Guidelines no. 3016/2016
issued by the National Tax and Customs Administration
on the rules of procedure on exercising privileges, relief and exemptions in the field of value added tax and excise tax
On the basis of Articles 107-108 of Act CXXVII of 2007 on value added tax (henceforward VAT Act), moreover on the basis of the authorization specified in (2) of Article 260 – it is the Regulation of the Ministry of Finance (11/2010 – III. 31. – henceforward: MF Regulation) on the rules of procedure on exercising privileges, relief and exemptions in the field of value added tax and excise tax that sets the conditions and the procedural rules of direct exemptions from value added tax or subsequent refunds of the charged tax on products acquired or services used by persons, organizations or representatives listed in (1) of Article 107 of the VAT Act. Paragraphs 47/A and 47/B of the Act CXXVII of 2003 on excise tax and the special rules of the circulation of excise products (henceforward: Excise Act), moreover – on the basis of the authorization in (7) of Article 129 of the Excise Act – it is the MF Regulation that sets the conditions and procedural rules of excise tax refunds on specific excise products acquired by persons, representatives or organizations listed in (1) and (4) of Article 47/A and 47/B of the Excise Act.
In relation to the above legal provisions and for the sake of the uniform application of procedural rules on exercising the rights for direct exemptions from value added tax and subsequent tax refunds to persons, organizations and representatives defined by (1) of Article 107 of VAT Act; or the tax refunds for persons, organizations and representatives defined in (1) and (4) of Articles 47/A and 47/B of Excise Act, the following guidelines are issued.
1. Definitions and explanations
An applicant is an authorized person, organization or representative as defined in (1) of Article 107 of the VAT Act, as well as in (1) and (4) of 46/A, and 47/B of the Excise Act;
An international organisation established in the EU is defined in sub-point ba) of point b) in paragraph (1) of Article 107 of the VAT Act, as such are the European Community, the European Atomic Energy Community, the European Central Bank, the European Investment Bank, and other organisations established by the European Communities that are subject to the protocol on the privileges and immunities of the European Communities of 8 April 1965 and accord with the terms stipulated in international treaties in relation to the afore-mentioned protocol, any related implemetation order or the seat agreement of the organsiation disclosed in an act; Other international organisations are defined in sub-point bb) of point b) in paragraph (1) of Article 107 of the VAT Act as such are any other organisations beyond the international organisations established in the EU that are acknowledged as such by Hungary;
Armed forces of NATO stationed in Hungary is defined as such by point c) in paragraph (1) of Article 107 of the VAT Act ;
Right for tax refund is the right for subsequent tax refund for which persons, organizations and representatives defined in (1) of Article 107 of the VAT Act and (1) and (4) of Article 47/A and 47/B of Excise Act are entitled to;
Tax refund is the amount of the VAT tax sum for which persons, organizations and representatives defined in (1) of Article 107 are entitled to on the basis of the right for tax refund; or the amount of VAT and/or excise tax sum that persons, organizations and representatives delegated in the territory of the Community and defined in Point a) and Point b) of Article 107 (1) of the VAT Act are entitled to in accordance with the provisions in (1) and (4) of Article 47/A and 47/B of Excise Act;
Application is the form defined in Articles 8-9 of the MF Regulation with a pre-determined compulsory data content and with a compulsory attachment. This form (IDIPL1, IDIPL2) is an established form by the National Tax and Customs Administration of Hungary (henceforward: NTCA);
Exemption certificateis a document on the right of a person or organization defined in (1) of Article 107 of the VAT Act for VAT exemption, or on the right of a person or organization defined in (1) and (4) of Article 47/A and 47/B of Excise Act for the refund of the excise tax and VAT rate in tobacco products with a tax stamp. The exemption certificate is issued by the responsible and competent authority of the recipient country on a form established by (2) of Article 2 of the MF Regulation for this specific purpose and with the pre-defined data content. [„Exemption certificate” for persons, organizations or representatives authorized and accredited in Hungary (Paragraph (1) of Article 19 of MF decree). The programs in assistance of form filling and submission are available in menu item „Nyomtatványkitöltő programok” on the webstie of NTCA (http://www.nav.gov.hu). „Input and/or excise tax exemption certificate” for persons, organizations and representatives authorized and accredited in another country of the European UnionAnnex II of the Council Implementing Regulation (EU) No 282/2011 of March 15 2011 on the establishment of implementing resolutions of the Council Directive 2006/112/EC on the common system of value added tax is available on the English language website of NTCA (https://nav.gov.hu/en/taxation/for_diplomats) in menu item a „Tax” under subitem „For diplomats”.
