Electronic Trade and Transport Control System (EKAER) was implemented in Hungary since the 1st January 2015. It helps the Hungarian Tax and Customs Authority to monitor shipments in Hungary. The purpose of the EKAER system is to ensure the transparency of the movement of goods and thereby minimize potential tax evasion in the field of VAT. The taxpayer has a reporting obligation if the monetary or weight limits of the shipment are exceeded. This limits are set separately for non-risky and risky goods. Failure to comply with this obligation is subject to the risk of imposing a fine up to 40% of the value of the unmarked goods. The State Tax and Customs Authority may also accede to seize the transported goods until their identity is established. The EKAER has undergone a number of changes since its introduction in March 2015. For example the taxpayers may be exempted from the reporting obligation if they transport products between two domestic locations that are no more than 20 km away from each other. From March 2020 certain data of closed reports can be modified afterwards. The biggest change so far should come from 1st January 2021.
The scope of the EKAER will change: products qualified as „not risky” will be exempted from the reporting obligation.
At the beginning of 2019, the European Commission repeatedly expressed its attitude to the EKAER system. The reporting obligation does not comply with the relevant European VAT rules and represents an administrative burden for intra-Community trade. The European Commission, among others, considered that the Hungarian law infringes the principles of neutrality, proportionality and of free movement of goods. The Commission also charged Hungary to harmonize properly their law. Therefore, the Hungarian government has integrated changes in rules of EKAER reporting in the Act LXXVI of 2020. This act establishes Hungary’s central budget plan for the year 2021 and includes besides EKAER changes, also other changes in the area of taxation.
Planned changes in the EKAER system
Based on the Act LXXVI of 2020, published on 14 July 2020, the following changes can be expected from 1st January 2021:
- EKAER´s reporting obligation for non-risky goods will be completely abolished.
- The reporting obligation will newly apply to the transport of risky goods their value exceeds the monetary or weight limit. Their amount is not yet given. These limits for risky goods are currently defined as follows: the total value of the consignment excluding VAT of HUF 1 000 000 and the total weight of the consignment is 500 kg.
- The Hungarian taxpayer risks a fine up to 40% of the value of the goods if
- fails to fulfill its notification obligation,
- or if incorrectly informs about the weight or value of the transported goods.
- In other cases (such as writing data, correspondence, etc.), could taxpayers, who are a natural person, be fined at least 200 000 HUF. In case of taxpayer, who is not a natural person, is amount of this fine at least 500 000 HUF.
- It is expected that taxpayers will have to still provide a risk guarantee in case of transporation of risky goods. The taxpayer is exempted from paying a risk guarantee if
- is registered in the qualified taxpayer database of the National Tax and Customs Administration,
- or it is operating for at least two years and it is registered by the National Tax and Customs Administration’s database for companies who have not accumulated any public debt. And his tax number is not suspended during the reporting period too.
DETAILED RULES FOR EKAER REPORTING ARE NOT REGULATED BY THE ACT LXXVI OF 2020.
These will be included in a decree of the Ministry of National Economy, which is not yet available. It is currently not clear if the list of dangerous goods will be extended next year. Or what monetary and weight limits will be set to determine the origin of the reporting obligation. Or whether risk guarantee obligation will continue to apply to taxpayers who do not meet the requirements for exemption. As the ministerial decree is published, I will update the overview of EKAER changes.