Under Act LXXXIV of 2023 on Top-Up Taxes to Ensure a Global Minimum Level of Taxation and on Related Amendments to Certain Tax Acts (Minimum Tax Act), Hungarian members of groups that are taxable persons must report data on a form issued by the NAV within 12 months of the start of the fiscal year to which the top-up tax liability relates. For taxpayers following the calendar year, this deadline is 31 December 2024.
The data reporting form has been long awaited by professionals dealing with this issue as the end-of-year deadline approaches. The NAV finally published the first draft of the form on its website last Friday. The form is called the GLOBE data sheet.
Which group members have to report data?
We first learned about the data reporting obligation in the Minimum Tax Act. Based on the wording of the law, it was reasonable to expect that the data reporting would not only require data on Hungarian group members subject to the global minimum tax, but on all members of the group.
Such global reporting would have created an extremely heavy administrative burden for the Hungarian members of groups, especially since, in most cases, the ultimate parent company that usually has such detailed data is not located in Hungary.
The recently published bill on the autumn tax law amendments furnished additional information on the year-end reporting, but the proposed amendments still allow the tax authority to request information on all members of groups to complete the GLOBE data sheet.
However, according to the recently published draft of the GLOBE data sheet and the accompanying instructions for completing it, the data reporting currently only applies to Hungarian-resident members of multinational groups (or large Hungarian groups), and to the ultimate parent company. Hungarian group members have the option to designate a Hungarian group member to report on behalf of all the Hungarian group members.
What data must be reported on the form?
According to the draft of the GLOBE data sheet, we can now see more clearly what data has to be collected from those concerned. The following must be entered on the main page of the GLOBE data sheet:
- The name and tax number of the Hungarian group member, or the designated local entity acting on behalf of the Hungarian group members;
- The calendar year for which the data is reported;
- Qualification under the Minimum Tax Act (ultimate parent company or group member);
- Types of top-up tax status;
- Further optional statements (on data reporting, top-up tax return)
On the GLOBEA-ANYA form, information on the ultimate parent company must be provided, such as:
- Full name of the ultimate parent company
- Residence under the Minimum Tax Act
- Tax number, VAT ID number of the ultimate parent company
- Types of top-up tax status
- Further optional statements (on data reporting, top-up tax return)
The GLOBEM part has to be completed if there is a designated local entity acting on behalf of all the Hungarian group members. If there is a designated local entity, they must report the following information about the other group members:
- Full name of group member
- Tax number, VAT ID number of group member
- Types of top-up tax status
- Further optional statements (on data reporting, top-up tax return)
Can the GLOBE data sheet be amended?
If any reported data accepted and processed by the National Tax and Customs Administration (NAV) is incorrect or incomplete, it is possible to correct it by submitting a revision. Revisions can be made within the limitation period for tax assessment rights, i.e. for five years after the year in which the tax declaration is due.
What legal consequences can you expect?
If a taxpayer submits late, incorrect, or incomplete data, or fails to submit any data at all, the NAV can impose a default penalty of HUF 5 million.
However, according to the autumn tax law amendments, no penalty can be imposed for fiscal years starting before 31 December 2026 if the group member acted as could be expected in the circumstances.
Given the tight year-end deadline and the wide range of data to be reported, it is recommended to prepare in advance for completing the GLOBE data sheet.
The introduction of a global minimum tax poses a number of challenges for international and Hungarian companies. To clarify the basics, the implications and the practical steps of transitioning to the global minimum tax framework, WTS Klient will be organising a conference in Budapest on the afternoon of 4 December 2024 to help companies operating in Hungary get their bearings in this context. The event will cover the issues related to the GLOBE data sheet and the bill recently submitted to the Hungarian Parliament on the amendment of 2025 tax legislation, which also affects the Pillar Two rules. Reserve your place at the conference too! You can find the agenda and the details of the registration by clicking here.
