Contrary to the previous speculations businesses that issue invoices with a VAT amount above HUF 100,000 (approx. EUR 320) are not required to declare them to the Hungarian Tax Authority (HU TA) prior to sending them to their customers. Instead customers will be required to report them “without delay, but within 24 hours at latest” to the HU TA, according to the newly published draft of the Regulation by the Ministry of National Economy. Businesses will be required to register their invoicing software and the communication termination point and all data communication between the taxpayer and the HU TA will be done via this electronic communication protocol. The Regulation draft suggests that HU TA will soon open the electronic communication registration for testing purposes, so that business will have enough time to prepare for the real time invoicing obligation.
Who is involved in real time invoice reporting?
Any Hungarian VAT registered entity that issues invoices with a VAT amount above HUF 100,000 (approx. EUR 320) is affected by the real time invoicing obligation. This includes businesses established outside Hungary but registered for VAT in Hungary.
What are the requirements of the invoicing software / Standard Accounting File (SAF)?
The invoices must be issued by a qualified invoicing software that is capable of communicating with the HU TA by electronic means in a pre-defined way. Examples of inappropriate invoicing software include the use of Microsoft Excel or Word.
Does the new requirement changes the layout of the invoice?
No, the layout and the minimal requirement regarding the information that needs to be on the invoice do not change. What changes is the way businesses need to collect and store invoicing data about their transactions. Also the draft specifies how this data should be shared with the authorities.
How the data needs to be stored and shared?
The IT aspects of the communication protocol are detailed in the .xsd scheme file which is available at the website of the authorities. The .xsd scheme published in the draft of the new regulation appears to be different to the xsd scheme published by the HU TA in 2016.
How this affects domestic itemized report (recapitulative statement)?
According to the draft business affected by the real time invoice reporting obligation may be relieved from certain obligations to submit periodic domestic itemized report (recapitulative statement).
What are the penalties involved?
According to the current law draft failure to report the invoices in real time mode may attract administrative penalty of up to HUF 500,000 (EUR 1700) / invoice.
What this means potentially to business entities?
Companies will need to make invoicing software capable of real time data transfer by 1st of July 2018 at the latest. This is a one year extension comparing to the previous plans to introduce the real time reporting from 1 July 2017.
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),although the xsd scheme may change over time. 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.