Tax audit plan for 2022: usual suspects and risk analysis in focus

The Hungarian tax authority published its annual tax audit guidelines with the clear aim of supporting compliant taxpayers and take firm actions against intentional tax evasion by utilizing various data sources available in the process. E-commerce, real estate industry, data-based risk analysis remain key elements. The tax audit plan sets out the following four main focus points:

  1. Sectors and activities with significant budgetary risks

E-commerce and trade of computer hardware remain hot topics, as well as the construction sector, tourism and hospitality, food industry (including food delivery services this year and agricultural products), inter alia, are expected to be under scrutiny this year.

Among the thematic tasks, a new focus will be on KIVA (small business tax) audits and transfer pricing audits in the automotive sector. As to the personal income taxation - partly due to the specific tax incentives and exemptions provided lately - reimbursements will be also under scrutiny in 2022 and self-employed entrepreneurs will be in focus.

In addition, due to the discrepancies regarding inaccessible companies, registered seat service providers, companies without actual seats and companies changing seats will be subject to risk analysis and monitored closely.

  1. Taxpayers with significant budgetary risks

Based on the vast data from the reporting systems introduced and/or extended in the recent years (i.e. online invoice data disclosure obligation, “Employee Alert” system and international exchange of information on cross-border tax structures) a targeted risk analysis is available for the tax authority to focus its audits on risky taxpayers.

Recent years saw a significant increase in e-commerce, exacerbated by the pandemic situation with the simultaneous undervaluation of import goods and spread of VAT evasion in intra-Community and domestic trade. The aim of the tax office in those regards is immediate reaction to prevent entering into free circulation (if necessary), therefore importer companies and indirect customs representatives should expect increased attention from the tax authority.

  1. Large taxpayers

In order to secure budget revenues and due to their economic weight auditing large taxpayers remains a key element of the Hungarian tax authority’s plan with additional emphasis on data gained from international exchange of information on cross-borders structures and transactions.

Additionally, large taxpayers without profit after tax in the past two years (with net turnover over HUF 60 billion but with negative or zero profit after tax) should be monitored and audited closely.

  1. Promoting voluntary compliance

To support voluntary compliance by taxpayers, the tax authority intends to use so called supporting procedures (in the case of minor discrepancies) and compliance audits (for more significant discrepancies) without sanctions, at first.