new EKAER decree took effect. Given the positive changes of the default penalty rules announced earlier, the EKAER system has seen the most favourable amendments in recent years. Nevertheless, the EKAER rules should still not be taken lightly since if a reporting obligation does arise, data reporting must be accurate and detailed and the deadlines complied with to avoid any detrimental legal consequences.
If you wish to learn more about the details of the new EKAER decree, and you need help from experienced professionals regarding the registration and processing of data in the EKAER system, as well as in handling system messages, and implementing and operating solutions to facilitate communication with the EKAER system, feel free to contact us.