Companies should not only pay attention to improving the quality of their online invoice data reporting in order to avoid the tax penalty of up to 500,000 forints per invoice, but also as the VAT return proposals to be provided in November and the e-invoicing promising the opportunity of paper-free invoicing will also be based on the data reports.
What does the Hungarian Tax Authority warn taxpayers for?
The parties concerned by data reporting will be notified if, due to an error, their online invoice data reporting sent to the Hungarian Tax Authority is not received, i.e. if, for some reason, the tax authority is unable to receive the data report. The most typical causes for this are the following:
- a compulsory piece of data is missing from the XML file of the invoice;
- data is filled out erroneously (e.g. if letters are used instead of figures in the date format);
- the invoicing program was not revised at the time of the XML version update;
- inappropriate testing at the time of introduction of a new invoicing program;
- a communication error with the Hungarian Tax Authority.
We addressed the most common online invoice data reporting errors in a previous post: 5 typical errors during online invoice data reporting to the Hungarian Tax Authority.
Error identification and recording on the Hungarian Tax Authority 's side
Based on the tax authority's notice
The goal is to reduce the number of failed data reports or reports triggering a warning, to improve the completeness and accuracy of the invoice data available and, through these, to improve the efficiency of taxpayers' administration processes.
There are, however, two sides to this story. On the one hand, the Hungarian Tax Authority supports companies by automatically and regularly notifying them of errors but, on the other hand, these errors will be available to the tax authority in a documented manner. At the time of a potential later tax audit, the Hungarian Tax Authority will expect processing of these warnings and correction of the errors by the taxpayers.
As part of this tax authority communication, the Hungarian Tax Authority will not only monitor taxpayers but also the software developers who are involved as developers in the data reports submitted erroneously in August 2021. This means that, in the first round, the tax authority intends to draw attention to system errors.
The companies concerned will be notified of the online invoice data reporting errors in their electronic repository. For this reason, it is also important to prepare the persons managing "cégkapu" (company portal) accounts to take the necessary steps.
Correct your online invoice errors before an audit by the tax authority!
Irrespective of whether a company has already received a letter from the Hungarian Tax Authority or not, resources should be devoted to improving the XML data quality of online invoice data reports. Compliance is not easy as both the VAT Act and the Hungarian Tax Authority 's developer documentation include requirements for companies. It is a difficult task without tax expertise and IT knowledge although companies can benefit substantially from the earliest possible correction of errors: data reporting based on the correct XML file is not only the basis of the VAT return proposal relieving companies of a substantial administration burden but also that of paper-free e-invoicing.