National Tax Administration Research Articles

Financial guards at Europol. Participation of the National Tax and Customs Administration and its predecessor, the Hungarian Customs and Finance Guard in the workof the European Union Agencyfor Law Enforcement Cooperation

Aim: To give an overview of the cooperation between Europol and the National Tax and Customs Administration. Methodology: The different areas of cooperation are presented by the authors based on the review of the available documents, the factual examination of the data and the experiences of conversations with liaison officers. Findings: The National Tax and Customs Administration and its legal predecessor, the Hungarian Customs and Financial Guard, have been participating in the work of Europol since 2002. During this period, it was constantly present with liaison officers in joint tasks. NTCA’s financial officers and investigators try to make full use of the support provided by Europol, but at the same time, given the global nature of serious international and organised crime, it is necessary to constantly examine the further possibilities inherent in cooperation. Value: The article adequately reviews and presents the relationship between the HCFG, later the NTCA and Europol, as well as the strategic and practical results resulting from it. During the interviews with the liaison officers, the authors got to know the practical aspects of the cooperation in depth and presented them in this article.

Pénzügyőrök az Europolban A Nemzeti Adó- és Vámhivatal, valamint jogelődje a Vám- és Pénzügyőrség részvétele az Európai Rendőrségi Hivatal munkájában

Aim: To give an overview of the cooperation between Europol and the National Tax and Customs Administration. Methodology: The different areas of cooperation are presented by the authors based on the review of the available documents, the factual examination of the data and the experiences of conversations with liaison officers. Findings: The National Tax and Customs Administration and its legal predecessor, the Hungarian Customs and Financial Guard, have been participating in the work of Europol since 2002. During this period, it was constantly present with liaison officers in joint tasks. NTCA’s financial officers and investigators try to make full use of the support provided by Europol, but at the same time, given the global nature of serious international and organised crime, it is necessary to constantly examine the further possibilities inherent in cooperation. Value: The article adequately reviews and presents the relationship between the HCFG, later the NTCA and Europol, as well as the strategic and practical results resulting from it. During the interviews with the liaison officers, the authors got to know the practical aspects of the cooperation in depth and presented them in this article.

Intellectual property related crimes in 2013

The author provides an overview of the investigative framework and statistics of IP-related crimes in 2013 in Hungary. The assessment is particularly timely, as investigative competences have been transferred to the National Tax and Customs Administration from the Police in 2011.

Digitalisation, digital transformation – In the practice of the National Tax and Customs Office

Our research has shown that digital solutions have increased the efficiency of official audits carried out by the National Tax and Customs Administration (hereinafter Nemzeti Adó- és Vámhivatal, NAV), making it easier to compare tax authority and taxpayer data. A new way of thinking has been introduced at the NAV as a result of digitalisation solutions. The overall impact is positive, with synergies between NAV and taxpayers. Following the beginnings, we will look at the digital solutions of the present and map out the opportunities for development in the near future, using several research methods. What has NAV’s digitisation activity given us and what can it give us? Time, efficiency, smoother administration, more queries for taxpayers and their partners. A change of mindset, a changing audit methodology, permanent change. Transforming jobs, the possibility of using artificial intelligence. The focus of audits will remain on the examination of human activities, but the role of the human factor in audits will be reduced.

Practical Information on European VAT

As is traditional in the first issue of each year, this overview presents the key features of the VAT systems of most European countries (both EU and non-EU), including standard and reduced VAT rates, various thresholds, the format of the VAT identification numbers and contact details of the offices of the national tax administration which process VAT refund applications or provide information to non-resident businesses on national VAT rules. The overview is compiled by the editor on the basis of information provided by the members of the European Knowledge Group of IBFD at the beginning of 2024.

Further steps in the digitalisation of tax law

The digitalization of tax law has a decade-long history, the primary goal of which is to increase government revenues and reduce tax evasion. Several elements of this digitalization process are known: the online cash register, the Electronic Road Traffic Control System (EKÁER) system and the Online Invoicing System. My main objective is to prove how useful the state-of-the-art technological solutions that have been debuting in recent years are from the point of view of public finances, since, for example, VAT revenues have more than doubled. In this study, I undertake to review the most important rules of the Online Invoicing System. After examining the legal background, I am processing a case brought before the Curia in which the plaintiff of the dispute was a VAT taxpayer who was unentitled to deduct tax, and the defendant was the Appeal Directorate of the National Tax and Customs Administration (NAV). Next, I will look at an Argentine procedure, electronic invoicing – e-Factura in Spanish – which has been optional on a voluntary basis since 2003 and has become mandatory for all taxpayers subject to VAT since 2016. The introduction of the new system was implemented in stages and was finally fully implemented by 2019. At the end of the article, I discuss the changes affecting the Hungarian regulations in 2023, and then I present the revised rules of e-VAT and finally the e-receipt.