2. Direct VAT exemption
1. Based on paragraph (1) of Article 5 of the MF decree when goods or services are supplied and the VAT exemption is realized in such a way that the VAT does not have to be charged in accordance with (2) and (3) of Article 107 of the VAT Act, the person entitled for VAT exemption presents the original copy of its exemption certificate to the entity obliged to supply the goods or service until (at the latest) the time of performance as defined by the provisions of the VAT Act. The recipient keeps this document in its registry. [Further condition for tax exempt supply of goods as defined in paragraph 2 of Article 107 of the VAT Act is that the goods supplied – except for goods addressed to diplomatic corps or other qualified organisations/persons – are dispatched as a consignment in the domestic territory or transported from the domestic territory at the time the goods are supplied or within not more than ninety days from the date of the chargeable event - addressed to the name of the customer referred to in Subsection (1) - with proof of exportation, where - within the said time limit - the goods supplied may not be used or consumed, with the exception of sampling and trial production, with a consignment note or any other document accompanying the goods supplied attached, except if supply of goods is:
a) for an international orgnisation established in the EU or for any other international organisation, in case the international convention mentioned therein expressly provides otherwise concerning the supply of goods under exemption and on the conditions for its implementation;
Based on paragraph 3 of Article 107 of the VAT Act the exemption provided to diplomatic corps and/or other qualified organisations/persons shall be granted to the buyer of goods or services in the form of a right to refund, except if:
aa) supply of services is for an international organisation established in the EU or for other international organisation in case if the international convention mentioned therein expressly provides otherwise concerning the supply of services under exemption and on the conditions for its implementation; and
2. In case of advance payments in accordance with Article 59 of the VAT Act the exemption certificate must be presented until, at the latest, the crediting or receipt of the advance payment as stipulated by paragraph (2) of Article 5 of the MF decree.
3. Based on paragraph (3) of Article 5 of the MF decree, it is sufficient to present the exemption certificate only once (on the first occasion) in case the validity of the exemption certificate allows that and if the identity of the person obliged to supply the goods or service is unchanged – the case legal succession not being relevant here – provided that the conditions of direct VAT exemption determined by the VAT Act are still met by the authorized person or organization.7
4. In case the purchaser of the product or the user of the service is based in the Community but not in the Member State where the transaction is performed then the form attached as Annex II to the EU IMPLEMENTING REGULATION – in case the certificate in question conforms to the explanatory notes as well - to confirm that the transaction is tax exempt (in accordance with Article 151 of the Directive 2006/112/EC on the EU’s common system of value added tax (hereinafter referred to as VAT directive) and/or Article 13 of the Directive 2008/118/EC). The form can be downloaded from menu item „Nyomtatványkitöltő programok” on the NTCA website.
5. The exemption certificate is stamped by the competent authority of the host country.
6. In case direct VAT exemption is applied for in the Member State where the transaction was performed the supplier of the goods or service receives the exemption certificate from the purchaser of the goods or service and keeps that in its registry.
7. If the Large Taxpayers’ Tax and Customs Directorate of NTCA (hereinafter referred to as LTTCD) learns of an instance of unauthorized application of direct VAT exemption, as per paragraph (8) of Article 108 in the VAT Act, in the course of its official procedure, in the scope of its operation or as a result of a notification by another directorate the TDPA will adopt a decision obliging the authorized person or organization to pay the VAT. At the same time, the TDPA specifies the legal consequences related to payment retroactively, based on the date when the reason, circumstance or other condition confirming the unauthorized application of the direct exemption emerged.
8. In the case specified by Point 7, the authorized person or organization is obliged to pay VAT onto the invoice for VAT collection held by NTCA at the Hungarian Treasury (SWIFT code: MANEHUHB, IBAN number: HU68-10032000-01076868) on the basis of the decision adopted by LTTCD. The tax is considered to be paid by the payment made on the basis of the decision.
