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The Operational Court for Economic Protection ruled this week on major tax breaks focused on significantly reducing the tax bureaucracy. Working for businesses, the tax office will offer a draft VAT return next year, but will also facilitate the settlement of tax debts and the local business tax reporting system, said Izer Norbert, Secretary of State for Tax at the Ministry Finance.
Reducing the administration will amount to a more serious tax cut, the secretary of state said, adding that administrative costs for businesses related to the main types of taxes are only about 420 billion, which means that farmers spend the 1.7 percent of its sales in the tax bureaucracy.
According to the Operational Court of Economic Protection, these burdens should be alleviated as soon as possible, since the tax administration is currently a cost of the order of magnitude for the commercial tax. Monday’s board meeting took an important step on this issue, in addition almost everyone is affected by every tax relief measurestressed the Secretary of State.
Of the GOT decisions, Norbert Izer was the first to highlight the recommendation of the tax office for draft VAT returns. Starting in the second half of 2021, the authority will prepare a draft VAT return for approximately half a million companies. The simplification of the payment of back taxes was also discussed at the last meeting of the GOT – continued the Secretary of State. The panel has doubled the current automatic installment payment limits.
If Parliament approves the proposal, then Next year, people can claim up to 1 million HUF in debt, and companies classified as trustworthy based on their tax history can claim up to 3 million HUF in installments for their debts without a 12-month surcharge. for which only a simple request must be submitted to the tax office.
The significant reduction in administration affects almost everyone and at the same time can be of great help during a coronavirus crisis. Additionally, startups, multi-site businesses and travel agents can expect relief, the secretary of state said.
One of the GOT tax relief decisions, which exempts so-called middle sellers from contributing to tourism development, can also directly help the industry players most affected by the coronavirus crisis: hotels, travel agencies. If voted by the National Assembly, the measure could leave roughly 3 billion guilders for about 2,000 companies operating in the tourism sector, Norbert Izer said.
He noted that startups can count on personalized tax assistance for longer, as the GOT has decided to double the six-month period of the so-called mentoring. One of the board’s key proposals to simplify the local business return system concerns some 94,000 businesses with more than one location. They will not have to submit their local business tax returns to all interested municipalities, it will be sufficient to submit a single one to the tax office. The data is sent by the office to the competent municipalities, he explained.
More than one and a half million cases from the public administration will be free next year, recalled Norer Izer. Starting in 2021, first instance administrative procedures will be tax-free, so, for example, companies will also be able to apply for tax equity, which now costs HUF 10,000. But there is no fee to pay for a certificate of residence in the common home or the suitability of the establishment, explained the Secretary of State. The measure will not only leave HUF 5 billion to families, the population and businesses, but will also make administration faster, he added.
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