Provision of judicial tax expert services – part one

In the first part of our series of articles, we summarize the activities of judicial tax experts, their role in our legal system and the use of their opinion letters. In the next part of our series of articles, we will give you an overview of the importance of private expert opinions through some real life examples of legal cases.

Who are judicial tax experts?

Judicial tax experts are persons whose activities are covered by Act No. XXIX of 2016 (Act on Judicial Experts), whether seconded by a public authority (tax authorities, courts, public notaries, the police, etc.) or working on the basis of a mandate contract (on behalf of legal entities or natural persons).

According to Decree No 9 of 2006 of the Ministry of Justice, judicial experts provide services in relation to different fields of expertise. The specialisation of tax and social contributions, excise tax and customs can be found within the fields of economics, customs and certain financial fields. A person who has the appropriate qualifications and expertise is registered as a judicial tax expert by the Ministry of Justice (MJ).

Public registry

The MJ maintains a registerof judicial experts, called "name register". If you are looking for a judicial tax expert, you can search by the different tax categories in the name register. For example, you can look for an expert in corporate tax, VAT, personal income tax or transfer pricing. You can also filter the name register whether the tax expert is based in or outside Budapest, what language skills he / she has, or whether electronic communication is possible with him / her.

What is the role of judicial tax experts in our legal system?

Judicial tax experts (including private tax experts) may be required in a number of areas such as private engagements or administrative, judicial, etc. proceedings when they are officially delegated.

The Hungarian legal and judicial system is making increasingly active use of the institution of expert evidence. This is because a judicial tax expert is a personal means of proof (e.g. in a civil or criminal case, whether there is a litigation or not), and the expert opinion is considered as documentary evidence.

There is a distinction among public administration, civil and criminal proceedings, in all of which the judicial expert and thus a tax expert, may be involved. All three procedures have different sets of rules. Judicial experts have / may have a role in all three types of procedure.

For example, in the different procedures, a tax expert is involved (e.g. by the court, the public notary or by the debating persons) when specific tax expertise is required to establish or assess the fact to be proved. This is why the judicial tax experts may be called in every day life as the so called judge of facts.

What is a private expert opinion "useful" for?

In the case of a private engagement, the judicial tax expert acts on the basis of a mandate contract and answers the questions raised by the client from a tax point of view, preparing a so called private expert opinion. When giving his / her opinion, the expert must comply with the provisions of the Judicial Expert Act, i.e. he / she must give an independent and impartial opinion.

A private expert opinion is given, inter alia, because a company or an individual wishes to prove a fact and for this purpose engages a person independent and with appropriate expertise to answer the tax questions raised.

A private expert opinion may also be prepared because a person intends to initiate a legal proceeding to clarify a tax issue at a later stage and wishes to use the previously prepared private expert opinion for this purpose.

In many cases, the client may also obtain a private expert opinion in advance because he / she has a claim against its business partner and wishes to determine the amount of the claim with the help of an independent, impartial expert who has the relevant tax expertise.

What is the role of an expert?

The role of a judicial expert is to prepare a professional and well usable opinion understandable by an everyday person prepared on the basis of up-to-date scientific and technical information, and to help establish the facts (judge of fact) and to decide the case, while being independent and impartial.

The expert opinion should answer the technical question(s) raised and shall not answer any legal questions.

In the next part of our series of articles, we will look into actual court cases in which judicial tax experts were involved in answering tax technical questions.

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