Currently businesses issuing invoices with VAT value of more than HUF 1,000,000 (EUR 3,200)- including all modification invoices that relate to the original invoice - must report these invoices to the Hungarian Tax Authority in the so-called itemized report (domestic recapitulative statement). This law also applies to the Hungarian VAT registrations of the foreign entities.
Previously the government planned to reduce this threshold to HUF 100,000 (EUR 320) from 1 July 2017. This reduction of the threshold is now to be postponed, if the new law is accepted.
Requirement to provide real time invoice data postponed to 2018
As you may know from 2014 businesses issuing invoices from their Hungarian VAT number are required to inform the authorities about the invoicing software they use. The invoicing software used must comply with strict requirements such as sequential numbering of the invoices, etc. Failure to use the appropriate software and failure to report it results in administrative penalty of up to HUF 500,000 (EUR 1700). Examples of inappropriate invoicing software include the use of Microsoft Excel or Word.
From 2016 the invoicing software must also be capable of collecting data in pre-defined format to the HU TA in case of the tax audit. The HU TA has issued a detailed guidance on how the Standard Accounting File (SAF) should look like, more specifically which fields should be reported and how.
As the continuation of this process, businesses issuing invoices using invoicing software will be required to provide real time data regarding these invoices from 1st July 2018, while businesses will be able to test the real time invoicing reporting as soon as 1 July 2017. This means that the real time invoice reporting is delayed again, for at least a year.
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.
It is likely that 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). 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.