Global minimum tax: where is the mysterious NAV form?

2024 is the first year of the global minimum tax, as the Hungarian law implementing the relevant international and EU laws entered into force on 1 January. One of its provisions states that entities qualifying as taxpayers subject to the GloBE in Hungary have to register by 31 December using a NAV form. The problem: the tax authority has not yet provided the form, leaving taxpayers wondering what they will have to report.

Hungarian Act LXXXIV of 2023 (GloBE Act) implementing the EU rules pertaining to the global minimum tax (GloBE) was published at the end of last year and entered into force on 1 January 2024. Under one of its provisions, domestic entities subject to the GloBE—including local organisations proceeding in their representation—are required to notify the state tax and customs authority of being subject to the top-up tax in the GloBE system by using the form provided by the authority. The notification has to include a presentation of the multinational enterprise or large-scale domestic group within 12 months of the starting date of the tax year affected with the top-up tax obligation.

The GloBE top-up tax obligation applies to enterprise groups with revenue of at least EUR 750 million; in the EU, it also applies to groups that consist of entities registered in a single Member State. Neither the EU Directive nor the GloBE Act define the term revenue. In accordance with the provisions of the OECD Model Rules, the limit has to be defined on the basis of the annual revenue in the ultimate parent entity’s consolidated financial accounts.

Compliance with the obligation specified in the above provision is made more difficult because the form that has to be completed and submitted to the tax authority has still not been made available on the NAV website even though the end of the year is fast approaching. Consequently, taxpayers are left wondering what information they may need to gather to complete the form. This is especially problematic in light of the fact that the majority of the Hungarian entities affected by the global minimum tax are group members and not parent entities in their respective GloBE groups, meaning they may not even have any insight into the group they are supposed to provide a presentation of using a form not yet published.

Thus far, the notification seems to be a Hungarian specialty, as it is not included in either the OECD Model Rules or in the applicable EU Directive, though legislators have been authorised to impose such deviations from the OECD. At the moment, we have no information as to how many EU Member States may have introduced similar obligations and what information they may require from GloBE groups. However, it is not just the forms that are delayed: there are as yet no implementing decrees for the GloBE Act either, which are expected to contain the legislator’s details on the rules of the notification obligation.

It is important to note that the notification is compulsory even in the case of any exemptions (e.g. CbCR, de minimis). This means that this year’s deadline will in any case require enterprises to cooperate with the members of their group in assessing the group’s GloBE obligations and providing the notification.

The situation is made more interesting by the fact that under Section 227/B of the Act on the Rules of Taxation (Art.), the NAV may impose a penalty of up to HUF five million for failing to comply with or defaulting on the notification obligation unless the omitting enterprise provides proof that it proceeded with due diligence in the given situation. For now, the question remains as to how this provision can be applied in practice.