New sanction for taxpayers: penalty to clarify insured status
The bill introduces a new chapter to the Act on the Rules of Taxation (Art),which regulates non-compliance penalties in relation to procedures for clarifying the status of insured persons.
The aim of the new regulation is to enable the tax authority to more effectively monitor and sanction cases where employment data is not reported or declared.
However, it also considers situations where the taxpayer is no longer legally able to meet its obligations, for example in the case of companies under liquidation.
Section 225/A is added to Art with the following key provisions:
1. Warning and setting a deadline
If a taxpayer fails to fulfil his reporting obligations regarding employees or partners in a business entity, the tax authority will warn them of the legal consequences of such omission. Additionally, it grants a 15-day deadline to fulfill the reporting or declaration obligation.
2. Imposing a non-compliance penalty of HUF 100,000/employee
If the taxpayer fails to meet his obligations after the deadline, the tax authority will impose a default penalty of HUF 100,000 per employee.
Consequently, if the omission affects several employees or business partners, the penalty will be calculated as the product of the number of individuals affected and the penalty amount.
3. Exemption in individual cases
The tax authority will not impose a penalty or issue a warning in cases where a taxpayer is under liquidation, voluntary dissolution or striking-off proceedings and can no longer legally fulfil its reporting obligations.
Disadvantages of unregistered employment
Unregistered work can have adverse legal implications for employees, including:
- In the absence of a written employment contract, there is a loss of rights: no notice period, no severance pay, no vacation or sick leave.
- lack of access to a labour tribunal,
- shorter period of service,
- insecure access to a health care plan,
- lack of eligibility for tax credits,
- work safety risks.
Illegal employment also causes economic distortions, as businesses that comply with the rules are at a competitive disadvantage compared to those that evade taxes and contributions.
The introduction of the above sanctions is intended, among others, to regulate this situation in a more meaningful way.
More stringent administrative burden and frequent tax authority audits make accurate and regular processes a top priority.
OPTIMISE YOUR PAYROLL PROCESSES.
How can companies avoid penalties?
Companies planning to outsource their activities are advised to choose a reliable and compliant partner with good references, as employers can suffer serious financial and moral damage with poorly chosen service providers.
RSM Payroll offers employers complex solutions to meet all aspects of these requirements. Other than the complete management of payroll processes, our services include:
- Ensuring ongoing compliance: our experts continuously monitor legislative changes and ensure that employers' reporting obligations are fulfilled accurately and on time.
- Data validation systems: our advanced technology solutions help ensure data accuracy and early detection of potential errors and omissions.
- Expert support during audits: if necessary, RSM experts can represent the clients in the course of tax and employment inspections, minimising risks.
- Risk management: Through proactive consulting and audit services, we help prevent default penalties.
CHOOSE RSM’S PAYROLL SERVICES.
RSM Payroll is not just a service provider, but a trusted partner in the day-to-day operations of companies. Our solutions help our customers avoid administrative tasks overburdening their internal resources, while ensuring compliance and reducing risks.
