The Electronic Road Transportation Control System (EKAER) will help the tax authority in tracking every product transported in Hungary. The purpose of the system is to ensure no goods are put into circulation in Hungary that have not been previously reported to the Hungarian Tax and Customs Authority. The introduction of the system is a key element of the regulations serving the whitening of the economy and the fight against corruption.
The system serves the control of the fulfilment of tax obligations in relation to the road transportation of goods in connection with:
a) the acquisitions of goods or importation for other purposes to Hungary from other member states of the EU
b) the supply of goods or exportation for other purposes from Hungary to other member states of the EU, and
c) the first taxable supply of goods to non-final users within the territory of Hungary.
For this purpose, the persons concerned will have to submit electronic reports to the Hungarian Tax and Customs Authority.
Where can we find the relevant regulation?
The regulation relating to the EKAER system is included in Act XCII of 2003 on the Rules of Taxation (including the annexes) and the decree of the Ministry for National Economy to be issued on the execution of the legal regulation.
Certain rules are also included in Act I of 1988 on Road Traffic, Act LXVII of 2013 on Tolls Payable in Proportion to the Distance Travelled for the Use of Motorways, Highways and Main Roads and Act LXVI of 2008 on Food Chain Stores and their Authority Supervision.
What are the reporting obligations and to whom do they apply?
Taxpayers (who may be the addressee or the dispatcher depending on the type transport) will have a reporting obligation for the purpose of determining the EKAER number in relation to activities (acquisition of goods, other imports, supplies of goods, other exports, domestic supply of goods) involving road transportation performed with vehicles subject to a road toll (having a total weight of over 3.5 tons). In the case of hazardous goods, a special rule will apply to reporting (see full article). The reporting obligation will apply to transports started on or after 1 January 2015 ( the start of transport means the loading of goods onto the vehicle).
The obligation of reporting falls to a different party depending on the circumstances. The addressee will have to report the transport if goods are transported to Hungary from an EU member state. If goods are transported from Hungary to another EU member state, and in the case of domestic supplies of goods, the transport must be reported by the party dispatching the goods.
The person with the reporting obligation (the legal representative or permanent proxy) will have to report through the “client gateway” (the electronic system for public administration services) all persons who may have access to the web interface to be created for reporting purposes. These persons may submit reports on the EKAER site after providing their username and password. The person entitled to make electronic reports may not only be the representative of the taxpayer authorised for tax matters as defined in the Act on the Rules of Taxation, but any natural person, who has access to the reporting site of the reporting taxpayer only. Companies should give access to the system to employees who are actually involved in some way in the process of loading.
See this weblink for the information that must be in the report: https://www.rsm.hu/ideas-and-insights/rsm-intelligence/tax/ekaer-in-practical-terms
What sanctions may relate to reporting?
If the taxpayer fails to fulfil their reporting obligation, the goods will be regarded as having uncertified origin and, from 1 February 2015, the Hungarian Tax and Customs Authority may impose a default penalty of up to 40 percent of the consideration of the unreported goods.
In relation to the default penalty sanction relating to non-compliance with the reporting obligation, the Act on the Rules of Taxation provides that in this case, the goods qualifying as goods of uncertified origin may be seized up to the amount of the penalty (with the exception of perishable goods and livestock), which shall be ordered in the resolution of the state tax and customs authority imposing the penalty. Minutes shall be taken of the seizure of the goods which can then continue to be transported to the warehouse of the Tax Authority.
From next year, the state tax and customs authority may also demand a declaration from the addressee, the dispatcher and the carrier concerned in the case of transportation of goods of trading quantity:
a) of the description and quantity of the transported goods
b) of the description and registration number of the transport vehicle
c) of the receipt of the goods and the address of unloading
d) of the EKAER number; and
e) if the place of unloading is not the seat, site or branch office of the VAT-able person, of the title of use of the property.
If hazard factors justify, or if the VAT-able person concerned by the transport of goods denies to make the above declaration, the state tax and customs authority may apply an official seal on the transport vehicle in the form of a package seal or container seal carrying an official stamp. Failure to meet the EKAER reporting obligation may not only imply sanctions for the party obliged to make the report, but also if an official tax authority seal is placed on the container of the transport vehicle, the carrier may not be able to use the vehicle for a long time, which would bring a loss of revenue and also potential default penalty payment obligation if the carrier fails to keep to the agreed deadline.
For more information about EKAER, please visit RSM DTM Hungary Site:https://www.rsm.hu/ideas-and-insights/rsm-intelligence/tax/ekaer-in-practical-terms
Here you will find the answers for the following important questions:
What is the EKAER number?
Is there any connection between the road toll system and the EKAER system? Are carriers released from liability?
What are hazardous goods? What is hazard collateral and does it relate only to hazardous food or other hazardous goods also?