9. The issue of the decision prescribing the payment obligation in the case specified in Point 7 does not affect the tax obligations of the issuer of the invoice; thus, the issuer of the invoice is not obliged to modify the voucher of the transaction either.
3. Emergence of the right for tax refund
10. Based on paragraph (1) of Article 6 of the MF decree, if the tax exemption materializes in such a way that the tax exempt person or organization is entitled for the subsequent refund of the VAT charged when the goods or services had been supplied – in accordance with (3) of Article 107 of the VAT Act – then this right emerges when the total price including the VAT and, in case of excise products, the excise tax is fully settled as a compensation for the supplied goods or services.
11. Based on paragraph (2) of Article 6 of the MF decree, in case of the import of excise goods, the reclaiming right of the person, organization emerges when the excise tax determined by NTCA is fully paid.
4. Submitting the application
12. Based on Article 19 of the MF decree, the aapplicant submits his application for tax refund on a form (IDIPL1 or IDIPL2) established by NTCA and filled out regularly with the attachment of another form named “Exemption certificate” also established by the tax authority.
13. These forms can be downloaded from the NTCA website (http://www.nav.gov.hu):
- IDIPL1 is available under menu item „Nyomtatványkitöltő programok”.
- IDIPL2 is available under menu item „Nyomtatványkitöltő programok”.
- „Exemption certificate” for a person, organization, representative accredited and authorized in Hungary is available under menu item „Nyomtatványkitöltő programok”.
- „Input and/or excise tax exemption certificate” for persons, organizations and representatives authorized and accredited in another country of the European Union is available ont he Enlish language website of NTCA (http://en.nav.gov.hu) under the submenu „For diplomats” in the menu item „Tax”
14. The applicant initiates the tax refund through a written application submitted to LTTCD. Based on paragraph (1) of Article 4 and paragraph (2) of Article 10 of Act CXL of 2004 on the General Rules of Administrative Proceedings and Services, as well as on the basis of paragraphs (1)-(2) of Artcile 7 of Act XCII of 2003 on the Rules of Taxation, the application which contains the data specified in the MF Regulation can be submitted to LTTCD via postal mail (postal address: 1410 Budapest, Pf. 138.); or personally at the address of the designated offices for document submission (1077 Budapest, Dob u. 75-81 on Mondays and Wednesdays between 08:00 AM - 16:15 PM) which is listed on the internet site of LTTCD under menu item „Directorates”.
15. Based on paragraph (1) of Article 7 of the MF decree, The applicant may exercise his right for VAT refund and exise reclaim that emerged in a given calendar year from 1 January of the following calendar year and until 30 September of that same year.
16. Based on paragraph (2) of Article 7 of the MF decree, in case the host country is not Hungary the applicant may immediately exercise his/her right – following the emergence of that right – for tax refund.
17. Based on paragraph (3) of Article 7 of the MF decree, the applicant may also exercise his/her right for tax refund immediately – following the emergence of that right – in case the host country is Hungary and the total tax amount to be reclaimed equals or surpasses 40 000 HUF or if the reclaim is initiated because the host country status of Hungary pertaining to the applicant is terminated.
5. Exemption Certificate
18. Based on paragraph (1) of Article 2 of the MF decree, the applicant certifies his right for VAT exemption, or for the refund of the excise tax and VAT rate in tobacco products with a tax stamp by a document issued by the competent and responsible authority of the host country upon the applicant’s request (exemption certificate).
19. The exemption certificate must contain the following data based on paragraph (2) of Artcile 2 of the MF decree, unless otherwise provided for by the mandatory rule of the European Union :
a) Name and address of the authority of issue,
b) Name and permanent home or company site address of the person or organization entitled to VAT exemption or the person or organization entitled to excise tax exemption (together: the entitled person or organization),
c) a reference to either or both of the following two sets of legislation: (1) VAT Directive or the VAT Act; furthermore (2) the Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC or the relevant provisions of the Excise Act based upon which the document was issued by the authority to the entitled person or organization,
d) the indication of time or other conditions pertaining to the validity of the document,
e) the date and place of issue of the document,
f) Signiture of the person representing and acting on behalf of the authority of issue to certify the authenticity and validity of the document, as well as his name and position in a legible way,
g) The official sign of the authority of issue to certify the authenticity and validity of the document.
