Representatives, too, may act on behalf of their clients in proceedings before NTCA. For the procedure with involvement of statutory representatives, it is sufficient that they are reported to NTCA when the tax number is requested by the taxpayer; in the case of authorised agents, a power of attorney shall be submitted. The power of attorney may be issued for representation in a specific case (limited POA) or for a longer-term in general (permanent POA). Authorised agents may act under different rules in tax and customs matters. A special form of representation is financial representation.

Financial representation in tax matters

Private individuals and companies, if established in a third country only, i.e. outside Hungary or the territory of the European Union, and incurring VAT liability on the sale of goods or provision of services in Hungary, are obliged to mandate a financial representative to meet their tax liabilities. A financial representative can be a business organisation (limited liability company or joint stock company) that has a stable financial background (its registered capital reaches HUF 150 million or has a bank guarantee of an equivalent amount), and is not in tax debt with NTCA.

In the absence of VAT liability in Hungary, the appointment of a financial representative is only an option for a third country person or organization.

Financial representation differs from any other form of representation insomuch as the foreign undertaking and the financial representative are subject to joint and several liabilities for the company’s tax obligations.

Representation in tax matters based on a power of attorney (POA)

Any private individual of legal age or any legal entity may become a representative on the basis of a limited power of attorney.

Based on a permanent power of attorney

  • any natural person may be represented by any adult private individual or any legal entity; whereas
  • an organisation (business company, foundation, etc.) can only be represented by an authorised agent meeting certain conditions. Such an authorised agent may be a solicitor, an attorney, a tax expert, a tax adviser, a book-keeper, the owner of an entity, an employee of legal age (a power of attorney shall be provided by such a an authorised agent as well).

Representation in customs matters on the basis of a power of attorney

In customs matters, clients may be represented by a customs adviser, a customs agent, an AEO-licensed person or entity both on the basis of a limited power of attorney or a permanent power of attorney. In appeal proceedings a legal representative may also act on behalf of the concerned person or entity (i.e., solicitor, attorney, European Community lawyer). An authorised agent of the client may also be an adult employee of the client.

Notification of a financial representation to the authority 

The financial representative organization is registered by NTCA on the basis of the notification made on form no. 'T201 when requesting the tax number and NTCA establishes a tax number for the foreign undertaking on the basis of this notification. Any changes to the financial representative will also need to be notified to NTCA on form no. ‘T201. A private individual acting on behalf of the taxpayer – e.g., an employee of a financial representative organization – can be notified to NTCA on the form called UJEGYKE.

Submission, notification of a power of attorney

A limited power of attorney shall be attached to a specific application or submitted in an ongoing case, in which the representative is entitled to act on behalf of the client.

The permanent power of attorney shall be notified to NTCA in advance so that the representative can act on behalf of the client.

Having a tax number for the client and his/her/its proxy is also important for the submission of the power of attorney.

The power of attorney can be notified to NTCA by both the principal and the authorised agent on the standard form (UJEGYKE data sheet). Foreign persons are usually not obliged to administer their tax matters electronically, so they can submit the form also on paper (the power of attorney must be attached). The authorised agents (i.e.. Hungarian business organisations, undertakings) are usually obliged to administer their tax matters electronically, so they can submit the form in an electronic way only.

It is also possible for any party to register the power of attorney on the ONYA Portal. In this case, the power of attorney does not need to be attached, the notification must be approved by the parties. Thus, in order to use this service, both the proxy and the principal (the foreign person or in the case of an organization its legal representative) shall have an electronic identification (e-ID) accepted in Hungary (KAÜ identification, e.g. client’s gateway registration).

It is important to know that Hungarian business organisations are obliged to electronic administration of their tax matters even if their managing director is a foreign individual. Such companies can thus submit the power of attorney in accordance with the legal provisions (i.e. electronically authenticating the power of attorney or notifying it on the ONYA Portal) if the managing director also has the electronic identification referred to in the previous paragraph.

Foreign legal representatives, foreign tax experts in a procedure

In the case of a power of attorney issued for a qualified tax adviser, tax expert or European Community lawyer who has not obtained his/her qualification in Hungary, it has to be made sure that such a person can exercise his/her right of representation only after his/her qualification has been accredited and registered in Hungary.

Hungarian Tax and Customs Administration