According to the amendment to the Hungarian Act on Rules of Taxation, which entered into force on 1 January 2025, the Hungarian tax authority will require taxpayers to pay the amount of late payment interest on their tax account debts on a monthly basis.
Under a transitional rule, the Hungarian tax authority will impose the late payment interest for the period January to March 2025 in April 2025. Thereafter, the penalty will be imposed on a monthly basis. Taxpayers will be required to pay by the 20th of each month (or the following working day if the deadline falls on a public holiday).
From 2025, the tax authority will calculate the late payment interest for all taxpayers in HUF without applying rounding rules.
In previous years, the tax authority notified taxpayers of their obligation to pay the interest for late payment once a year, after the calendar year concerned. The due date for payment fell on 15 November each year, which meant that there could be a gap of several months or even more than a year between the actual date of late payment and the due date for the interest.
What is the payment deadline for the 2024 late payment interest?
Due to the changeover to a monthly penalty calculation system, the due date for the payment of the 2024 late payment interest is also different from the previous one. The tax authority has already started notifying taxpayers of their late payment interest obligation for 2024, which will be due on 31 March 2025.
What remains under the old system?
The interest for late payment will remain unchanged at three hundred and sixty-fifths of the base rate of the Hungarian central bank at the time of the delay plus five percentage points for each calendar day.
Although the amount of the late payment interest will be charged on a monthly basis, the tax authority will not continue to impose late payment interest of less than HUF 5,000 per year. If the taxpayer reaches this threshold during the year, additional late payment obligations will be imposed on the tax account on a monthly basis.
The rules for calculating the net additional liability remain applicable. This means that any overpayment in the tax account at the time the debt is due for payment in respect of another tax type will reduce the basis for the late payment interest.
No further interest can be charged on the late payment interest in the event of late payment.
Taxpayers can continue to expect the tax authority to send a notice of the payment obligation. However, the tax authority will not send any further notifications of the obligation to pay the additional levy after the first notification in the year. Taxpayers are now responsible for following up any further additional penalty liabilities during the year, which they can do via the electronic interface set up by the Hungarian tax authority.
Following the changes in the legislation in relation to the increase in default penalty rates, the legislator is now using another tool to promote compliance by bringing the imposition and payment of the interest closer to the date of the late payment.
In view of the monthly imposition and payment of the late payment interest, it is now advisable to pay even greater attention to the fulfilment of the obligation imposed than before. If you need help with compliance work, the tax consulting team of WTS Klient Hungary is always at your disposal!
This article provides general information and does not constitute advice.
