Economic operators are facing numerous new challenges in the wake of the COVID-19 pandemic.

If payment difficulties emerge at a company, it is worth considering filing a payment relief request with the Hungarian Tax Authority, in particular for deferred payment, payment by instalments or, for private individuals, payment reductions, or in exceptional cases requesting for a release of liabilities.

Based on an official notice published on 19 March 2020, the Hungarian Tax Authority will take into account the epidemic and its economic consequences when considering such requests from enterprises.

Deferred payment or payment by instalment

Taxpayers can request deferred payment or payment by instalment in relation to taxes payments made to the Tax Authority.

Payment reliefs can be granted if the taxpayer is not able to fulfil his payment liabilities immediately and in a full amount, if the payment difficulties are of a temporary nature and cannot be attributed to any action by the taxpayer. Such conditions may be valid for payment difficulties caused by the current epidemic.

Payment reliefs cannot be granted for:

• income tax advances of private individuals and for income taxes deducted by disbursers;
• contributions deducted by disbursers from payments made to private individuals;
• taxes collected.

Payment reductions, release of liability

Reduction or cancellation of interest and penalty liabilities can be granted for legal persons or other economic operators in exceptional circumstances, such as if the settlement of payments would make it impossible to continue their business activities.

Tax debt can be reduced or cancelled only for private individuals; however, such reliefs cannot be applied for contributions and taxes deducted by disbursers from payments made to individuals.

Reduction of tax advance payments

There is also a possibility for modifying advance payment liabilities for corporate income tax, innovation contribution or local industrial tax. If it can be foreseen that the company’s annual revenue will significantly decrease compared to previous years' earnings, it is suggested to consider filing a request for prepayment reduction.

Precise communication with the Tax Authority can facilitate request processing and acceptance of such requests as those outlined above. The members of KPMG's Tax practice are happy to assist you in any payment relief requests you'd like to file, so feel free to contact us.