To which transactions will the NAV online invoice reporting obligation apply as a result?
1. Invoices issued on intra-Community supplies of goods and services.
2. Invoices issued on export supplies of goods and services to non-EU third countries.
3. Invoices issued to private persons.
What will change exactly in relation to NAV online invoice reporting?
1. Supplies of companies producing and providing services to EU countries
The transactions of companies producing and providing services only to EU countries will now also be covered by the Hungarian Tax Authority (NAV) and the NAV will see all data of the invoices issued on such supplies. At the moment, the tax authority receives more detailed information on these supplies of goods and services on an aggregate basis categorized by the Community tax number of buyers from the compulsory EU recapitulative (A60) statements submitted simultaneously with VAT returns. However, from January, the tax authority will see intra-Community supplies at the level of individual invoices.
This may increase the efficiency of the risk analysis methodology of the tax authority substantially as the authority will have full insight on all data shown on the invoices for intra-Community transactions and on the tax number of Community buyers.
For example, the NAV will also see the pieces or kilograms of products sold within the Community shown on the invoice (will the same quantity be shown on the delivery note) and the differences of the price of the product sold by buyer.
2. Export supplies
In respect of export supplies, so far the tax authority could only interpret the export transactions of a company if it requested the company's VAT analytical records and/or invoices subsequently as well as the relating customs documentation. However, from January, the NAV will see these transactions and will easily be able to compare them to the export customs declarations recorded for the same company in the system of the customs authority. We assume that the tax authority already considered this option also.
3. Supplies to private persons
In the case of supplies to private persons, although the name and address of the private person buyer must be shown on the invoice, it will not be possible to report data on the same invoice with the same content in the online invoice reporting system. This is necessary because this information may not be transferred to the tax authority due to the protection of privacy (GDPR rules). However, from January, if the seller asks for your name and address as a private person in a sales transaction, you should be aware that this is most likely due to the new regulation.
What additional information will the Hungarian Tax Authority receive as a result of the new online invoice data content?
By extending the online invoice data reporting obligation to the exports, intra-Community supplies of goods and services and the supplies to private persons, the tax authority's analysis and control capacities will increase further:
- The authority will have invoice-level insight and information on another group of transactions and will even be able to identify invoicing problems at a risk analysis run at the time of issuing of the invoice that it currently is only capable of detecting subsequently through a tax authority request.
- From January 2021, all invoices issued by a Hungarian taxable person will be received by the NAV based on which the authority will have immediate information on the turnover and revenue of the taxable person.
- As the tax authority will see all outgoing transactions as well as domestic acquisitions of the company from next year, in order to relieve administrative burdens, it will prepare draft VAT returns for companies. The NAV will now only not see imports and intra-Community acquisitions of goods and services. The taxable persons having such transactions also must review the draft VAT return with special care as it will most likely need supplementation.