EKAER number and the EKAER system
EKAER stands for Electronic Trade and Transport Control System (‘elektronikus közúti áruforgalom-ellenőrző rendszer’). The new regulations making the use of the system mandatory in Hungary will take effect as of January 1st, 2015. aiming to filter out VAT fraud and minimize their possibility in public road transit to the fullest possible extent. Therefore it will monitor goods trafficking inside Hungary and also goods transported on public roads between member states of the European Union.
How does the EKAER number work?
For transporting goods on public roads via any motor vehicles subject to charge it will be required to apply for an EKAER number. Every number will be valid for 15 days and those organizing and executing the transit must have them as it must be presented during potential roadside checks by the authorities.
Who is subject to toll paying in Hungary?
In Hungary only vehicles over 3,5 tons are subject to paying usage-proportional road toll when using highways and other and other roads and road sections defined by law. This toll is proportional to the distance traveled on tolled roads and is determined by the axle number and EURO class of the vehicle. Vehicles under 3,5 tons using tolled roads, e.g. highways have to pay toll in a vignette system, where the toll is not proportional to the distance traveled but a fixed price have to paid for a certain period of time.
Who have to pay the road toll?
Those who transport goods to Hungary using public roads from member states of the European Union, who transport goods from Hungary to member states of the European Union and everyone engaging in taxable product selling via public road transportation not targeting end users are obliged to apply for an EKAER number for every transport.
Law also recognizes potentially hazardous foods and potentially hazardous products. Detailed regulations on hazardous products will be defined by a decree which will be issued by the Ministry of National Economy; details of this regulation are not yet known.
It applies to these products, that over a certain weight and value limit they are subject to notification even is transporting is carried out by a vehicle which is no subject to paying usage-proportional toll. In the case of hazardous foods the limit for notification is a minimum of 200 kilograms or a value 250 000 forints without taxes for one recipient. In the case of other hazardous products for one recipient the limit is a minimum of 500 kilograms or a value of 1 million forints without taxes.
Every vehicle which transports international aid and every military vehicle are exempt from the obligation of applying for an EKAER number.
Who has to pay a security deposit?
All taxpayers engaged in activities involving transportation using public roads and transporting hazardous products has to pay a security deposit. Wage transport is exempt from this rule.
Regulation gives a detailed description about how the security deposit should be calculated. If a transporter starts multiple shipments at the same time or has multiple shipments on the way, they only have to pay a security deposit for the one with the most value.
Obligation to provide a security deposit can be fulfilled either by paying the required amount of money to the account created by the national tax authority of via guarantee. The authority provides an opportunity for query and monitoring on an electronic interface for taxpayers who are obliged to pay a deposit.
Exempt from paying a security deposit are all taxpayers, who are registered in the system of the national tax authority as qualified taxpayers; and all taxpayers who are registered in the database for public debt-free taxpayers for at least two years and their tax number is not under suspension at the time of statement.
What are the consequences of an offense concerning the EKAER number?
If the type of the cargo, risk factors or lack of consistency between the cargo and its designation justifies it, or if the taxpayer in question refuses declaration, the authority locks down the cargo so its identity can be verified, except in the case of live animals and highly perishable products. This can be done via sealing the cargo or cargo space with an official seal, the integrity of which can be verified by the authority in the country. Removal of the seal is a decision to be made by the authority.
If the taxpayer fails to meet their obligation to apply for an EKAER number or to report the entire shipment, than the shipment or its undeclared part is considered a product of unverified origin, and the authority can impose a default penalty. Default penalty can be a maximum 40% of the value of the product of unverified origin.
Besides the imposed penalty the authority can lock down products meeting in value the amount of the penalty, except if the cargo comprises live animals or highly perishable products. Imposer of the fine shall issue a decree, make a report and size the products or transport them for preservation on the expense of the taxpayer.
Regulations of the EKAER must be applied in the case of all transports which the taxpayer starts after 1st January, 2015.