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 20^th 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.

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Restructuring of the outstanding tax debts

The new corporate tax law allows taxpayers in Turkey to restructure their outstanding tax debts (also other public receivables like taxes, customs taxes, social security insurance premiums, various administrative fines, and associated interests) and pay in instalments (up to 48 months) only the tax itself without its accrued penalties as the penalties are deleted. The interests on the unpaid taxes are not deleted, however they are restructured with a reduced rate (Producer Price Index) which is in the favour of the taxpayers. If the full amount of the restructured debts is paid at once (without any instalments), then only 10% of the restructured interest is paid since 90% of the interest is deleted in such a case. Taxpayers can make their applications for restructuring their tax debts which have already been accrued as of 12 March 2023.

Finalising tax disputes under tax audit and tax litigation phase

According to the provisions of the new corporate tax law, taxpayers in Turkey can finalise their tax disputes with the tax authority which are in tax audit or tax litigation phases by paying the reduced amount of the taxes claimed by the tax authority, together with the cancellation of the penalties and restructured interests.

In order to finalise tax litigation process, the stage of the lawsuit is important since there are different provisions of the law that regulates how to finalise the lawsuits depending on their stages. Taxpayers who benefit from these provisions must withdraw their court appeals latest by 31 May 2023, and waive the right to sue the tax assessments.

In addition, if the taxpayer settles with the tax authority for their tax liabilities – which might come out from the ongoing tax audits as of 12 March 2023 – by paying 50% of the taxes which are claimed in the tax audit process, the taxpayer does not pay any penalty or interest as the penalties are renounced and the interests will be applied with a reduced rate (according to the Producer Price Index).

Voluntary tax base increase according to the new corporate tax law

According to the new corporate tax law, taxpayers in Turkey can close their past fiscal years 2018, 2019, 2020, 2021 and 2022 to any possible tax audit by increasing their past years’ tax bases. When the taxpayers increase their tax bases, they will not be subject to any tax audit in the future for the related years and for the type of the tax that they voluntarily increase their tax bases provided that the taxpayers pay the related additional taxes on their increased tax bases. Taxpayers can increase their corporate income tax, VAT and some withholding tax (withholding taxes on salary income, self-employment income, rent income, dividend income, long term construction works etc.) bases and can close these tax types and related periods into a possible tax audit in the future. The voluntary tax base increase is a Turkish tax institution that can be considered as a type of tax insurance for taxpayers for eliminating their tax risks. However, it is also worth to state that corporate taxpayers, who increase their corporate income tax bases voluntarily for the past years, will not be able to carry forward 50% of their tax losses. It is important that for fiscal year 2022, 100% of the losses cannot be carried forward, and taxpayers will not be able to be refunded for the excess amount of prepaid corporate income tax which they have paid via their preliminary corporate income tax returns during fiscal year 2022.

Correction of some accounting records

With the Law No. 7440, it is possible for taxpayers in Turkey to correct some of the accounting records given below by paying the advantageous amounts mentioned in the new corporate tax law. Taxpayers can correct their below records by:

• Booking the fair market value records of the commodities, machinery, equipment, and fixtures which are not included in the books, although they actually and physically exist. (The VAT rate that is reduced by the half of the normal rate will be applied)
• Removing from the records the commodities, machinery, equipment, and fixtures that are present in the book records although they do not actually exist (This process can be managed by issuing invoices)
• Correcting the petit cash account(3% tax is paid on the petit cash balance)
• Correcting the shareholder’s receivable account(3% tax is paid on the shareholder’s receivable balance)

Additional tax on deductions and exemptions

The new corporate tax law levies a new tax for corporate taxpayers which is calculated by applying 10% to the deductions and exemptions on the corporate income tax return of fiscal year 2022, and on the tax bases which are subject to reduced corporate income tax rate. This additional tax, the so-called earthquake tax has to be paid in two instalments: the deadline of the first instalment was 30 April 2023, the second has to be paid by 31 August 2023.

If you would like to know more about the new corporate tax law or other tax regulations in Turkey, please visit the homepage of WTS Taurus, the new member firm of WTS Global for Turkey.

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Distance selling of goods

Regulations for service provision and the distance selling of goods made it into the Slovenian VAT Act this year too, although they have been in force since 1 July 2021. Due to EU requirements, the new regulations should have been implemented in national law as early as 1 July 2021, but they were temporarily set in the Rules on the Implementation of the VAT Act, now abolished.

Abolition of paper invoices

Due to the recent VAT changes, customers in Slovenia will receive a paper invoice only if they want one. The aim of the amendment is to relieve the administrative burden on both taxpayers and the tax authority, and to support the consideration of environmental aspects. Issuing a paper invoice to the consumer is thus no longer a responsibility of the seller.