Changes in the performance of the agricultural sector in Hungary due to the 2008 economic crisis and COVID-19 pandemic

Abstract Subject and purpose of work: The paper examines two of the most important sectors of agriculture, crop and livestock production, in a time series analysis. The authors analyzed the number of enterprises, the number of employees, labor costs, turnover, and balance sheet total, and also assessed the evolution of liquidity and profitability in the two sectors, broken down by size. Materials and methods: The results of livestock and crop production were examined separately for the period 2008-2020. The analysis was based on aggregated data from the National Tax and Customs Administration in Hungary. Enterprises with the NACE REV 0140 for animal husbandry and 0110 for crop production were studied. In the research time series analysis and, where possible, trend analysis were performed. Results: In the research, the following indicators were examined using time series analysis in both crop and livestock production: the number of companies, the number of employees, the net sales revenue, the composition of net sales, the development of the balance sheet total, cost structure, labor costs, the quick ratio of liquidity, and the ROA indicator. Conclusions: Agricultural enterprises are most affected by the downward trend during the period under review, with the exception that the animal husbandry sector started to decline earlier than the crop production sector.

Forum: AG Kokott Tries to Bring Clarity to the Selectivity Test for Individual Tax Rulings

In an opinion of 4 May 2023 in Case C-454/21 P, Engie, Advocate General Kokott proposes a new standard of state aid review of individual tax measures such as the tax rulings, based on a manifestly erroneous application of tax law (favourable to the taxpayer) by the national tax administration. Considering that, in order to assess the selective nature of tax rulings, only national law must constitute the frame of reference and that in any event, only tax rulings that are manifestly erroneous with regard to national law can constitute a selective advantage, Advocate General Kokott has called on the Court to annul the Commission’s decision finding that Luxembourg granted the Engie group unlawful state aid in the form of tax advantages, as well as the judgment of the General Court. State aid control, direct taxation, notion of selective advantage, Commission practice, aggressive tax planning, individual tax rulings, tax system of reference, comparability, Union Courts review, annulment of Commission decision

Ochrona praw podatnika a dopuszczalny zakres informacji przekazywanych w trybie art. 45 ust. 1 ustawy o Krajowej Administracji Skarbowej. Glosa aprobująca do wyroku Naczelnego Sądu Administracyjnego z dnia 4 maja 2021 r. (III FSK 928/21, LEX nr 3181325)

In the analyzed judgment, the Polish Supreme Administrative Court sets the limits on the tax authorities’ request for access to tax information pursuant to Article 45 (1) of the National Tax Administration Act. In the rationale for the judgment, the Court emphasized that this provision concerns a specific form of the authority’s action with respect to the collection, use, and processing of tax information. For this reason, the use of such a form of action is subject to certain restrictions. On the basis of this provision, tax authorities may not, in particular, take actions that are appropriate for formal proceedings (administrative, tax, or customs-fiscal). In the commentary, the justification of the Supreme Administrative Court was welcomed, developing the arguments supporting the main theses of the judgment and organizing the arguments presented in other judgments on this subject.

Assessing the impact of Hungary's public health product tax: an interrupted time series analysis.

Imposing taxes on unhealthy goods can generate income, raise people's health awareness, and eventually decrease the prevalence of chronic diseases. Our aim was to assess the impact of Hungary's public health product tax (PHPT) since its implementation in September 2011. Differences in purchasing habits between households with different income statuses were also compared. A retrospective, descriptive analysis of tax bases and income was carried out, and an interrupted time series analysis using the generalised least squares method was performed to examine the changes in trends regarding the purchase of taxable products before and after the implementation of the tax. The amount of tax base (in kilograms or litres), income (in HUF and EUR), and annual purchased quantity of food and beverage groups per household were assessed. Data were derived from the National Tax and Customs Administration of Hungary and the Hungarian Household Budget and Living Conditions Surveys. The study sample was composed of households who participated in the surveys (mean = 8,359, SD = 1,146) between 2006 and 2018. The households' tax bases and incomes increased constantly (with a few exceptions). The total revenue was 19.49 billion HUF (67.37 million EUR) in 2012 and 59.19 billion HUF (168.55 million EUR) in 2020. However, the households' purchasing habits did not change as expected. A significant short-term decrease (between 2012 and 2013) in purchasing unhealthy goods was observed for three groups: soft drinks (p = 0.009), jams (p = 0.047), and fruit juices (p = 0.038). Only soft drinks showed a significant decreasing trend in the post-intervention period between 2012 and 2018 (p < 0.001). We concluded that the PHPT did not decrease households' unhealthy food purchasing trend, although it has a positive effect as it can create revenue for health care and health-promoting programmes.

