NAV releases results of internal investigation

March 5, 2015

vida

The results of an internal investigation “personally overseen” by Hungary’s National Tax and Customs Administration (NAV) president Ildikó Vida was published on the official website of the government of Hungary (kormany.hu) on Wednesday.  The preface to the report concludes that there is no evidence whatsoever to support allegations of improprieties either with regard to the manner in which NAV audited certain US-owned companies doing business in Hungary, or audited the value added tax reclamation on the part of large companies.

In response to the US State Department temporarily suspending the right of six Hungarians suspected of engaging in, or benefiting from, corruption to enter the United States, Vida announced on 6 November 2014 that she was personally overseeing an internal investigation despite her name being on the list.  The supposed purpose of the investigation was to determine whether there were any grounds to allegations that NAV had treated American-owned companies doing business in Hungary in an unusually strict or discriminatory manner, and that the tax authority had failed to properly audit companies with regard to the reclamation of value added tax.

According to the report, the American companies in question apparently do not appear in the tax authority’s records, and for this reason NAV based its investigation on “850 companies registered in Hungary with tax numbers owned by natural or legal American entities.”  The preface makes clear that the investigation “only addressed the period falling within the (5 year) statute of limitation.”

Apart from matters that are “the subject of current investigations”, the investigation concluded “no information, facts or circumstances came to light with regard to NAV’s procedures to suggest

  • that discriminative behavior took place in the case of American companies.
  • that reports of a public interest submitted to NAV by American companies were suppressed
  • that any means were employed that might have caused disadvantage or harm to American companies with regard to their tax, financial or economic situation, i.e. the American companies were treated the same way as other companies.

On the subject of Bunge Zrt., which the report did not actually name, and the allegation of VAT fraud in connection with the sale of vegetable oil, the report says this is the “subject of a criminal procedure currently under way”, but that it was “an area of high priority for NAV” even before that particular case arose.

Reference:

http://www.kormany.hu/hu/nemzetgazdasagi-miniszterium/ado-es-penzugyekert-felelos-allamtitkarsag/hirek/nav-jelentes

http://www.kormany.hu/download/6/f3/40000/DOC150226.pdf