Personal income taxation was introduced in Hungary in January 1988.
In the first years the obligation of filing yearly tax returns could be fulfilled only by filling out paper form documents. The fulfillment of the tax declaration obligation was a large administrative burden for the taxpayers, and the declarationsÕ check correction, processing required substantial material and human resources from the side of the tax administration.
In the mid of 2000s by the IT development the tax administration implemented an internet-based software for the filling-out and control of the tax declaration, and from 2006 on the PIT tax return could be filed electronically too.
The achievement of the 2008 was the simplified tax return compiled on the basis of the answers given to previously defined questions by the help of which the tax administration prepared more than 320 thousand tailor-made PIT returns yearly. In 2010 tax return with limited data content was introduced, for those taxpayers who received their income on a limited number of grounds. This type of tax declaration containing only 3 lines was only available for a rather narrow taxpayer public, but – thanks to the modification of the regulatory environment – fulfillment of the tax return obligation by only one declaration became possible in 2015.
Beside our endeavors to simplify the processes the existence of several tax return modes gave rise to disadvantages for the both the taxpayers and the tax administration. It was difficult for the individuals to navigate in the system, to choose the most appropriate tax return option. The existence of several tax returns needed the existence of several processing systems, it was a complicated and expensive solution.
It was a legitimate expectation of the taxpayers that they could meet their tax return filing obligation in a simpler way. And in line with this the aim of the tax administration was to release the administrative burden of people on filing the PIT returns.
In 2017 the new, online accessible tax return draft replaced the tax returns used in the previous years, having brought in a new era in the taxation and implemented a new e-PIT system. Thus the tax administration Ð beyond the change of the approach Ð created the tax return draft as a simple-to-use system having positive effect on large sections of public and cretaed the IT environment for its notification.
The PIT return filing system was renewed not only for its technology but also a change of philosophy took place in the taxation. The tax administration used the so called control data for post audit in the previous years, now the data are provided for the individuals at their disposal, tax return draft is compiled for them.
More than 2 million individuals with registration on governmental portal could reach their PIT tax return drafts for 2016 compiled by the tax administration on the specific internet ePIT platform. In 2017 the draft PIT tax return was compiled for 3.8 million people.
The tax return draft was extended to the private entrepreneurs, primary agricultural producers and individuals obliged to pay VAT in 2018 and 2019. So the tax administration drew up the PIT tax return for the whole taxpayer sector for the 2018 taxation year, the num ber of which exceeded 5.5 million pieces.
In the new e-PIT, the taxpayers have no other task as to compare the data of the certificates issued by the employers, payers with the data of the tax return draft, or complete the draft if necessary. If there is no discrepancy, then the taxpayer has nothing else to do as the draft becomes a valid tax return with the power of the law. The private entrepreneurs, primary agricultural producers and individuals obliged to pay VAT can meet their filing obligation if they complete, modify their drafts. The online platform is enabled to make arrangements about 1% of PIT in the favor of civil organizations and churches respectively.
The restructuring, modernization of the PIT system resulted in clearly identifiable reduction of burocracy for the wide range of individuals.
Drawing up of the tax return drafts and the electronic services related to it is the undertaking and implementation of the largest public service probably seen in the life of the NTCA which facilitates the taxpayersÕ compliance, is taxpayer-friendly and which fulfills the expectations of Òservice Ð providingÓ NTCA.