A bejegyzés itt érhető el magyar nyelven.
The Decree of the Minister of Finance on online invoicing in Hungary was published in the Hungarian Gazette on 1 June, which contains the rules of online data reporting obligation to be introduced as of 1 July 2018. The preparations by software developers have already been under way for a while, and only a couple of days left until the system goes live. All this means that the tax authority becomes entitled to already inspect the receipt data right upon the issue of receipt as from 1 July. It is needles to say what risk this may bring for the enterprises, since it is no longer sufficient for them to be aware of their data reporting obligation, but they also become required to fully comply with the rules of issuing invoices. In the following we wish to provide some support for those who are still preparing for this change.
So what are the consequences of the online invoicing in Hungary / data reporting obligation for enterprises?
The primary goal of the online invoicing in Hungary / data reporting obligation under introduction was to provide rapid and direct insight for the tax authority into economic processes, and to thus improve the efficiency of the tax authority’s risk analysis activity and to raise VAT revenues.
Online data reporting may result in the improving quality of invoicing software and reducing tax administration burden on the side of taxable persons, because the new system replaces the aggregate data reporting of invoice issuers. A further benefit could be the option to query the issued invoices, available to both the issuers and addressees of invoices.
Who will be required to report such data?
This obligation practically applies to those required to issue invoices, i.e. all taxable persons registered in Hungary, including foreign enterprises with VAT registration in Hungary. In addition, those subject to the simplified entrepreneurial tax (‘EVA’) are also required to report data, since EVA taxpayers fall in the same in the category as VAT registered entities regarding the invoice data reporting obligation.
In the event of invoicing by means of a proxy or of self-invoicing, the provision of the VAT Act must also be observed pursuant to which the proxy – along with the taxable person who is required to report – shall be also liable for the performance of obligations provided in the applicable legislation, concerning the issue of invoices. In this regard it is worth to assess how the reported data of invoices issued on the basis of the clients’ orders in a principal-proxy relationship are managed in the contracts.
Which invoices will the change affect?
Online invoicing in Hungary / Data reporting applies to invoices which were issued for a taxable person registered in Hungary, and the VAT content of the charged invoice must reach or exceed HUF 100,000. Domestic invoices which are subject to reverse taxation do not fall under the scope of the data reporting obligation. The data reporting obligation must be complied with independently from the place where the invoice has been issued, meaning that in case an invoice of a VAT resident is issued abroad for another taxable person registered in Hungary, and such invoice meets the relevant requirements, then the person concerned shall not be exempted from the obligation to report data.
Invoice issuers have the option to report data to the tax authority concerning all invoices issued for taxable persons, but can also opt for sending data of only those invoices the charged VAT content of which reaches or exceeds HUF 100,000. In the latter case, the invoicing software needs to monitor the issue of each and every invoice to determine whether the given invoice is concerned by the data reporting obligation.
How should we proceed when invoicing manually or electronically?
In the case of invoices issued manually, data reporting obligation is complied with via the online interface of the NTCA. Invoice data must be entered as if we issued the invoice again. For invoices where the charged VAT content does not reach HUF 500,000, there is a 5-day period to comply with the data reporting obligation. However, if the charged VAT content exceeds HUF 500,000, data must be reported on the day following the day when the invoice was issued.
In the case of invoices issued with an invoicing software, data reporting obligation must be complied with automatically, promptly after the closing of the invoice, by using the predetermined XML format.
The failure to perform or the late performance of the online reporting obligation may be sanctioned, and the default penalty may reach HUF 500,000 per invoice.
What already needs to be prepared for is the registration of the invoicing system at the NTCA online platform, whichmust be performed by a given enterprise only once: by using the active account (with the so-called ‘KÜNY’ storage place) of the taxpayer, the taxpayer’s authorised representative or permanent proxy. During the process the primary user (the person with the right of representation) who has a client gateway ID registers the taxpayer in the system, then adds secondary users and technical users who will be entitled to upload data only. However, one cannot think that once we registered in the test system we are better off with our obligation. The live system requires a re-registration.
According to our experience, there are more and more prudent taxpayers who test the system, thus helping software developers in improving it. We are eager to see the first experiences in July. We will keep everybody informed about our experiences of future online invoicing in Hungary.
In case of any questions regarding this topic, please do not hesitate to ask BPiON.