20. Based on paragraphs (1)-(2) of Article 3 of the MF decree, in case the host country is Hungary, the exemption certificate is issued by the Protocol and Organisational Department (Protocol Office) of the Ministry of Foreign Affairs and Trade . In case the applicant is a staff member of an armed organization or is an armed organization, the Ministry of Defence is competent in issuing the exemption certificate.
21. Based on Article 4 of the MF decree, the exemption certificate may be validly applied without a certified Hungarian translation or without a diplomatic certification if it was issued by an authority of either Member State of the European Union and in a language recognized as an official language of that country or in any of the working languages of the Community (English, French, German).
6. Contents of the application
22. Based on paragraph (1) of Article 9 of the MF decree, the application must contain the following data20:
a) the name of the applicant as well as his postal address in case it differs from the postal address indicated on the exemption certificate,
b) a statement by the applicant clarifying if the right for tax refund is exercised for an official or a personal purpose,
c) the indication of the period for which the application refers to,
d) the applicant’s assumption of the obligation to pay back the refunded tax in case it was not refunded in accordance with the law or if it was refunded by mistake for any reason,
e) data and information necessary for the bank transfer to refund the tax to the applicant including the IBAN and BIC (SWIFT) code of the account,
f) the signature of the applicant or the person acting on behalf of the applicant.
23. Besides the above and on the basis of paragraph (2) of Article 9 of the MF decree,, the application must contain the following data for each invoice or document (upon which the right for tax refund is based):
a) name and address of the supplier of goods or service,
b) except for the case of import of goods, the tax number of the supplier of the goods or service [Point a) of paragraph (3) of Article 258 of the VAT Act] under which the supply of the goods or service was performed,
c) The date of issue of the document and its number,
d) the date of the emergence of the right for tax refund [Article 6 of MFdecree ],
e) the base and amount of VAT given in HUF,
f) in case of excise goods – and with the exception of the import of excise goods – the base and the amount of excise tax given in HUF but at least the data necessary for establishing the base of excise tax,
g) in case of the import of excise goods the excise tax as established by NTCA.
24. Furthermore, the following items are to be attached to the applications22:
a) the original copy of the invoice issued to the applicant (with his name also indicated) in accordance with the legal provisions. In case of gasoline purchase, the invoice must also indicate the license plate number of the car into which the gasoline was loaded [according to Article 127 (1) (a) of VAT Act invoice certifying the performance of the transaction, and according to point (b) the invoice certifying the advance payment, if they are conform to the requirements specified in the regulation currently in force on the basis of Articles 168-172, 174-178 of VAT Act, and Article 260 (1) (c) on the method of the issue of invoices and receipts, including the establishment of the compulsory mechanical issue of meeting receipt issue obligations, and containing the rules of the identification of invoices and receipts by the tax administration issued by the Minister responsible for the tax policy (at present the MF Regulation 246/1995. (XI. 22.) on the identification by the tax administration of the invoice, simplified invoice and receipt), and in Articles 166-167 of the Act C of 2000 on Accounting, and - in the case of electronically issued invoices - the application the MF Regulation 46/2007 (XII.29.) on certain rulings related to the electronic invoice]. ,
b) in case of the import of excise goods, the original copy of the decision adopted by NTCA to the applicant on the established excise tax,
c) moreover the original copy of every document proving that
ca) the conditions set forth by Article 6 of the MF Regulation, and – whenever these are necessary –
cb) other conditions set forth by Articles 107 and 108 of the VAT Act for excercising the right for VAT refund [in respect of the services of restaurants and other public catering services, a declaration is needed according to Article 108 (2) of the VAT Act; if products had been acquired or services had been used on the purpose of replacing assets secured by a security contract, on the basis of Article 108 (4) (b) of the VAT Act the copy of the security contract and the registry of damages; and other documents], and
cc) other conditions set forth by Articles 47/A and 47/B of the Excise Act are met.
