International Tax Data Exchange Announcement

Dear Clients,

In 2014, the Organisation for Economic Co-operation and Development (OECD) published its recommendation on a standard for automatic information exchange among different countries and the information capture and reporting obligations for banks, financial institutions and similar entities. Under this arrangement, every Hungarian financial institution is required to take part in the mandatory automatic exchange of information.

What is the international exchange of tax data?

Efforts to improve tax collection efficiency and results have greatly intensified on the international level as well; the cooperation of international public administration bodies and the related reporting of taxes and other contributions are recognised as important means to achieve this end.

In order to transpose the intergovernmental agreement into Hungarian law, Parliament has passed an act (Act CXCII of 2015).

According to this Act, KELER Group must introduce a new system of due diligence and registration in order to identify the accounts of international taxpayers held with KELER Group and to allow it to forward the required information to the tax authority.

These new due diligence procedures will apply to new accounts as well as existing accounts opened prior to the effective date of the Act (1 January 2016), and KELER Group will therefore need to request its clients classified as international taxpayers according to the criteria stated in the law to submit the necessary tax declarations.

KELER Group is required to report this information via the National Tax and Customs Administration (NTCA). NTCA will then forward the required data to the tax authorities of the relevant countries. Within 30 days of submitting our report to NTCA, we will write to our clients to inform them that we met the reporting requirement.

The international tax data exchange process at KELER Group

Our client acceptance processes changed as from 1 January 2016 to ensure we comply with the data exchange requirements, and this will result in the changes and additional obligations described below:

New clients: every client will have to state their tax residence, and if they pay tax in any of the countries that signed the convention on information exchange, they also need to give KELER Group proof of their tax number.

If a prospective client refuses to sign the declaration or give proof of their tax number, KELER Group will not enter into a contract with them.

Existing clients: we will carry out a central screening to identify which clients may be affected. We will request all clients we identify as affected to make a declaration and provide proof of their tax number.

We kindly call the attention of our clients that in case of a change of circumstances results in a data becoming incorrect in the declaration or in any other documents, they are required to notify KELER Group within 30 days, by submitting a new declaration, written notification of the change and new documentary evidence. If this requirement is not met, KELER Group registers the client as non-cooperating and sends the necessary reporting to NTCA.

Our Client Service team is happy to answer any questions you may have on the completing of the Declaration.

Your cooperation is very much appreciated.