Everyday business practices not always legal - EY
According to experts of the Vámosi-Nagy Ernst & Young Law Officeʼs tax group, companies in Hungary must pay special attention to their everyday business practices, as not complying with the formal requirements in taxation may cause serious problems.
Dániel Bajusz, Vámosi-Nagy Ernst & Young Law Office
EY legal experts recall that just recently, an entrepreneur claimed that the way his company operates when trying to appeal for a reduction of its business tax is widespread business practice. The Constitutional Court refused the complaint without investigation, however.
The entrepreneur argued that sealing contracts with subsidiaries simply via e-mail is good enough, as international customs and business practices dictate. However, this argument was refused by the tax authorities as well as the court, as the rate of local business tax relevant for the company can only be decreased if valid paper-based subsidiary contracts are available.
The only case when e-contracts are accepted in the place of traditional ones is if they comply with the strict formal regulations of tax law, meaning that they need to contain increased-security e-signatures, notes EY.
"The message of the tax authority and the court in this case is that the practical aspects of business practice cannot overwrite the formal requirements imposed by tax legislation," says Dániel Bajusz, senior manager at Vámosi-Nagy Ernst & Young Law Office.
Bamosz Investment Fund NAV Reaches HUF 15.624 tln in March
Hungary Condemns Iranian Attack on Israel
Share of 1st Time Home Buyers Climbs
Tribe Hotel Budapest Stadium Recognized at LIV Hospitality D...
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
