NTCA knows the ones who don’t pay tax for their Airbnb income

Dr. Korim Balázs / Legal insights / January 18, 2017

According to the newest press releases, the Irish Tax Authority has sent to its partner authority, the NTCA the list of the persons continuing host-tourism as a commerce, from which it clearly turns out that Hungarian hosts had income in the worth of 6 billion HUF in 2015, that is merely appeared in their tax declarations. The NTCA has exact information about all of the 4500 hosts involved, and in that case if these hosts haven’t fulfilled their tax-related obligations, they should make up for their deficiencies as soon as possible. Balázs Korim, the legal expert of the Barkassy Grünfeld Law Firm, briefly summarizes the possible methods. The experts of Barkassy Grünfeld Law Firm have already made statements about the taxing issues related to host-tourism and about the legal way of taxing. In that case if the hosts haven’t followed this way but after this announcement of the NTCA they want to, though, the legal institution of self-audit is on hand – emphasises Balázs Korim.

The rules of self-audit

The detailed rules of self-audit are specified by the Act on the Rules of Taxation, stating that a taxpayer may revise the tax or the tax base and the central subsidies that have been assessed, or neglected to be assessed, by way of self-assessment.

If, prior to the opening of a tax audit, the taxpayer reveals that he has deviated from the relevant legislation in establishing his tax base, taxes or central subsidies, or his tax return contains errors in respect of taxes, the central subsidy base or amount due to miscalculation or other clerical error, the taxpayer shall have the right to make corrections in his tax return by self-audit.

It is an important limiting rule, suggesting the as fast action as possible, that as of the openingof an audit, the tax or central subsidy that is the subject matter of such audit may not be corrected by self.

The host involved shall submit or post the declaration of self-audit until the day before the delivery of the tax authority credentials of the audit – so, since according to the news the tax authority has every information needed to the investigation, the hosts involved have to take action as soon as they can.

What should one do?

One should know about the concrete steps that the self-audit can be fulfilled by giving in the so-called self-auditory sheet, containing the corrected tax base, the tax and the budgetary support, and that the payment of the corrected tax and also the extra charges of self-audit, and the declaration of the corrected amount and the extra charges shall be fulfilled on the same day.

Overall, as it for the taxpayers, the NTCA acted in the most favourable way when instead of the immediate initiation of the audits, it decided to draw the attention of the hosts to the received information. The right of self-audit gives a chance for the hosts to avoid more serious legal consequences, which is clearly the aim of the NTCA, as well.

Based on the hand-out of the NTCA the legal effect of the self-audit is that “in that case if the taxpayer declares the corrected tax, the budgetary support base, the text and the budgetary support, will be in the position same as if the correct declaration had been declared originally”, therefore will be exempt from the tax penalty, the default penalty and the late charge – emphasised Balázs Korim.

Share article

Share on FacebookShare on LinkedIn

Sign up

Newsletter signupRSS signup

© Barkassy Grünfeld Law Firm 2015 | created by: pixelephant