25. Based on paragraph (4) of Article 9 of the MF decree, the copy of (the original) document is to be attached in case any of the above documents is available for the applicant in an electronic format.
26. In order for the execution of the money transfer the application must indicate:
a) the name of the owner of the indicated bank account;
b) in case of a money transfer to be performed to a foreign bank account – besides the IBAN code – the exact name and address of the foreign bank (country, postal code, city, street and street number), BIC/SWIFT code, the currency in which the amount is to be transferred as well as the country code.
27. In order for a faster conduction of cases it is adviseable – however not compulsory –, to also attach a facsimile (with the date and the signature of the applicant) of the following documents: the original invoice, simplified invoice, and, in case of the import of excise goods, the facsimile of the decision adopted by NTCA to the applicant on the established excise tax.
28. Based on Article 11 of the MF decree, the application may be filled out in Hungarian or in any active language, in the latter case, a certified translation is not necessary if the application is filled out in any of the official working languages of the Community (English, French, German).
29. If the applicant is an authorized representation or organization, they may – on the basis of paragraph (2) of Article 108 of the VAT Act – only apply for the refund of VAT and excise tax inherent in the price – paid by the applicant – for the goods and services supplied in Hungary or imported to Hungary for the official use of the representation. In such cases the relevant expenses must be indicated in the accounting records of the representation.
30. As per paragraph (2) of Article 108 of the VAT Act the right for tax refund applies for catering services only if the applicant representation or organization had given a reception in which – in accordance with a written statement of the head of representation – at least ten persons took part28.
31. On the basis of paragraph (3) and (5) of Article 108 of the VAT Act If the applicant is a member or official he/she may apply for the refund of the VAT and excise tax inherent in the price of goods and services he/she purchased for his personal use in Hungary in a maximum amount of 300 000 HUF per year provided that the VAT had been paid. The amounts may be combined for a family – in case of eligible persons living in the same household.
32. Members or officials that are citizens of Hungary or have permanent resident status in Hungary are not entitled to receive tax refunds as is stipulated in paragraph (7) of Article 108 of the VAT Act.
7. Changes in the amounts of taxes to be refunded
33. If the amount of tax to be refuned subsequently changes, the amount to be reclaimed or refunded also changes with the amount proportional to the change.
34. Based on paragraph (2) of Article 17 of the MF decree, if the amount of tax is reduced after the submission of the application, the applicant is required to report that to NTCA of the state immediately, but at least within 15 days of the date as of which the document equivalent to an invoice as defined by paragraph (2) of Article 168 and Article 170 of the VAT Act, serving as the basis of the difference is personally available. The applicant is also required – independently of the other conditions of realizing the tax refund – to reduce the tax to be refunded, or – if the difference has already been refunded by NTCA of the state – to pay the amount back.32 In case of repayment, the applicant is obliged to repay
a) the VAT to the account kept by NTCA at the Hungarian Treasury for the collection of VAT
(SWIFT code: MANEHUHB, IBAN number: HU68-10032000-01076868)
account for VAT revenues
b) the excise tax to the excise tax account relevant to the given excise product kept by NTCA at the Hungarian Treasury
(SWIFT code: MANEHUHB, IBAN number: HU05-10032000-01037306)
account for excise tax revenues from gasoline
(SWIFT code: MANEHUHB, IBAN number: HU22-10032000-01037313)
account for tax revenues from other excise products
(SWIFT code: MANEHUHB, IBAN number: HU28-10032000-01037344)
account for excise tax revenues from tobacco products
35. If the amount of tax increases after the submission of the application, the applicant, based on paragraph (3) of Article 17 of the MF decree, is entitled to report that to NTCA and increase the amount of tax to be refunded with the simultaneous attachment of the original document that serves as the basis of the difference. In case his application had already been granted he is entitled to resubmit his application to LTTCD with the modification accounting for the difference if meeting other conditions concerning the realization of the right for tax refund. In this case the document akin to the invoice as defined by paragraph (2) of Article 168 and Article 170 of the VAT Act. must also be submitted to LTTCD within 15 days from the time it is personally available and the original invoice is also to be attached.
