International Tax, Accounting and Law Firm in Hungary

New Invoice VAT Reporting Obligation in Hungary

All Invoices to Be Reported to the Hungarian Tax Authority

 

Pursuant to a new amendment of Hungarian VAT legislation, all invoices issued by a Hungarian VAT tax subject regardless of the VAT content of the invoice must be reported to the to the Hungarian Tax Authority NAV from 1st January 2021.

The invoice reporting obligation has been extended to all invoices issued under Hungarian invoicing rules starting from 1st January 2021. Thus, the obligation to provide information covers invoices issued to private individuals as well as invoices relating to intra-Community supplies and exports. Exceptions may be made only for invoices issued for the supply of goods or services by distance selling where the place of delivery is another EU Member State., e.g. in the case of online shops in the one-stop-shop VAT scheme.

Electronic or paper-based invoices

The new VAT reporting rules apply not only to Hungarian entities, but also to foreign companies that occasionally issue invoices using their Hungarian VAT number. Most firms generate their invoices from their ERP or separate invoicing software. So far as these invoices are concerned, the law explicitly states that reporting must take place electronically and simultaneously with the issuance of the invoice.

Software solutions for invoice reporting

Invoice reporting does not generally cause a problem to most international businesses operating in Hungary because most of them use standardized invoicing software that is regularly updated by the software company. The new reporting obligation may however create some challenges to foreign companies invoicing with Hungarian VAT as well to domestic entities using foreign or individual software solutions.

In such cases, individual software development that complies with the complex data requirements of the tax authority may prove to be quite wearisome. Purchasing a ready-made plugin that will transfer the data from the foreign invoicing software to the Hungarian tax authority is often a more convenient solution. In the latter case also, a fair amount of software development is still necessary by the foreign company, including the fulfillment of the Hungarian specifications for invoice data, the creation of the API surface and the XML data communication. So far as SAP is concerned, ready made SAP-plugins are available for compliant invoice reporting. Businesses that do not issue a large number of invoices are sometimes better served if they work with a simpler data transfer solution to an already existing commercial Hungarian invoicing software application.

Further information by the Hungarian Tax Authority in English and German can be found here.

If you have any questions concerning the above, please do not hesitate to contact us!
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