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Number of procedures against "phantom companies" grows

A simplification of the procedure for establishing companies in Hungary and a more proactive tax office have resulted in a big increase in the number of oversight procedures launched by the Pest County Company Court against "phantom companies", businesses that exist on paper but for whom no trace of activity exists, Pest County Court spokesperson Katalin Kende told MTI.

Because of the ease with which companies can now be established, some people take advantage of the system and set up a company for just a few transactions, leaving the state to deal with the shell left behind, Kende said. Local governments usually report such phantom companies to tax office APEH because they lack a bank account number. APEH then sends notices to the company, levies fines and suspends the company's tax number. If the company fails to respond, the tax office asks the company court to start an oversight procedure, she explained.

The number of such procedures started in 2009 reached 3,844, up from 2,809 in 2008 and 1,560 in 2007. The number of procedures started in January-September of 2010 reached 3,272.

There are about 72,000 companies registered in Pest County. (MTI-ECONEWS)