8. General information
36. In case of non-electronic filling of the form the applicant must indicate the official name of the representation and the first and family names – as given in the certification issued by the Ministry of Foreign Affairs and Trade /Ministry of Defense or other competent authority of the host country – in legible capital letters. The type of representation is to be indicated by selecting the appropriate box and the letter code and the serial number of the foreign affairs certificate are also to be given. If the identification number issued by NTCA is known by the applicant that number must also be indicated.
37. For an applicant representation accredited in Hungary the indication of the address in Hungary is necessary in the address section. In case of representations accredited elsewhere the address in the country in question must be given and the identification of the country itself is also necessary. If the postal address is not identical with the address of the representation it must also be indicated. The applicant must also indicate the type of representation in the appropriate section.
38. If the applicant is a member of a representation, the representation he is a member of must be named. Filling out postal address is necessary if the applicant wishes to have certain documents delivered to an address different from the address of the representation he is a member of. The postal address is an address in Hungary where the applicant wishes to have the Decision delivered and the original invoices and documents sent back. In case of representations accredited in a country different from Hungary the address in that country is to be given with the identification of the country itself. It is advisable to indicate a phone number for the purposes of easier contact maintenance.
39. The name and telephone number of the authorized contact person at the applicant representation needs to be filled out only if an authorized representative is acting in the tax refund case.
40. The applicant representation must indicate its own bank account (and the name of the bank) in the section for bank account number where they wish to have the granted refund to be transferred.
41. If the applicant is a member of a representation he is required to unambiguously indicate the bank account number where he wishes to have the granted refund transferred and he must also indicate the name of the account holder. Names of family members living in the same household who are not citizens of Hungary and have no permanent residence permits in Hungary must also be legibly given in capital letters. Their taxation identification number formed by NTCA, the letter code and serial number of their foreign affairs certificate must also be given.
42. In case of transfer to a foreign bank account, indicating the exact address and name name of the bank account and the bank account number in IBAN format as well as the requested currency, the SWIFT/BIC code and the country code are to be given.
43. If the applicant has bank account(s) in Hungary and abroad too, only the bank account where he requests the transfers is to be indicated.
44. The registry of invoices must indicate the date of settlement, number, net value, the tax amount and the sum total of each invoice as well as an aggregate sum total of these amounts. The amount of excise tax does not need to be indicated as LTTCD will calculate that on the basis of the submitted invoices and the relevant legal provisions. In case of representations not accredited in Hungary the registry of invoices may only list such invocies for the contents of which the eligibility for tax refund has been certified by the competent authority in a standard form.
45. When the application is granted by NTCA only such family members can be taken into consideration who are indicated in the application and whose eligibility has been certified by the Ministry of Foreign Affairs and Trade/Ministry of Defenseor the comptent authority of the host country.
46. One application submitted by a member applicant may only contain invoices paid in the course of the same year. NTCA handles the submission as two (or more) applications according to the times of settlement in case the submission contains invoices paid in the span of more than one calendar year. The applicant receives a notification about that treatment.
47. If the applicant leaves his diplomatic post in Hungary, this fact and the date of his leave must be certified by the head of representation. In such cases the certification of the Protocol and Organisational Department of the Ministry of Foreign Affairs and Trade or the competent authority of the host country refers to the leaving of the post as well.
48. The application is to be signed by the applicant member of the organization – or if the applicant is a representation, by the head of the entitled representation.
49. If a representative acts on behalf of the applicant in a tax refund case, the natural identifiers or tax identification number and ID number is to be indicated accurately and legibly. If a representative is involved in the case an authorization in due form, the qualification of the authorization, and a copy of the documents certifying the identification are to be attached to the application.
50. Based on paragraph (2) of Article 7 of the Act on the Rules of Taxation, the representative authorized to act on behalf of a representation or organization in a tax administrational procedure may be35:
- a person authorized to provide representation,
- an employed legal counsel
- an employee of legal age certifying the right to provide representation,
- a commissioned legal counsel,
da) legal adviser
dc) a lawyer’s office,
dd) a European Community lawyer,
de) a taxexpert,
df) a certified tax consultant/expert,
dg) tax adviser
dh) certified auditor
di) an accountant,
dj) an employee or member of a business association authorized to provide accounting, bookkeeping services or tax consultancy,
dk) certified product tax administrator in relation to environmental product tax issues,
dl) certified excise tax administrator based on the Act on Excise Taxes and Special Regulations on the Distribution of Excise Goods.
