Who can represent a foreign individual before the state tax and customs authorities?
1. Representation of foreign individuals
Natural persons may be represented before the state tax authorities by their legal representatives, or on the basis of a case-by-case authorisation any adults providing adequate proof of authorisation on a case-by-case basis vested with a power of attorney laid down in a public instrument or a private instrument with full probative force and on the basis of a permanent authorisation any adults who are suitable for representation.
2. Representation of foreign companies
Foreign companies, if established in a third country, i.e. not established in Hungary or in the territory of the European Community, and incurring tax liability on the sale of goods or provision of services in Hungary, must appoint a financial representative. Financial representation differs from any other form of representation insomuch as the foreign company and the financial representative are subject to joint and several liabilities for the company’s tax obligations.
Unless the foreign entity belongs to the category described in Point 1), it may be represented before the Tax Authority by a person vested with power of representation in accordance with the relevant regulations, or by an employed legal adviser, by an employee of legal age in possession of adequate proof of authorisation, or by an authorised legal counsel, lawyer, law firm, European Community jurist, tax expert, certified tax expert or tax consultant, certified auditor or by an employee or member of a business association authorised to provide accounting, bookkeeping or tax consulting services, or the legal or organisational representative or employee or member of an organization.
In the event the foreign company does not belong to the category described in Point 1), and is neither obliged to establish a resident business entity /e.g. company, association, non-profit organisation, co-operative, branch or commercial representation/ (see “Special rules governing the establishment of resident business entities”) in connection with the economic activities in which it is engaged in the territory of Hungary, and if it does not establish a branch, it may appoint a financial representative to fulfil its tax liabilities in Hungary.
Notification of a permanent authorisation to the Tax Authority
Any permanent authorisation or appointment for permanent representation before the Tax Authority is deemed to be validly performed only if the taxpayer notifies the Tax Authority thereof using the form (‘EGYKE) prescribed by the State Tax Authority. The Tax Authority sends a notification of the registration of permanent authorisation to the client and the representative. In the absence of such notification, the taxpayer may be represented only on a case-by-case authorisation basis.
In case a permanent authorised representative on the basis of authorisation by the authorised person is allowed to engage in customs issues, the following roles may be indicated on the data sheet EGYKE:
31 = indirect customs representative
32 = direct customs representative
33 = other person of major age (concerning customs issues only)
35 = direct and at the same time indirect customs representative or customs agency
37= direct and indirect customs law representative and product tax administrator
97 = customs law representative established in another Member State
In the case of code 35, it is also possible to make notifications even if the permanent authorised representative, commissioned representative in customs issues is not a natural person, but for instance a company dealing in customs issues (B2B relationship).
Notification to the Tax Authority on the appointment of a financial representative
The financial representative notifies the Tax and Customs Authority (code number 16 shall be used on the EGYKE datasheet) within 15 days of entering into or terminating its agency relationship with a foreign company, also providing the foreign company’s particulars and the number of the bank account opened in Hungary on behalf of the foreign company for tax-related transactions. Only if data sheet ‘T201 is used for notification does the Tax and Customs Authority register the foreign company and its financial representative and provides the foreign company with a tax number. Form ‘T201 is to be used to declare changes concerning the financial representative.
The financial representative may be a limited liability company (also by shares) with a subscribed capital of at least HUF 50 million or bank guarantees for the same amount and with no outstanding tax debts towards the Tax Authority. The financial representative provides proof of compliance with these requirements simultaneously with the notification of the Tax Authority on its acceptance of agency and annually during the course of the mandated duration.
Authorisation of a tax expert, a tax consultant and a European Community jurist
In the event a person with a tax expert, tax consultant, certified tax expert or a European Community jurist qualification is granted authorisation, it should be noted that such persons may exercise their right of representation as laid down in the relevant applicable statutory regulations only after having been registered in Hungary.