Input VAT may already be deducted for the period of the VAT liability

Accountants welcome this novelty, which allows input VAT also to be taken into account for invoices that were not received in the period for which VAT is calculated, but in the following period. The deduction of input VAT can already be considered in the period when the input VAT obligation arose if there is an invoice available when preparing the VAT report (DDV-O). This settles the VAT calculation and the VAT deduction in the same period for different taxpayers.

VAT changes related to electric passenger vehicles

The requirements for deducting input VAT for electric passenger vehicles since 22 January 2022 are the following:

• the motor vehicle emits no carbon dioxide emissions;
• the value of the motor vehicle, including VAT and other charges, does not exceed EUR 80,000;
• the vehicle is intended for a taxable person to perform business activities, but can also be used for private purposes;
• the VAT obligation arises for every kilometre driven for private purposes, multiplied with the refund for the business trip in kilometres, which is acknowledged as the highest tax deductible refund of the business trip;
• the calculations of the VAT base for private use of the car is as follows: no. of kilometres for private use multiplied by EUR 0.37 / km (and from 1 July 2022 EUR 0.43) = tax base for VAT;
• the period to calculate the VAT obligation is a month, a quarter or at least one time in the calendar year, no later than by 31 December.

Furthermore, the taxable person can assert the right to deduct VAT on the purchase of fuels, lubricants, spare parts and services related to these motor vehicles, if these purchases are related to vehicles that meet the above conditions.

The entitlement to input VAT deduction may also be enforced for vehicles already purchased by taxpayers in the previous years, but only for a proportionate part of the period up to five full years from the purchase date.

Abolition of mandatory identification of a non-resident taxpayer in Slovenia for VAT purposes

Until now, a non-resident taxable person who supplies goods and services in Slovenia had to be identified for VAT purposes in Slovenia, e.g. when delivering goods with installation or work on real estate in Slovenia.

According to the latest VAT changes, from 22 January 2022 a foreign taxable person performing a supply with installation or works on real estate in Slovenia or any other taxable supply in Slovenia may designate a recipient of supplies and services, registered for VAT purposes in Slovenia as a VAT payer (expansion of reverse charge system).

A recipient can be a local company or a foreign entity, as long as it has a valid VAT number in Slovenia. A non-resident taxable person in Slovenia does not have to identify himself for VAT purposes in Slovenia and is still entitled to deduct input VAT charged in Slovenia. Input VAT is refunded via an electronic communication channel at the tax administration in his resident country.

The simplification rule does not apply where a non-resident taxable person in Slovenia supplies goods or services:

• to a person who is not a taxable person for VAT purposes, such as a small taxpayer or end customer, or
• to a taxable person with a VAT ID number in Slovenia based on special arrangements under the local VAT Act, such as the VAT ID no. only for the purpose of supplying/receiving services in the EU (atypical taxable person).

Submission of issued and received invoices at first VAT-O return no longer necessary

An important change for accountants is the abolition of the obligation for taxpayers who submit a VAT return for the first time to enclose with the first VAT-O return:

• a list of received invoices,
• a list of issued invoices, which are the basis for compiling the first VAT return.

If you need more information on the most recent VAT changes or other tax news in Slovenia, please visit the website of WTS Slovenia and contact the local experts of WTS Global for Slovenia.

A VAT changes in Slovenia in 2022 bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

The classification of tax subjects according to the new public tax reliability index was introduced with effect from 1 January 2022 as part of the amendment of the Slovakian Tax Code. It divides taxpayers into three categories: highly reliable entities, reliable entities and unreliable entities. Below we summarise, what it means for companies to belong to one or another group, in other words, what are the benefits and restrictions of those groups.