A sample of authorization form can be downloaded from the submenu item of „Adatlapok, igazolások, meghatalmazásminták” under others („letöltések egyéb”) on the NTCA website.
51. Based on paragraph (1) of Article 7 of the VAT Act, the representative authorized by the member or official to act in the tax authority procedure may be a:
- legal representative,
- a certificate of representation presented by
bb) a lawyer’s office,
bc) European Community lawyer,
be) a certified tax consultant/expert,
bf) tax adviser,
bg) certified auditor,
bh) an accountant,
bi) employee or member of a business association authorized for accounting and bookkeeping services,
bj) certified product tax administrator in relation to environmental product tax issues
bk) certified excise tax administrator based on the Act on Excise Taxes and Special Regulations on the Distribution of Excise Goods.
- another person of age on the basis of a single authorization or commission included in a notarial document or private agreement with full evidencing force.
A sample of authorization form can be downloaded from the the submenu item of „Adatlapok, igazolások, meghatalmazásminták” under others („Letöltések egyéb”) on NTCA webpage.
9. Registry of the application
52. LTTCD registers the applicant upon its submission of its first application. Upon registry of the application LTTCDgenerates a technical identifier for the applicant.
53. An applicant may only have one technical identifier. In case more than one technical identifier have been generated for him then – as a result of a consultation with the applicant – all of his technical identifiers will get deleted with the exception of one and the applicant will receive a written notification about the deletion. Deleted technical identifier(s) must be indicated in the main registration.
VIII. Adopting a decision about the application
54. The decision of the first instance regarding applications is the competence of LTTCD as stipulated in point a) of paragraph (1) and in paragraph (3) of Article 63 in the Government Decree no. 485 of 2015 on the Competences and Authorities of the Bodies of the National Tax and Customs Administration
55. A resolution (ruling) in line with the requirements defined in Article 123 of the Act ont he Rules of Taxation and in paragraphs (1) and (2) of Article 72 of the Act CXL of 2004 on the General Rules of Administrative Proceedings and Services must be adopted in respect of the tax refund application. The resolution (ruling) is to be adopted – also with regard to Article 14 of the MF decree – within the general administrative deadline of 30 days as defined in paragraphs (1)-(1a) of Article 5/A of the Act on the Rules of Taxation.
56. The resolution (ruling) must indicate the amount of the value added tax and excise tax approved to be refunded. In case the applicant wishes the amount transferred in a currency different from Hungarian Forint, the costs of the exchange have to be borne by the applicant who is to be duly notified about that obligation.
57. The original invoices attached to the application and – in case of importation of goods – the resolutions must be applied with the stamp imprint “VAT refunded” in case of granted VAT refunds and “Excise tax refunded” in case of granted excise tax refunds in order to avoid multiple submissions. Rejected invoices must be applied with the stamp imprint “submitted for tax refund” on their front or back page. The date as well as the signature of the executive must also be given.
58. Before a decision is adopted regarding the application LTTCD checks the observation of quantity and value restrictions as defined in paragraph (3) of Article 108 of the VAT Act and paragraphs (7)-(9) of Article 47/A of the Act on Excise Taxes and Special Regulations on the Distribution of Excise Goods.
59. In the procedure of the granting process and in the framework of an audit LTTCD is authorized to inspect circumstances suggesting any kind of irregularity concerning the issuer of the invoice or any person involved in the economic transaction that serves as the basis of the tax refund; besides, in case of circumstances suggesting excise irregularities, it is obliged to contact the competent directorate.
60. If an instance of unauthorized application of direct VAT exemption becomes known to LTTCD in the course of its official procedure, in the scope of its operation or as a result of a notification by another directorate as per paragraph (8) of Article 108 of the VAT Act.
- before the issue of the decision of merit in the case, TDPA adopts the resolution about the rejection of the application;
- after the issue of the decision of merit in the case, TDPA adopts a separate resolution to the authorized person or organization prescribing the obligation to repay the VAT. This resolution specifies the legal consequences regarding repayment and TDPA also takes retroactive measures regarding the date when the reason, circumstance or other condition arose upon which the ineligibility for tax refund was based.