전통 법제에서 포락(浦落) 및 이생(泥生)에 관한 관습

In this study, I traced the custom of paddy field loss(浦落), which is recognized as the cause of the loss of land ownership in the jurisprudence of the Supreme Court decision. The paddy field loss was not judged as the cause of the loss of ownership from the Chosun Dynasty to the enlightenment period. According to the custom in the traditional society, when the paddy field loss was caused due to flooding and the land was submerged in a river, and a new land(泥生地) was created by the mud formation on the opposite shore or downstream of a river, the landowner of the paddy field loss could obtain the ownership of the new land. In addition, it can be seen that the legal principles of paddy field loss(浦落) and mud formation due to flooding(泥生) in the Chosun Dynasty are similarly applied to civil trials in the enlightenment period. However, the custom on paddy field loss and mud formation due to flooding has been no longer recognized by the decision of the Chosun High Court on November 1918. And in 1927, the Chosun Stream Order(朝鮮河川令) was enacted, which specified that the land which has become the public stream due to paddy field loss is not the subject of ownership in the text of the law. After liberation, the Supreme Court had faithfully succeeded the regulations of Chosun Stream Order(朝鮮河川令) and the decision by Chosun High Court. Therefore, the decision of supreme court has maintained that 'the land ownership is lost due to paddy field loss. In the traditional society, paddy field loss and mud formation due to flooding were approached in terms of the efficiency of the national tax administration. On the other hand, in the modern society after the Japanese colonial period, there is a difference in approaching paddy field loss and mud formation due to flooding as a matter of who belongs to land ownership.

Practical Information on European VAT

As is traditional in the first issue of each year, this overview presents the key features of the VAT systems of most European countries (both EU and non-EU), including standard and reduced VAT rates, various thresholds, the format of the VAT identification numbers and contact details of the offices of the national tax administration which process VAT refund applications or provide information to non-resident businesses on national VAT rules. The overview is compiled by the editor on the basis of information provided by the members of the European Knowledge Group of IBFD at the beginning of 2023.

Modeling Tax Declaration Behavior and Quality of Tax Processing: A Game Theory Approach

Tax as one of the main levers in the micro and macro sectors of the economy it has greatly accelerated the growth of the economy, and today there are fewer countries that use it as a pillar Economic stability does not accept. On the other hand time receipt of taxes for countries is very vital and the basis of government planning for all projects and especially their budgeting. Governments are looking for ways to collect their target tax from taxpayers at the lowest possible cost. Thus, the most important step to achieve this goal is for taxpayers to declare the actual amount of tax they have paid in tax return. This paper deals with modeling the game between taxpayers and National Tax Administration. The results showed that the equilibrium declared tax of taxpayers is a function of assessed due tax, the quality of assessment groups, the number of assessments and the parameter of taxpayers’ dishonesty. The taxpayers’ equilibrium declared tax is increasing relative to the quality of their assessment groups and decreasing relative to other assessment groups. With increase in the likelihood of dishonesty, the declared tax of larger taxpayers will increase and the declared tax of smaller taxpayers will decrease and vice versa. Furthermore, if the quality difference of two assessment groups is only vertical, then assessed due tax and the equilibrium declared taxes will be equal. Finally, increase in the number of assessment leads to increase in the declared tax of larger taxpayers and decrease in the declared tax of smaller taxpayers and vice versa.

Comprehensibility and Automation: Plain Language in the Era of Digitalization

Abstract The current article briefly presents a pilot machine-learning experiment on the classification of official texts addressed to lay readers with the use of support vector machine as a baseline and fastText models. For this purpose, a hand-crafted corpus was used, created by the experts of the National Tax and Customs Administration of Hungary under the office’s Public Accessibility Programme. The corpus contained sentences that were paraphrased or completely rewritten by the experts to make them more readable for lay people, as well their original counter pairs. The aim was to automatically distinguish between these two classes by using supervised machine-learning algorithms. If successful, such a machine-learning-based model could be used to draw the attention of experts involved in making the texts of official bodies more comprehensible to the average reader to the potentially problematic points of a text. Therefore, the process of rephrasing such texts could be sped up drastically. Such a rephrasing (considering, above all, the needs of the average reader) can improve the overall comprehensibility of official (mostly legal) texts, and therefore supports access to justice, the transparency of governmental organizations and, most importantly, improves the rule of law in a given country.

