According to the new law, from 1st July 2017 businesses issuing invoices with VAT value of more than HUF 100,000 (EUR 320) (including all modification invoices that relate to the original invoice) must report these invoices online in real time to the HU TA. The new law also applied to the Hungarian VAT registrations of the foreign entities.
Failure to comply with this obligation may result in a penalty of up to HUF 500,000 (EUR 1,700) per each undeclared invoice.
Details or requirement to provide real time invoice data
As you may know from 2014 businesses issuing invoices from their Hungarian VAT number are required to inform the authorities about the invoicing software they use. The invoicing software used must comply with strict requirements such as sequential numbering of the invoices, etc. Failure to use the appropriate software and failure to report it results in administrative penalty of up to HUF 500,000 (EUR 1700). Examples of inappropriate invoicing software include the use of Microsoft Excel or Word.
From 2016 the invoicing software must also be capable of collecting data in pre-defined format to the HU TA in case of the tax audit. The HU TA has issued a detailed guidance on how the Standard Accounting File (SAF) should look like, more specifically which fields should be reported and how.
As the continuation of this process, businesses issuing invoices using invoicing software will be required to provide real time data regarding these invoices from 1st July 2017.
The HU TA has not yet published the details of the exact real time reporting process and the specification of the real time communication. Under one of the scenarios currently being discussed, the invoicing will be cloud-based, i.e. the invoice must be either uploaded to the HU TA’s server for approval prior issuing or issued directly from the HU TA web portal. Under an alternative scenario, the invoice is issued at the issuer’s PC and automatically reported to the HU TA. Either way, the new requirement assumes additional IT development in terms of the invoicing software on the side of the taxpayers issuing invoices.
Previously the real time reporting was due to be introduced on 1st January 2017. Recently the Hungarian Parliament has postponed the requirement to provide real time invoice data to the Hungarian Tax Authority (HU TA) until 1st July 2017.
What this means potentially to your business
Regarding the new requirements for the invoicing software, you will need to make your invoicing software capable of real time data transfer by 1st of July 2017 at the latest.
It is likely that the new real time reporting obligation will be closely linked to the existing obligation to provide data in the XML format (also known as Standard Accounting File or SAF). We recommend reviewing your SAF export function and extending it further to satisfy the new requirement. Our team of IT and VAT experts can help you to understand these requirements better and provide you with the details of the enhancements needed once the HU TA publishes specification of such communication.