Hungary introduced its online invoice reporting system on 1 July 2018 for invoices issued to another Hungarian taxpayer with a VAT amount reaching or exceeding HUF 100,000 (~ EUR 300). The real-time invoice data reporting entailed the NAV (Hungarian tax authority) requiring taxpayers to provide immediate information about invoices issued that met the above requirement. Since this feature must work automatically without any human intervention, it demanded considerable effort and cost from the companies affected (especially in the case of non-resident, VAT-registered companies or multinational companies using invoicing software that has been developed abroad) to create the technical conditions of this obligation, not to mention the constantly changing legal and technical environment.
One of the most important changes for this year in this regard is that from 1 July 2020, data reporting at invoice level must cover each invoice issued on domestic transactions to taxpayers registered in Hungary regardless of the VAT amount of the invoice issued. As a result, the range of the companies affected by this obligation as well as the volume of invoices to be reported will see a significant increase.
Also, from 1 July 2020, the invoicing obligation will be extended to certain tax-exempt transactions. Such categories affected by the obligation to issue invoices are found in education, private healthcare, dental services and property sales, for example.
Besides invoices on which VAT is being charged, certain VAT-exempt domestic sales of goods and supplies of services, domestic reverse charge transactions will also be subject to the online invoice data reporting obligation (e.g. sale of agricultural products, iron and steel products, labour hiring services).
As a technical change to the invoicing rules, from 1 July 2020 the first eight digits of the purchaser’s VAT number must be indicated on the invoice issued to another Hungarian VAT entity. Currently and until that date, this is required only for invoices having a VAT amount in excess of HUF 100,000.
Moreover, from 1 July 2020, the general deadline for issuing invoices will be reduced from 15 days to 8 days. This measure might affect companies (e.g. non-resident companies registered in Hungary only for VAT purposes) who delegated the invoice issuing and reporting activity to another company located in Hungary (e.g. to a Hungarian accounting or tax advisory firm). According to this provision, it is advisable to make the input data available to the party issuing the invoice as soon as possible so that the invoice can be issued and reported to the tax authority in time to avoid potential penalties.
The Hungarian tax authority will not stop here; from 1 January 2021 the data reporting obligation will cover invoices issued even to non-taxpayers as well as invoices issued on the intracommunity tax-exempt supply of goods, export transactions (practically, all transactions having place of supply in Hungary) and the cross-border provision of services if the service recipient entity is liable to pay the VAT under the reverse-charge mechanism. The only exemption will be the sale of goods and supply of services to be reported through the MOSS system.