Effect of the production site on stable isotopes of ethanol in fruit spirits

Stable isotope ratio analyzes are powerful analytical methods that can be used to check the authenticity of alcoholic beverages and to detect any adulteration. The Forensic Institute of National Tax and Customs Administration applies stable isotope techniques - SNIF-NMR (Site specific Natural Isotope Fractionation), IRMS (Isotope Ratio Mass Spectrometry) to determine the botanical origin of the alcoholic beverages. The process starting from fruit until the Hungarian ‘pálinka’ has several steps, most of them well studied: fermentation from fruit sugar to ethanol, sample preparation (Cadiot distillation) and isotopic measurements (SNIF-NMR, IRMS). To keep the complete process under control only the study of the isotope fractionation effect of distillation step during the production procedure is missing. In this study the control of the different scale fermentation and distillation step was investigated by comparing isotope ratios: (D/H), δ13C of ethanol distilled from spirits produced in laboratory and in a commercial/Hungarian distillery. The experimental results of multivariable F-test (MANOVA) show that the scale of the fermentation and distillation – laboratory or commercial - has no impact on measured stable isotope ratios. This is a practical proof that the stable isotope database of the Forensic Institute can be used for the evaluation of the authenticity of spirits produced in any distillery.

Practical Information on European VAT

As is traditional in the first issue of each year, this overview presents the key features of the VAT systems of most European countries (both EU and non-EU), including standard and reduced VAT rates, various thresholds, the format of the VAT identification numbers and contact details of the offices of the national tax administration which process VAT refund applications or provide information to non-resident businesses on national VAT rules. The overview is compiled by the editor on the basis of information provided by the members of the European Knowledge Group of IBFD at the beginning of 2022.

Investigation and edification in a criminal case of corroboration in the production of drugs

False preparations are not produced in laboratories but especially in the form of „DIY” under far not sterile conditions. Pills, produced in generally in sheds, will be coated in concrete mixers and dried laid on the floor. The agents will be replaced by useless and for human consumption unsuitable materials. By inspection of false preparations were already found chalk powder, drugs, and in coloured products, brick-dust used as filling material. It is a well-known fact, that the most drugs, suspicious or false drug deliveries arrive from Far East countries but the knowledge of the country of dispatch alone does not necessarily result in opening of a small consignment or even of a big cargo by the National Tax and Customs Administration. A risk analyse is made, checking many features before opening a package, as only in this way they can process thousands of packages a day. In this paper we present the liquidation of a criminal gang in Hungary, whose members made their names memorable in the law enforcement ledger by production and distribution of desire and performance enhancers.

Chemical Safety of Poland and the European Union and the Activities of the National Tax Administration

Aim: This article attempts to present the issues related to the strengthening of chemical, ecological and environmental safety as an essential component of the safety of citizens and the activities of public authorities, on the example of the activities of the National Tax Administration. Introduction: Currently, over 100 thou. chemical products are used in production and consumption. Therefore, ensuring chemical safety is a priority, taking into account the fact that further civilization development determines maintaining this number at a similar or higher level, which enables greater mobility of societies, as well as providing food for a mass growing population. We encounter illegal activities involving the use of chemicals almost every day, which is an increasing threat to international security and peace in the world, further escalating hybrid threats. Chemical safety is essential for eco- logical safety, it guarantees the necessary cleanliness of the environment, and moreover, it is inextricably linked with the health safety of the societies. Ensuring chemical safety and compliance with the environmental protection standards is one of the objectives of the National Tax Administration, which translates directly into the protection of Poland’s borders against environmental, chemical and general international security threats. Methodology: The work includes a synthetic review of basic literature based on guidelines, regulations and directives, both national and European. The current achievements in the area of chemical safety applied in national bodies and the implementation of EU legal acts for the security of Poland were summarized. Conclusions: Based on the analysis and synthesis of the literature review, the effectiveness of the activities of customs and tax authorities in Poland and the European Union in ensuring chemical and environmental safety was assessed. The role of Poland as a border country exposed to smuggling from the eastern direction deserves special attention. Keywords: chemical safety, National Tax Administration (KAS), REACH, CLP, PIC Type of article: review article

First Year Experience of the Abolition of the €22 Rule and the Introduction of the New e-Commerce Vat Laws

The abolition of VAT exemption regarding negligible consignments has raised a variety of tax and customs management issues in terms of budget revenues both on the EU and domestic fronts. The abolition of VAT exemption below €22 in July 2021 has brought upon a completely new situation in the customs management of e-commerce from non-member countries to the EU. A review of the achievements and challenges of the past year, which also underpins the timeliness of our study, can contribute to further refinement and clarification of the system. The main focus of this research is to explore the customs experience with the new VAT regime for B2C e-commerce from third countries into the customs territory of the European Union, introduced from 1 July 2021, to identify the problems encountered in the past period and possible solutions. The article will use statistical data collected from the National Tax and Customs Administration to explore the characteristics of the past year and the main trends in turnover, and to identify the challenges and the solutions authorities can provide to them.

Investigating the Relationship Between Employees' Perceptions of Organizational Justice and Social Capital in The National Tax Administration in the South of Tehran Province

Investigating the Relationship Between Employees' Perceptions of Organizational Justice and Social Capital in The National Tax Administration in the South of Tehran Province