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The point of view is what we see in the tax laws presented last night. On the one hand, there will be a reduction in administration and, on the other hand, the municipalities will collect taxes in the same way that a caged chicken is caught by pressing the red button. There won’t be much independence in it.
Transitional measure completed
The transformation will also affect the automobile tax and the commercial tax. The first is not so surprising, since even this year the municipalities did not receive their share of the car tax, since it is channeled to the epidemiological fund by the state, and the municipalities could have guessed that it would not be otherwise in 2021. Without However, according to the proposal presented, this item will never belong to local governments again.
Next year, the tax authority will take over both the filing of taxes and the collection of taxes, and from 2021 the revenue will enrich the state coffers.
Basically, this is not sacrilege, since originally the car tax was a central tax passed to the municipalities by the state. Subsequently, in 2013, the state and the municipality already shared the revenues, and the municipalities received 40 percent of the tax and 60 percent went to the central budget. That is not all there will be next year.
Simply without tax planning
It is not an important issue, tax revenues did not reach 90,000 million HUF annually either. But several municipalities have tried to make themselves more attractive by attracting companies that have a fairly large fleet of vehicles. The essence of the temptation was that there was no business tax on the given settlement, or only a very low rate. The car tax still had to be paid, but the business tax did not, because it could be divided based on the value of the cars stored there. If all the cars were on the site duty free, you would hardly have to pay the business tax. The company also won, without having to pay an ipa, and the municipality was able to pay a significant car tax.
These municipalities certainly won’t do well now, as they have basically made a living off the car tax.
In addition, the regulation requires this opportunity for fiscal optimization. In the future, it will not be possible to avoid paying business taxes by dividing the tax on the basis of the value of the assets on the site (that is, the value of the cars stored there). This will only be possible on the basis of which company in the company pays the most salaries. If only two or three guards are outsourced to the site, it will not be possible to show taxable income there. That is, the circle is closed.
No comment
There will be so many changes in the business tax compared to the car tax that it will still have to be paid into the accounts of the municipalities. Otherwise, they won’t have much to say about it. The business tax return and all related documentation must be filed through the state tax authority. It follows, although not included in the draft, that the inspection tasks will also be carried out by NAV instead of the municipalities. This means that during an inspection, NAV will have in its hands the company’s corporate tax return, VAT return, and local tax return.
As for the municipalities, however, they will only see when the ATM rings and the referral arrives.
So far, this has only been partially the case: since 2017, companies that have had multiple sites, that have not benefited from a discount or have deviated from the general rule, have been able to choose to send their returns through the NAV interface. It will be mandatory from 2021, only it will not apply to those who are not required to file electronically: non-entrepreneurs.
They are also carved into ornaments in the business tax. For example, temporary business activity will cease. All that remains is that a construction company that has been operating in a given settlement for more than 180 days is required to establish a site. The 180 days will be calculated on the basis of the contracts. If the company works in a certain settlement for less time than this, there is no establishment, it is taxed at its registered office.
This, according to the explanatory memorandum, will also make things much easier for local governments and businesses.
Therefore, the system will be ironed and frost free from 2021. Taxes with higher income have to be declared through the NAV, differences are eliminated, municipalities cannot enter into tax planning and at the end of the season declaration or charging period, you can get excited about how much the meter shows.
When Fidesz was the savior
This is not the first time the government has sought to centralize local taxes. This provision was introduced by the then government in 2009 and then, in 2010, one of Fidesz’s first measures was to restore it. In other words, instead of the APEH, the municipalities have been collecting local taxes ever since. At that time, the decision was justified with the argument that the transfer of collection was violated as a fundamental right of local governments, and with the argument that the business tax was the most important source of income for local governments. Among other things, Lajos Kósa registered the restoration bill as mayor of Debrecen.
(Cover image: Huszti István / Index)
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