Online invoicing, or online data reporting for invoicing, was launched in Hungary on 2 July 2018. It means that the Hungarian Tax Authority (NAV) requires taxpayers to provide immediate, real-time access to invoices issued with invoicing software and which contain VAT equal to or more than HUF 100,000 (approximately EUR 320), provided the recipient of the invoice is a taxpayer registered in Hungary.
What you need to know about online invoicing
Data from invoicing software must be sent electronically to the NAV within 24 hours following the issuance of the given invoice at the latest. The majority of Hungarian invoicing and accounting software is able to handle the forwarding of invoice data without manual intervention, so the data reporting is automatic for most taxpayers.
Importantly, the law only requires reporting on the data content of invoices, which means this obligation does not apply for other documents, pro forma invoices and receipts produced by accounting systems.
Albeit not in real time, the online data reporting of hand-written invoices or those issued using a printed document also fall under the scope of online invoicing in Hungary. If the amount of tax payable by a taxpayer registered in Hungary equals or is more than HUF 100,000 (roughly EUR 320), but is less than HUF 500,000 (roughly EUR 1,600), data must be reported within 5 calendar days of the invoice issue date, while if the amount of VAT equals or is more than HUF 500,000 (roughly EUR 1,600), the data must be provided within 1 calendar day of the invoice issue date, on the online platform.
Foreign VAT-registered companies also affected
All taxpayers registered in Hungary are subject to the data reporting obligation, so this includes foreign – i.e. not Hungarian-resident – taxpayers registered for VAT. Entities obliged to report had to register at the NAV in advance to use the service. The change particularly affected these foreign VAT-registered companies, as they had to adapt their ERP systems to comply with the Hungarian requirements in many cases.
Given the cumbersome start to online invoicing in Hungary the NAV set a grace period of one month for those not fulfilling the above-mentioned obligations. The grace period expires on 31 July though, after which date the default penalty for incorrect, delayed or incomplete online data reporting is significant, amounting to as much as HUF 500,000 (roughly EUR 1,500) per invoice. However, you also need to be aware that the NAV will act fairly with its sanctions, examining whether the taxpayer did all it could during its preparations to avoid a penalty, and assessing the severity, frequency and duration of the default. Despite their special situation, this also applies for foreign companies registered for VAT purposes in Hungary.
Online invoicing is a new tool designed to help legalise the Hungarian economy (besides electronic cash registers and the EKAER). Its purpose is to increase the efficiency of tax inspections, and will probably reduce opportunities for tax evaders.
If you would like more detailed information on the online invoicing process in Hungary, or if you have any questions about it, please get in touch with our professionals.