11. Delivering the resolution (ruling)
61. The resolution (ruling) is to be delivered to the applicant or the authorized representative by means of postal delivery.
62. The original documents attached and serving as a legal basis of the tax reclaim, and the other documents submitted in the course of the procedure must be sent back by LTTCD by post to the address indicated in the application within 30 days from their receipt or – upon the explicit request of the applicant and simultaneously with the delivery of the resolution (ruling) – after the decision has been passed on the application at the latest.
63. The resolution (ruling) and other documents must be delivered with a “certificate of delivery” for the applicant or for his authorized representative.
64. Based on paragraph (3) of Article 124 of the Act on the Rules of Taxation any offical document of NTCA may be delivered to the addressee by own employees (own carrier), who are in government service, in official service, in employment or in any other service relationship with NTCA, thus avoiding postal mailing. By way of delivering the official NTCA document through own carrier, the receipient may be the person, who would otherwise be if it was delivered by normal postal mail.
12. Legal remedy
65. Taking into account paragraphs (1) and (3)-(5) of Article 136 as well as paragraph (1) of Article 137 of the Act ont he Rules of Taxation, the applicant (or his/her authorized representative) may submit an appeal against the resolution (ruling) within 15 days of its receipt. The appeal is not dutiable and it must address the Appeal Directorate of NTCA – the tax authority of the second instance – but is to be submitted to LTTCD (the authority of the first instance) if conditions stipulated in points k) and n) in paragraph (1) of Article 5 as well as in Article 6 of the Act XCIII of 1990 are fulfilled.
66. The applicant or the authorized representative must attach all the documents and other evidence to the appeal that had been submitted for the legal procedure of first instance together with the application and other evidence related to the appeal.
67. Based on paragraph (6) of Article 136 of the Act on the Rules of Taxation, any appeals filed late, or signed and filed by non-eligible person or those which are non-eligible due to lack of right to appeal shall be refused by the first instance tax authority with no examinationof the case.
13. Transferring the tax refund
68. LTTCD may only transfer the refunded tax in HUF to a bank account which had been indicated on the application upon the condition that (1) in the case of an authorized applicant he himself or the relative living in a common household with him; (2) in other cases the applicant himself is the owner of the bank account. The applicant is not supposed to apply for the transfer, but LTTCD arranges it automatically.
69. If the applicant requests the amount to be transferred to a foreign bank account or in a currency other than HUF the exchange costs are charged to him and shall be retained from the amount of the refunded tax.
70. According to Article 151 (2)-(6) and Article 178 Point 20 of the Act on the Rules of Taxation LTTCD may retain the refundable tax up to the amount of the applicant’s tax debt registered at the tax authority (including duty debt and the debt registered on the basis of a legal assistance on recovery), and up to the amount he owes the regionally competent tax authority and the entitled party to receive the public debt to be recovered as a tax. LTTCD shall notify the applicant of retention by means of a ruling.
71. LTTCD shall not exercise its right of retention regulated in Point 70 in the case of applicants
- falling under the scope of the Decree No 22 of 1965 on the proclamation of the Vienna Convention (Vienna Convention on Diplomatic Relations of 18 April, 1961);
- falling under the scope of a statutory legal act of the European Union, or an international convention announced by a law or a governmental decree provided that the statutory legal act of the European Union or the international convention explicitly excludes the right of execution.
72. The applicant shall be entitled to a delay interest for each day of the delay defined in paragraph (6) of Article 37 of the Act on the Rules of Taxation in the case of a transfer over the deadline laid down in paragraph (4) of Article 37 of the Act on the Rules of Taxation, that is 30 days after the resolution entered into force.
14. Closing provisions
73. These guidelines enter into force on the 5th day after the one following its issue.
74. From the day when these guidelinesenter into force, the provisions of the guidelines no. 3007/2012, and the amendments thereof, on the rules of procedure on exercising privileges, relief and exemptions in the field of value added tax and excise tax issued by the National Tax and Customs Administration become void.
Budapest, 16 November 2016
National Tax and Customs Administration