Benefits for highly reliable entities and reliable entities in Slovakia

• Acceptance of the request to pay advance payments for corporate income tax in a different manner in justified cases in accordance with Section 42(10) of the Slovakian Income Tax Act
• Acceptance of the request to pay advance payments for personal income tax in a different manner in justified cases in accordance with Section 34(4) of the Slovakian Income Tax Act
• Acceptance of the request to pay advance payments for motor vehicle tax in a different manner in justified cases in accordance with Section 10(11) of the Motor Vehicle Tax Act
• Issuance of certificate of personal account status within 15 days in accordance with Section 53(4) of the Tax Code
• Prioritisation of other actions in order to secure payment of tax arrears before initiating tax collection enforcement proceedings. This is an automatic action by tax or customs collecting agent, where a certain action, e.g. drawing up of a report, summoning, conducting of on-site investigations, etc. is performed before collection enforcement action takes place.
• Acceptance of the request for a consent to dispose of with an object of the pledge, respecting the terms stipulated by tax administrator according to Section 81(7) of the Tax Code. Tax and customs collecting agent should accept each such request.
• Prioritisation of on-site investigation over tax audit in case of verification of excess VAT. This is an automatic action by the tax administrator.
• Possibility to set the date of commencement of tax audit in order to determine the eligibility of a claim for refund of excess VAT by the way of agreement with the tax administrator. This is an automatic action where the controller should contact the representative or the entity by phone, in person, or by e-mail.
• Possibility to set the place of performance of tax audit in order to determine the eligibility of a claim for refund of excess VAT by the way of agreement with the tax administrator. This is also an automatic action where the controller should contact the representative or the entity by phone, in person, or by e-mail.
• Automatic refund of excise tax without a tax audit in the value not exceeding EUR 1,000
• Acceptance of the request to decrease the deposited security for excise tax 
• Preparation of a sub-protocol within a tax audit to check the eligibility of excess VAT
• Setting a period of at least 15 days in a notice related to the performance of a tax audit or an on-site investigation
• Reduction of fee for issuance of a binding opinion to one half, i.e. EUR 1,000 vs. EUR 500
• Reduction of fee for the issuance of the decision on the approval of the use of a specific method of determining the tax base of a permanent establishment and the decision on the approval of the use of a valuation method according to Section 17(7) and 18(8) of the Income Tax Act. It means EUR 30,000 vs. EUR 15,000 or EUR 10,000 vs. EUR 5,000.
• Acceptance of the request for a postponement of payment of tax or tax arrears. Terms and conditions from the Financial Administration of Slovak Republic´s portal are not assessed.
• Acceptance of the request to pay tax in instalments. Terms and conditions from the Financial Administration of Slovak Republic´s portal are not assessed.

Restrictions for unreliable entities in Slovakia

For taxpayers who are rated as unreliable entities in Slovakia a reduced period applies for compliance with the obligations related to tax audit, enforcement proceedings or on-site investigations. This period of eight days cannot be prolonged.

If you want to know more about the classification of tax subjects in Slovakia, we recommend you visit the website of Mandat Consulting, k.s. and contact the local WTS experts in Slovakia.

A Classification of tax subjects in Slovakia bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

On 28 December 2017 law no. 275/2017 has been published in the Official Gazette in Romania. The law approves Governmental Ordinance 23/2017 regarding the Romanian VAT split payment mechanism, but brought significant amendments to that.

The VAT split payment system was introduced in Romania in August 2017 through Governmental Ordinance 23 and the text was applicable to all taxpayers registered for VAT in Romania as of January 2018 / optional as of 1 October 2017, with few exceptions.

Who has to apply the Romanian VAT split payment?

The Romanian VAT split payment mechanism requires companies applying this system to pay or cash-in invoice amounts split in two parts: the taxable base – in/from the normal bank account, the VAT amount – in/from a newly created VAT bank account, dedicated exclusively to VAT payments.

The law approving Governmental Ordinance 23 was published on 28 December 2017 and brought significant changes to the initial form of the norms.

Thus, the category of entities that have to apply the VAT split mechanism was significantly reduced, the taxpayers required to apply the VAT split payment system now being the following:

• taxpayers who, as of 31 December 2017, have outstanding VAT liabilities exceeding RON 15,000 (approx. EUR 3,200) for large taxpayers, RON 10,000 (approx. EUR 2,100) for medium taxpayers and RON 5,000 (approx. EUR 1,000) for other taxpayers and these outstanding amounts will not be paid until 31 January 2018;

• taxpayers who, as of 2018, will register outstanding VAT exceeding the above limits, if such amounts are not paid within 60 working days after the payment deadline;

• taxpayers in insolvency prevention or insolvency procedure;

• taxpayers who voluntarily opt to apply the VAT split system (for at least 1 year).

So, unlike according to the previous approach, which would have made VAT split mechanism compulsory to all VAT payers starting 1 January 2018, the VAT split became applicable compulsory only for the categories mentioned above.

Aspects that should be considered

The Romanian VAT split payment system applies to all taxable supplies of goods/services for which the place of supply is considered to be in Romania from a VAT perspective. Transactions subject to special regimes, or transactions for which the beneficiary is liable to pay the tax (reverse charge), are exempted.

The facilities for the optional application of the VAT split system are maintained, i.e. 5% decrease in corporate income tax/microenterprise income tax.

The Romanian VAT split payment system also affects entities that do not have to apply such system, as the beneficiaries are required to check their suppliers and split the payments made to suppliers that apply such system (with a few exceptions).

Considering that a taxpayer may opt voluntarily at any time to apply the Romanian VAT split payment system, for each payment to be made, a special ledger on the website of the tax authority ANAF should be checked. This electronic ledger discloses the companies applying the VAT split payment mechanism.

If you would like to know more about the Romanian VAT split payment system, please visit the homepage of Ensight, the exclusive representative of WTS Global in Romania.

If you are interested in more news about taxation and legislative amendments in the Central and Eastern European Region, please feel free to sign up for our newsletter!

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