"From 1 January 2008, each year the Hungarian Tax Authority will audit 20% of the companies that are established in that year without a predecessor company. PricewaterhouseCoopers gave details about the related regulations in its latest Tax and Legal Alert on Tuesday.Under the regulations, the Chairman of the national Tax Authority publishes an annual audit policy which lists the priority audit objectives, the key economic activities that will be audited and the types of audits that will be carried out.
This year, a new element has been added to the list. From 1 January 2008, the Tax Authority will conduct a risk analysis with respect to companies owned by a person or entity whose previous companies were wound up with back taxes owed, identified as having considerable tax shortfalls, or had a shop temporarily closed down.
The Tax Authority must start the audit within 90 days after the new company is assigned a tax number.
If the Tax Authority finds that the data reported to it are false, it must suspend and then delist the new company's tax number. If a new company carries out an unregistered activity, a default penalty of up to HUF 500,000 may be levied on it.
Under the new regulations, a significant portion of newly established companies can expect to be audited and, given the thoroughness of these audits, they will have to pay close attention to complying with all the applicable regulations."
Source: Portfolio Online Financial Journal
16.01.2008