What will change in NAV online invoice data reporting from 2021?
Hungarian NAV online invoice data reporting will change in two aspects:
- on the one hand, the scope of invoices to be reported will be extended (covering all invoices on supplies),and
- on the other hand, a new schema (3.0) will have to be applied for reporting.
From 1 January 2021, a new XML schema (3.0 XSD) will have to be applied yet again for sending data to the online invoice data reporting system even though the 2.0 schema was introduced hardly 3 months ago. The tax authority is definitely dictating a fast pace, however, as in the case of the current 2.0 version change, where a 3-months sanction-free period was granted by NAV for preparation, there will also be a grace period from January till the end of March in relation to version 3.0.
Why is yet another online invoice version change necessary?
From 1 January 2021, the invoices issued to private persons will have to be reported, too as well as intra-Community transaction and export transactions outside the EU.
This basically means that the online invoice data reporting system is now comprehensive as the tax authority will now see all invoices issued by companies.
In order for the new data content to be reported also, substantial development of version 2.0, a major schema amendment was necessary.
The entities reporting data have to solve, on the one hand, that invoices potentially already detected as containing personal data of private persons are reported in the online invoice data reporting system in compliance with GDPR rules. On the other hand, the companies mostly having Community and export transactions (which could so far report domestic invoices manually) should now, by all means, covert to an automated solution and conform to the requirements of the online invoicing data reporting system schema 3.0.
New development: XML may replace e-invoices!
A substantial change is coming in electronic invoicing as, according to the plans of NAV, the new 3.0 XML schema will already qualify as an e-invoice! If the taxable person makes a declaration in this regard, an electronic invoice will be sent in the image of an XML file as data reporting. In this case, the total data content of the invoice will have to be provided and the data content prescribed by the VAT Act will not be necessary, which means that a law amendment is likely to come also.
However, like name and address, data must be shown on the invoice but the importing of these to XML and their reporting is expressly prohibited for private persons for data protection reasons, NAV will differentiate in this regard. The XML of invoices issued to private person customers will not qualify as an electronic invoice.
New opportunities and development need in relation to NAV online invoice reporting system
A wide range of opportunities is opening up for companies along with an increase in development needs – though this is nothing new.
- First, invoicing systems have to be prepared for also reporting invoices issued to private persons as well as export and EU related supply invoices to the tax authority from January.
- Next, conversion to the new NAV 3.0 XSD schema is necessary, which contains a number of novelties, which require not only IT development capacities but also staff with expertise in finance.
- Third, the matter of electronic invoicing as a whole should be examined. It will already be a substantial change in B2B relationships that the XML schema 3.0 itself will qualify as an invoice if the taxable person declares for invoice data reporting purposes that it sends electronic invoices. The relevant terms and conditions are not only determined by the legal regulation but also the internal processes of the company, its contractual relationships with partners, and the content of their cooperation.
In this regard, the Hungarian tax authority will incorporate further help in XML as it will allow the adding of fields that will facilitate XML-based automated bookkeeping such as, for example, order number, GL number, cost center, company code, etc.
We are slowly getting to the point where paper-based invoicing is no longer necessary and we will be thinking in XML-s and data sets and the sending and receiving of these. We are still waiting for the specification containing the exact details of the 3.0 online invoice but we already at this point, we are starting to see the next deadlines to be met, even before the grace period for the conversion to 2.0 is expired.