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The Decision of the Constitutional Court of Hungary with Respect to the Tax Registration Procedure

The Decision of the Constitutional Court of Hungary with Respect to the Tax Registration Procedure


The Constitutional Court of Hungary made a decision in July 2017 that the provisions concerning the applicability of tax registration procedure do not infringe the principle of non-retroactivity.

According to the Hungarian Act XCII of 2003 on the Rules of Taxation, those taxpayers who are obliged to be registered in the company registry may receive tax number only once the state tax authority has examined whether there is any impediment preventing the issuance of tax number. In general, during the tax registration procedure, the national tax authority refuses to issue a tax number for those companies whose managing directors or members have contributed to the accumulation of tax debts owed to the tax authority within a specific time period preceding the day when the application for tax number is submitted.

The Constitutional Court of Hungary considered whether the provisions relating to tax registration procedure infringe the Fundamental Law of Hungary, as they shall be applied retroactively with respect to the examination of the past conduct of the managing directors or members of the companies applying for tax number. The Constitutional Court of Hungary declared that the provisions of tax registration procedure shall apply to proceedings commenced after the entry into force thereof, and the fact that they set out the requirements towards the managing directors and members relating to their past taxpayer conduct, does not infringe the principle of non-retroactivity.

By Gabriella Galik, Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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