In Hungary, various procedures used to require a no-debt certificate, which generally had to be presented in the original paper format. As part of the recent process to reduce administrative burdens there have been developments in this area too. The up-to-date KOMA database of the Hungarian National Tax and Customs Administration, i.e. the database of companies with no public debts, generally substitutes for the no-debt certificate, making administration much easier.
Advantages of database of companies with no public debts
Inclusion in the database has many benefits. Participating in certain tenders or public procurement procedures may be subject to the tenderer being included in the database of companies with no public debts. In some cases, there is also a legal provision related to inclusion in the database. For example, according to the EKAER regulation in Hungary, companies included in the database are exempt from risk collateral.
Conditions of the database of companies with no public debts
Companies must apply separately for inclusion in the database of companies with no public debts using the KOMA form. This application is free of charge, and can be submitted at any time during the month. As a general rule, the NAV examines the debts and makes decisions about including or deleting the companies concerned on the last day of each month. The KOMA database is updated on the 10th day of each month.
The following conditions related to the taxpayer are examined by the NAV based on the application submitted:
- no net tax debts or public debts registered with the NAV,
- tax return and payment obligations fulfilled or being fulfilled,
- not subject to bankruptcy, voluntary liquidation, involuntary de-registration or liquidation proceedings,
- as a taxpayer group it has no VAT or corporate tax debts,
- as a taxpayer it has no overdue tax debts.
If the taxpayer meets the above conditions, it will be included and will continue to be included in the database; no separate notification is sent. The NAV may also send a rectification order regarding the above application to the company’s online document storage facility. Generally, a deadline of 10 days is set to rectify any shortcomings. If these are not rectified, the NAV adopts a decision rejecting the admission to the database.
If the taxpayer is already in the database but does not meet any of the conditions at the end of the month, it will be deleted from the database. The NAV sends notification about this via the business gate. In this case, once the rectification ensues, the taxpayer can apply to be re-listed in the database.
Relief in event of emergency
Currently, the relief introduced in relation to the coronavirus pandemic in Hungary may also affect the inclusion of companies in or their removal from the database. According to the relief, if companies submit an extension request they are allowed to submit their returns and pay the corporate tax, small business tax and the innovation contribution until 30 June 2021, without any legal consequences for their default. If a taxpayer is removed from the database for failure to submit a return, but the NAV accepts the extension request, the taxpayer is subsequently re-listed in the database.
In some cases, companies not included in the database can be subject to sanctions so it is important to pay particular attention to ongoing compliance with the conditions of the KOMA database. It is recommended to check the tax account on a regular basis to make sure that tax payments and returns are in order. In addition to the benefits for your own business, the database of companies with no public debts can provide information about the reliability of a new business partner, so it is also worth using the database to obtain information about prospective partners.
Feel free to contact us if you have any questions about the Hungarian KOMA database, the conditions for inclusion in the database, or about checking your tax account, we’re here to help!
